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Mr Brijmohan Lall Munjal, Chairman, Hero Honda Motors Ltd, at a press conference to launch the 125 cc motorcycle, Super Splendour, in Mumbai on Thursday. — Shashi Ashiwal

Mumbai , March 3

HERO Honda Motors Ltd today introduced a new 125 cc motorcycle called `Super Splendour'.

According to Mr Atul Sobti, Executive Director (Business Operations) Hero Honda, it will cost on the average Rs 42,500 nationwide.

Its engine, one of the two `core' engines developed so far by Honda Motor Company, provides 5 km more per litre of petrol when compared to the existing Splendour, plus increased power.

"It is the first of a few engines that we will launch. It is the first of a few core engines exclusively developed for Hero Honda by Honda Motor Company," Mr Sobti said at a press briefing.

In reply to questions about the apparent competition between Honda Motorcycle & Scooter India and Hero Honda, senior officials claimed that was not the case and there was much co-ordination between the companies.

"Both the companies are going to stay independent. Hurting either of us does not arise," said Mr Brijmohan Lall, Chairman, Hero Honda.

Honda's own motorcycles in India were directed more at Hero Honda's competition rather than the models from the Hero Honda stable, officials said.

While no sales target for the Super Splendour was disclosed, the company hopes to sell more than its predecessor, the Splendour. On Hero Honda likely vacating or going slow on the 100 cc segment, Mr Sobti said, "We will leave that to the customer."

The company is expected to decide soon on its plans for a third plant. "We are fully equipped to meet the demand for this year and the next with the existing plants," said Mr Pawan Munjal, Managing Director, Hero Honda.

Despite the year starting weak, Mr Sobti said he expected the two-wheeler market to show a 17 per cent growth, including a 20 per cent growth for the motorcycle segment and a 27 per cent growth for Hero Honda. Next year, he expects the two-wheeler market growth rate to be at least 15 per cent.

Mr Munjal, however, conceded that margins for the company would continue to be under pressure given the rise in raw material prices. There are also price discounts currently on for its products and the company needs to decide how long that must continue.

"Maybe the profits won't be like in previous years. But going forward we would like to both increase market share and improve margins," he said.

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