BLAZE MOTORCYCLES

Wilfred B. Abello
The year is 2005, a group of friends, young entrepreneurs, get together and in the process of discussion come
up with the observation that a swelling number of motorcycles on the road have indeed become noticeable.
With the observation as a starting point and realizing that the share more than a love for bikes they decide
to put a company to join the industry. The group, however, wanted to be different from the current players in
the market. Thus, armed with sheer determination and a basic common objective, the group proceeded to
their individual research, sharing ideas learned, authorities met, insights gathered through conversation with
pioneers in the industry while establishing requisite relationships with new found partners,
With the rest of 2005 and the earlier part of 2006 utilized company plans, strategies and for trips to China to
workout supplier arrangement and technology transfers we now move fast forward to the second half of
2006. The company completes incorporation proceedings and has acquired all the required legal documents
including the financial requirements and contingency sources. The have a large warehouse rented in the
Pasig area and have made initial negotiations to acquire a five hectare land in the Bulacan area which is to be
the site of their manufacturing and assembly plant.
To test market acceptability they import in limited number, Complete Knock Down (CKD) units and do
assembly and perform small scales sales. With the results of the test marketing resulting in encouraging
feedback and acceptance of a different product from a new player the stage is set for a full scale launch of
he companys product.

The Company
Blaze looks upon itself not only as a proponent of the first Philippine motorcycle; rather it views itself as a
purveyor of an improved lifestyle for the vast majority of the populace and with the goal of a truly world
class Philippine bike but a means to an end.
The companys key officers have extensive senior managerial experience in the motorcycle industry. These
officers have amassed over 50 man-years in the manufacturing, engineering and sales function with the
leading Japanese motorcycle company.
The company has sufficient financial resources to set up a small scales manufacturing operation and to
launch a middle scale marketing program.
It has strong dealership arrangements around the Philippines.

INDUSTRY BACKGROUND
With the prices of oil at one of its highest in over two decade and the worsening traffic situation the riding
public is forever looking for a means of transport that will provide mobility, convenience and peace of mind.
The countrys increasing population (please see table) and urbanization creates an increasing demand for
more efficient means of transportation. The rapid expansion of the vehicle fleet in the country has also
resulted in increased traffic congestion.

Ave increase of 1.76% per year

The motorcycle (Motorbike) market is growing. In the latest available figures from the Asian Development
Bank (ADB) on the internet in 2005, motorcycles dominated the vehicle fleet in the country with about
42.6%. Even with no access to the latest figures, it can be easily deduced that these number has even
increased.
With the Philippines motorcycles to population ratio (density) at only around 1 is to 30 (or 1 motorcycle for
every 30 citizens) compared with Malaysias 1:4 and Thailands 1:3 (please see table below) the potential
for the motorcycle market is very bright

Comparison with Our

ASEAN Neighbors
Country

Human Population

Motorcycle Population

Density
(person/motorcycle)

Indonesia

222 million

20 million

11

Thailand

64 million

20 million

Vietnam

84 million

12 million

Malaysia

26 million

6 million

Philippines

91 million

3 million

30

The motorcycle market for the scooters/motorcycles has in the last ten years been consistently on the rise
(with the one exception being 1999 decrease of 4.1%, maybe as a result of the Asian Financial crisis).
There is a good market prospect in the single bikes for the business people and professionals. While the
attached graphs shows a decrease for the private and government employees this was the 2006 trend, which
per by personal estimates may have already been reversed in 2007.

800,000

600,000

400,000

200,000

Business
Solo
Total

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

117,956

108,719

127,986

134,742

129,934

114,831

135,667

111,646

108,605

102,000

100,000

45,474

47,919

64,394

78,547

129,353

195,354

364,653

489,709

522,818

570,000

650,000

165,428

158,637

194,380

215,290

261,289

312,188

502,324

603,360

633,429

672,007

750,000

The Product
Blaze currently offers only four motorcycle models (two per engine displacement 100cc and 150cc). These
are the HUBS and BUZZ in the 110 cc displacement and the NSR and Brute models in the 150 cc
displacement. These models come in four different colors, namely: Red, Blue, Black and Silver. The
company can customize colors for institutional sales upon request.

The companys Japanese competitors like Honda and Yamaha carry the full line of products (higher engine
displacements like the 250cc and 450cc, etc.)

The Competition
The top four (4) leading brands in the market are all Japanese brands. These four corners a high ninety six
(96%) of the market.

PHIL. MOTORCYCLE MARKET SHARE by BRAND

2007

HONDA

HONDA

340,804

62%

KAWASAKI

81,760

15%

SUZUKI

72,424

13%

YAMAHA
ChinaBrands

33,961

6%

17,597

4%

546,546

100%

KAWASAKI
SUZUKI
YAMAHA
China-Brands

TOTAL

These Japanese brands have been in the Philippine market for a very long time now. In addition to its long
dominance of the Philippine market, the Japanese brands have consistently proven their durability and
quality of their motorcycle products. Consumers buying decisions were most affected by the affordability
and the perceived quality.

HONDA
This brand has been the dominant brand in the choice for motorcycles. Their very strong breakthrough in the
car market and excellent design and performance has even helped further the HONDA brand a household
name. Its name has even become the generic name for motorcycles in the far flung barrios of the country. It
carries a complete line of products and its Honda Wave has become almost the clear (unanimous) choice for
buyers in the scooter and smaller bike category (100cc to 125cc).

YAMAHA
Slightly more expensive and known for the power it can deliver. Some of its smaller displacement engines
can out perform the higher displacement engines of other brands. Yamaha DT 125 is still the favorite dual
purpose motorcycle. This is a two stroke motorcycle that can be ridden both on dirt and paved road.

KAWASAKI
Established as a business brand, with a slogan of MALAKAS HUMATAK and is the preferred brand in the
years ago for the tricycle operations.

SUZUKI
Perceived as the lower end of the Japanese brands but still known a brand not to be taken lightly in the
motorcycle market. Lately, the Suzuki Raider 150CC is slowly gaining a following among the young
generation because of its sporty looks and performance.

CHINA-Brands
The China-made brands of motorcycle in the market, while lower priced are perceived to have very poor
quality.

2006: Total Industry Performance

12 MONTH REVOLVING INDUSTRY TREND (Brand Performance including China )

700,000

2005:
601K

Sales Volume

600,000

2006:
631K

500,000

Pre-Crisis Peak
Volume

2002:
259K

1997:
222K

400,000

300,000

200,000

HONDA

SUZUKI

KYMCO

CHINA

Dec-06

Sep-06

Jun-06

Mar-06

Dec-05

Jun-05

Sep-05

Mar-05

Dec-04

Jun-04

Sep-04

Mar-04

Dec-03

Sep-03

Jun-03

Mar-03

Dec-02

Jun-02

KAWASAKI

Sep-02

Mar-02

Dec-01

Jun-01

YAMAHA

Sep-01

Mar-01

Dec-00

Sep-00

Jun-00

Mar-00

Dec-99

Jun-99

Sep-99

Mar-99

Dec-98

Sep-98

Jun-98

Mar-98

100,000

Customer Buying Trend

User Occupation
160,000
Businessman
Government Employee
OFW
Professional
TC/Solo Taxi Driver
Part Time/No Reg Job

140,000

120,000

Farmer/Fisherman
Housewife
Private Employee
Student
Teacher
Retired

21%
PRIVATE EMPLOYEES

100,000

80,000

15%
GOVT EMPLOYEES

60,000

40,000

20,000

Dec- Mar Jun Sep Dec- Mar Jun Sep Dec- Mar Jun Sep Dec- Mar Jun Sep Dec- Mar Jun Sep Dec- Mar Jun Sep Dec00
01
02
03
04
05
06

PRICING
COMPARISON
BLAZE

HONDA

KAWASAKI

SUSUKI

YAMAHA

Other China

100 -110 CC

P 37K

P 46.9K

P 42.9K

P 50.5K

P 48K

P 35 - 40K

125 CC

N/A

P 60.5K

P 59.9K

P54.37K

P 62.8K

150 CC

P 47K

P 71K**

P 69.5K **

P 62.8K

P 68.7K

P45K - 50K

Displacement

NOTES :
1. All prices are Standard Selling Prices (SRP)
2.
3.
4.
5.
6.

N/A means this model or engine displacement is not currently being offered or carried.
When there are two or more model in one engine displacement (ex. 150CC) the average price was computed.
When prices between dealers differed, the lower price canvassed was used.
Differences in features like disk or drum bakes for front or rear, electric kick start, etc. were assumed to even out
** Extrapolated prices computed

The company expects to maximize the utilization of their dealers and service outlets to gather and provide
the information about the voice of the customer. In addition to these, their website and chat forum could be
best avenue to communicate and address customer questions and concerns.

MARKET DEMOGRAPHICS
Geographics
Blaze has the whole country as its geographic target market. With its website and nationwide
dealership reaching from north to south, the company can serve, in terms of sales and service,
the whole archipelago.
Demographics
The companys demographic target market is both male and female with the necessary driving
requirements and skills.
Behavior Factors
A matured-vehicle driving attitude and sees mobility and convenience as an affordable
privilege.

Strategy to meet MARKET NEEDS and Gain Market Share

Blaze aims to provide the current, as well as, the prospective customers with an alternative that will address
the following needs:

Affordability
The company realizes that along with the initial acquisition costs, affordable maintenance cost and expenses
are among the qualities that customers look for and which will create loyalty to the product.

Assurance
The motorbike designs was a product of well-studied alternatives to ensure the best possible materials and
manufacturing processes were employed to provide the customer with peace of mind.

Availability
The company believes that service goes hand-in-hand with the guaranteed availability of needed spare parts
and accessories to keep the motorbikes in excellent running condition. From a simple decal needed for the
customers signature identity to important spare component needed to keep the bikes excellent running
condition the company will coordinate with customers and dealers to ensure these are always available and
just a short distance from where it is needed.

Distribution
The company initially utilized their corporate partners dealership network. Ten outlet/dealers were
initially chosen to introduce/launch the product in the market. These ten were selected to cover the key
areas in the country.
The number of dealers has been increased. Both internal and external dealerships are now being
developed. Development of dealers includes seminars that cover product orientation, mechanic
training, outlet impact (one- shop concept) and spare parts inventory management.

Advertising and Promotions

The company has communicated their products existence and advantages through their networks
(dealers and service centers), industry magazines, word-of-mouth and website forums.
The company has initially not utilized the other advertising medium like billboards, radio and
television.

Customer Service
In line with the companys strategy it guarantees availability not only of motorcycle units but also the
needed accessories and spare parts. Their one-stop shop (Salon-concept) is geared towards total
customer convenience and satisfaction. They ensure that each dealer has adequate inventory and
utilizes an on-line inventory tracking system. This is complimented with a Mechanic Training course
for the dealers repair person.

Design Innovations
Innovative designs like larger luggage carrier, smaller tire and the under-bone structure will not only
differentiate the product from those existing and dominating the market today but also address some of
the features currently being sought by the customers. The company attempts to fuse or merge the best
that China-made and Japan-made products can offer.

MARKETING BUDGET
The company has a marketing budget equal to three percent (3%) of annual Sales figures. This includes a
one-time new dealer marketing budget of P 300,000 to support the start-up operation.

Actual and TARGET Market Share

For 2007, the company was able to capture less than one-half percent of the total market share (or
approximately 13% of the China brand market).
For 2008, the companys market share target is 1.5% (more than 8,000 units sold target) and a twenty percent
(20%) increase in market share for each succeeding year.