It seems that the dissociation between erstwhile partners Hero MotoCorp and Honda Motorcycles and Scooters India (HMSI) has been beneficial for both companies. Over two years have passed since this separation took place and on 11th March, Honda said that it could beat Hero MotoCorp as the leading two wheeler manufacturer in the country by 2015. As per the Japanese manufacturer's earlier target, this move has shifted 5 years ahead of its previous goal of 2020.
While sales for Honda have grown in the current fiscal, it came down for Hero MotoCorp. The sales of latter went down by 1.2 per cent, while Honda reported a strong growth of 33 per cent during the same period. Interestingly, Honda’s sales figures are remarkable ahead of the 4 per cent industry average. Due to this increase, Honda's market share in the two-wheeler segment also went up. In fact, HMSI was able to leap ahead of Bajaj Auto to the number two spot. Expressing his satisfaction over the growth, Shinji Aoyama, Operating officer, Honda Motor, was quoted as saying, “Today the market is almost 14,000,000 units in India. So, if it remains at this level, with no growth happening, we may become number one in 2015 or 2016. Honda is gaining market share while they (Hero MotoCorp) are losing share. I think this trend will continue.”
In lieu of its expansion plans for India, Honda is also increasing its production capacity from 2.8 million units a year to 4 million. This would take place by the end of March 2014 with the addition of a third factory in Karnataka. The company may even look at the establishment of a fourth unit once the third one is fully operational.
Aoyama further added that the auto maker is not considering the threat of competition from Hero MotoCorp as great as the threat from Bajaj Auto. He said that Indian customers already had faith in the Honda brand and its technology, due to which tensions were not faced. “We have no support from Hero now and it is not necessary. We knew the consumers had faith in our technology. Yes, in terms of numbers, still Hero is number one but very frankly speaking, the consolidated power, including research and development (R&D), sales network there, including many of these elements, I think Bajaj is very strong. Bajaj is very good at creating alliance,” he added.