HeroMoto leads in Oct sales after shedding Honda

Riding high on rural demand, Hero continued its brisk monthly sales of 500,000 two-wheelers for the past 12 months despite the breakup with Japanese partner Honda and name change. Honda after the breakup is gearing up to add fresh capacity each month at its second facility in Rajasthan to push up its sales.

Hero MotoCorp sold 3.58 million two-wheelers between April and September 2011, growing 19 per cent, while Honda Motorcycle and Scooter India grew 14 per cent at 1.10 million units during same period. However, Honda is set to outpace Hero MotoCorp in sales growth rate this financial year.

While Honda’s capacity expansion in Rajasthan has increased its monthly output to 178,000 units in October 2011 from 136,000 in April 2011, Hero’s capacity has remained at around 500,000 units per month over the past year.

“Our monthly production will reach 195,000 to 200,000 units per month by March 2012. Since last year, we are selling all we make and will continue to do so with an aim to bring down the waiting period on Activa, Shine and Unicorn,” a senior HMSI official said. Hero, on the other hand, has not made any immediate capacity addition announcement for 2011-12.

Hero MotoCorp aims to finish with sales of around six million units compared with 5.4 million units last fiscal, while HMSI aims to make and sell 2.1 million units against last year’s 1.55 million. While Hero MotoCorp’s sales growth at this rate would end up being around 11 per cent, Honda’s growth due to fresh capacity in coming months would be around 35.48 per cent.

According to Abdul Majeed, auto practice leader at PwC, growth will continue to come for both HMSI and Hero Honda, which changed its name to Hero MotoCorp on August 9 this year due to strong underlying potential of two-wheeler market. “People are really not looking at alliances involved in a product but the product as a whole apart from customer requirement. Whichever company focuses on these two, will always have market share and growth,” Majeed added.