Honda brass in India next yr; focus on low-cost bikes

To chalk out a new strategy for the Indian market once the final separation from its 26-year-old partner Hero Group is worked out, top officials from Honda Motors Japan are slated to visit the Indian subsidiary Honda Motorcycle & Scooter India (HMSI) early next year. The global CEO of Honda Takanobu Ito is also likely to be a part of the delegation.

Industry sources told FE that the main focus of the visiting delegation would be to penetrate every segment in the country with a special emphasis on 100-125cc category and strengthen its dealership network and vendor base. Interestingly, this is the segment in which Hero Honda has traditionally enjoyed a market share of over 60%.

“Globally, Honda bikes are known for being premium and super cool. However, in India the company would also adopt the low-cost approach,” a source said. Though the company spokesperson denied any such plans, sources said HMSI’s role in the two-wheeler market would get a fillip after the split.

Sources also pointed out since Honda was already the largest scooter maker in India, it gave the company an added advantage in the motorcycle space as well. “The company has now two tasks cut out for it. One, it needs to strengthen its vendor base in India like the Hero Group and control costs. Second, it has to fast-track dealership network in all the major cities and rural markets to increase rural penetration,” an auto analyst with a global consultancy firm said.

Earlier, in a presentation this year on the group's global strategy for the next 10 years, Honda CEO Ito had highlighted the motorcycle segment in India and China as growth markets.

As per the plan, the company decided to increase the annual bike capacity to 18 million units from 16 million units by the end of next year. In fact, in line with its global strategy to concentrate on emerging markets like India and China, the company launched the much awaited small car 'Brio' last month at Bangkok.

Currently, HMSI has an annual production capacity of 1.6 million units, which would be expanded to 2.2 million units once its second plant at Rajasthan becomes operational by the second half of next year.