Honda company targeting market leadership position by 2015

Tuesday 12 March 2013, 17:43 PM by

Honda Motorcycles & Scooters India (HMSI), the domestic division of Japanese auto maker, has declared that it will outpace its erstwhile partner, also the current market leader, Hero MotoCorp by the end of 2015. Reportedly, the two-wheeler manufacturer earlier decided to target the top notch position by 2020, which has been now moved ahead owing to the aggressive plans of the company. Following the same, HMSI has decided to introduce 3 new entry level 100 cc bikes in the Indian auto market, which will target the dominance of much acclaimed Hero Splendor.

Along with, the Global Motorcycle Head of HMSI, Shinji Aoyama said that the company is ready to extend the technical alliance with Hero MotoCorp after 2014. When asked about the new launches, Aoyama said “There is a plan for a low-cost bike in the future, but I can’t tell you when exactly will that happen.”

 Honda company targeting market leadership position by 2015 | CarTrade.com
Honda company targeting market leadership position by 2015

Besides, Honda also exhibited a new motorcycle for the 150 cc segment, CB Trigger, which is expected to compete against the likes of Hero Xtreme and Hunk, along with Bajaj Pulsar and Discover 150. He further said, “The current market size in India is 1.4 crore (14 million). If it remains at the same levels, no growth happening, we may be number one by 2015-16. But once growth happens, Hero (MotoCorp) and Bajaj (Auto) have more capacity and room to produce at the present condition.”

It must be noted that the two-wheeler market of the Indian auto industry has been dwindling since fiscal 2011, when it increased by 25.8 per cent. According to the apex auto industry, Society of Indian Automotive Manufacturers (SIAM), the market share of Hero MotoCorp Limited also witnessed a dip by almost 2 per cent, coming to 43 per cent in the current financial year. During the period, the figures of Bajaj and Honda stood at 18 per cent and 18.6 per cent, respectively.

Aoyama said, “From the view of Honda, Hero is still very important (competitor). But very frankly speaking, in terms of R&D (research and development) and many other elements, I think Bajaj is very strong. They are very good at creating and managing alliances. They have alliances with KTM, Kawasaki.” Reportedly, the auto maker is looking ahead to plan the launch of 1 model in every quarter, which is anticipated to generate a buzz among the Indian auto aficionados. “We have a growth of 54 per cent in motorcycles and have bookings of over 70,000 in scooters. Our new plant in Karnataka will be operational in three months. Let’s talk about the volumes then,” he added later.

Besides, as a part of expansion plan, the auto company is also finalising the location in order to establish its fourth production unit in the country. As reported in November 2011, HMSI was aiming to emerge as India’s leading two-wheeler manufacturer with an annual production capacity of at least 10 million units. According to sources, before the end of June 2013, the auto maker will have a total production potential of 4 million units annually, whereas Hero already has a capacity of rolling out 7 million units.

On this, the Senior Vice-President (Equity Research) of Fortune Equity Brokers (India) Limited, Mahantesh Sabarad, was quoted as saying, “The real problem for Honda will start when they will start penetrating the rural markets, and one should understand Indian market is very federalistic in nature. Even Bajaj and TVS (Motor) have not been able to penetrate that market so far and Honda can’t sell scooters in those markets either.”