The Hindu Business Line : Honda bikes ride out the market slump

Mumbai, March 22 While the top-three motorcycle manufacturers are struggling to increase sales, Honda, which is currently positioned fourth, is making steady progress in the domestic market.

From April to February this fiscal, bucking the downtrend in the motorcycle market, Honda Motorcycles and Scooters India (HMSI) posted a 57 per cent growth by selling 2.29 lakh motorcycles. Total motorcycle sales till February this year is down 13 per cent.

“We have seen the proportion of motorcycles in our total vehicle sales growing. Motorcycle contributed 1.7 lakh in the total sales volume of 7.2 lakh units in the last fiscal. This fiscal the share of motorcycle will be 2.7 lakh of the total 8.8 lakh units. Our motorcycle sales are growing in terms of number and market share. We expect to post a 65 per cent growth in motorcycle sales,” said Mr N.K. Rattan, Head Sales and Marketing, HMSI. The company is currently the market leader in the scooter segment.

Credit strategy

While other bike manufacturers attribute the market slump to credit squeeze and look for some respite from two-wheeler financing, Honda appears to have no such worries. “Default ratio on Honda products is the lowest in the market and, hence, banks are inclined to finance Honda two-wheelers,” said Mr Sanjay Gupta, Senior Manager Marketing. The company has its own strategy to get around the credit crisis. “Working with preferred financiers, we offer low rate of interest schemes as per customer requirements. Therefore, there is marginal impact on HMSI’s sale,” he said.

Buoyed by the success of its 125cc Shine and 150cc Unicorn, the company plans to step up motorcycle production. It also plans new launches. “We would be launching a new bike in the first half of 2008-09. In future, we plan to bring premium products in mass segments. We plan to represent all segments, 100cc and higher cc with leading-edge technology,” said Mr Gupta.

Asked about the prospect of introducing Honda’s superbikes in India, he said, “Honda will bring superbikes in India with a lot of responsibility and preparation.” The company is looking at safety and service aspects. “This requires a lot of preparation. We have major concerns on rider’s safety awareness and driving skills,” he said.

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