The Hindu Business Line : Hero Honda’s new facility on track, despite slowdown

Snapshot
The company expects the domestic market to absorb the additional capacity that will be generated.
It is evaluating newer export markets and planning to penetrate deeper into its existing turf

Priyanka Vyas

New Delhi, Dec. 27

With just four months left for Hero Honda to commission its third manufacturing facility, the company said that despite the ongoing dip in the motorcycles market its plans are on track and no further delay is likely.

While the company expects the domestic market to absorb the additional capacity that will be generated, it is also firming up plans to penetrate deeper into the export market.

“Despite the current slowdown, if the company is able to sustain the same pace of growth that continued over the last two to three months, then it will be in line with our plan,” said Mr Anil Dua, Vice-President, Sales and Marketing.

The company, which had earlier announced its plans to start manufacturing by October, had then said that declining sales was forcing it to delay manufacturing at its upcoming facility at Haridwar.

Sales & production

Amidst the ensuing slowdown, Hero Honda had cut down production during November by about 10 per cent compared to the corresponding month last year. However, sales rose by 3 per cent last month over the corresponding period last year.

Cumulative during April-November, both production and sales remained almost at the same level for the two-wheeler maker.

For other players like Bajaj and TVS, the decline in production and sales was sharper.

This was mainly driven by high interest rates that discouraged consumers from buying.

Mr Dua said, “Unless consumers go for another round of postponing purchases, we are expecting demand from consumers who had withheld their plans but may not be able to delay them any further.”

New markets

On the exports front, Hero Honda is evaluating newer export markets and planning to penetrate deeper into its existing turf.

This is despite its limitation to restrict itself to only those markets where its partner Honda Motor Co Japan is not present.

“We are primarily selling in the Latin American and South Asian markets and will continue to look at growing in these markets,” said Mr Dua.

More Stories on : Two/Three Wheelers | New Projects | Hero Honda Motors Ltd

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