Honda Motor bets on 100-cc bikes for rural push in India

Japan's Honda Motor, the world's largest motorcycle maker, is betting on the small capacity 100-cc economy bikes as it embarks upon a rural push in the world's second biggest two-wheeler market, said people with knowledge of the development. The Tokyo-based firm, which separated from its long-term Indian partner turned competitor Hero MotoCorp, has appointed five management teams across India led by Japanese executives to create a new decentralised marketing structure for consistent sales, people from the industry told ET.

The Japanese two-wheeler maker is working on a new version of the CD platform in the 100-cc segment, where Hero's CD Dawn and CD Deluxe have the highest sales. Honda's new bike based on the 100-cc technology is targeted at India's vast rural hinterland that contributes almost half of the volumes to the nearly 5 million bikes Hero sells every year. The thrust on rural market is a reversal of sales strategy for Honda, which has so far been garnering most of its sales from cities and big towns.

"The company is currently focusing and tweaking bikes relevant for the Indian market to get closer to the customer ," said Abdul Majeed, auto practice leader, PwC. The 100-cc bikes laid foundation for Hero MotoCorp, erstwhile Hero Honda , to emerge as world's largest twowheeler firm in terms of volumes. Last year, Honda sold its 26% stake in Hero Honda to India's Munjal family while the technology agreement between Hero and Honda permits the former to use the joint name in products till 2014.

Honda, which owns the CD brand globally jointly with Hero, is likely to bring in a new improved engine with fresh design cues to attract young and rural India. Hero's claim on the CD brand exists only till 2014, by when Honda wants to emerge as a major player in the Indian circuit. Honda Motor did not reply to an email query from ET about its rural thrust and new marketing strategy. However, the company said it aims to emerge as a major player in India in the next few years as it comes up with strategies to consolidate.