The entry level motorcycles segment, which covers all 100-110 cc bikes, continues to sell 6-6.5 million units every year. This is despite the fact that its share has dipped to 50 per cent from record 80 per cent few years ago. India's third largest two wheeler manufacturer, Honda Motorcycle and Scooter India (HMSI) launched the new Dream Yuga to foray into this huge segment. The new 110 cc bike, priced at Rs. 48,028 (ex-showroom, Mumbai), was developed keeping the rural market of the country in mind as it offers the best mileage in the line-up of Honda. President and Chief Executive Officer (CEO), HMSI, Keita Muramatsu is confident about the new bike and is aiming to take its share to a fifth of the market.
On being asked if the company is planning to develop more bikes to suit the Indian masses, Muramatsu stated that the company has already set-up Honda Research and Development India (HRDI) at Manesar. This facility is located very close to its plant as the company insists on using local material and technology. The R&D unit is already working on this agenda as the new Dream Yuga was almost fully localised with the exception of some parts. He further said that HMSI has been trying to develop a bike with cent per cent localisation and custom made for the Indian terrains and conditions. The company has to keep a tab on how to deliver a high quality, low-cost products with high performance and high mileage.
Speaking on the sales network of Honda Motorcycles, the CEO expressed that it has been expanding its dealership network in the country and expects to reach 2,000 dealerships in 2012, from 1,500 showrooms last year. Due to India's sheer size, he feels the need to expand the dealership base.
Since HMSI deals in both motorcycles and scooters, Muramatsu said at present the split in sales volume between two segments is nearly shared in half, with Activa being the best-seller. However, the crowd may favour motorcycles a bit now that the Yuga has been launched. In FY 2012, HMSI had total production capacity of 2.7 million units annually. It is looking at increasing its market share to 17-18 per cent in the coming year from 15 per cent in last fiscal.
Riding high on Yuga's success, the two wheeler manufacturer has set a sales target of 27.5 lac units for this fiscal, with 3 lac units of Yuga alone. In this fiscal the two wheeler industry is speculated to grow by 12 per cent, though Honda has already marked a growth of 50 per cent till date in this year.
Answering a query regarding the impact of hike in the price of petrol, Muramatsu stated, “The impact is felt on the four-wheeler segment more. In the two-wheeler segment, the customer may prolong his next buy, or change to a new motorcycle. But, if petrol costs go up by 10 per cent, then our mileage should also go up by 10 per cent. This is the challenge for Honda.”
