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Honda Motorcycle in caution mode on re-starting operations

Murali Gopalan Mumbai | Updated on June 02, 2020 Published on June 02, 2020

Honda’s plant in Ahmedabad (file pic)   -  THE HINDU

Among the many challenges are getting people back to work, says official

Honda Motorcycle & Scooter India (HMSI) is taking one step at a time in the post-lockdown phase which kicked in from Monday as Unlock 1.0.

“It will take three months to get back to 50 per cent levels which means half the fiscal is gone. It has been tough going for the industry, first with the economic slowdown and now Covid-19,” Yadvinder Singh Guleria, Director, Sales & Marketing, told BusinessLine in a phone interview.

HMSI recently announced its intent to reopen its Karnataka plant, its single largest global two-wheeler facility with a capacity of 2.4 million units. The other three plants in Gujarat, Rajasthan and Haryana, which account for a combined four million units, will follow suit during the course of this week and next.

“Opening our plants is a humongous task with different suppliers located across the country. There is also the challenge of getting people back to work,” said Guleria. The problem will be accentuated with migrants not likely to return to cities anytime soon which means added pressure on vehicle makers and ancillary suppliers.

“There will be limited workforce available right now but the bigger challenge will happen post-June. Easing the lockdown does not mean that Covid-19 has disappeared and the worry is that a new wave of cases will emerge,” cautioned Guleria.

For now, the existing workforce at HMSI can handle operations in June but there are other issues to contend with. “We are worried about the west, especially Gujarat and Maharashtra, which are big markets for us,” he added.

Pune and Mumbai have been the worst hit during the pandemic and till they open up completely, HMSI believes it is important to “be more cautious”. The company is the leading two-wheeler player in both Maharashtra and Gujarat.

According to Guleria, the other parts of the country are doing relatively better for now especially the east which has been particularly “positive on retail momentum”. The South is on track too while North and Central India, which are agrarian regions, have been facing some headwinds.

The good news in this grim backdrop is that service numbers at HMSI workshops are increasing along with daily retails. “There were dealerships sitting on the boundary line which were undecided about starting. Spreading a positive message was important and sharing experiences motivated other dealers to open up,” said Guleria.

According to him, there is a positive momentum now in place. During the lockdown, dealers got better acquainted with e-learning and reached out to customers. “Understanding their concerns was more important than making sales pitch calls,” he added.

This meant checking out their health and wellbeing first before discussing their “purchasing intentions”. The results coming in are encouraging: nearly 45 per cent of people who made enquiries before the lockdown are still keen on buying their motorcycle or scooter within the first month of opening the showroom.

Buyer interest

Another piece of good news is that nearly 80 per cent said they would buy within three months. “They have not shelved their plans which was important for us to understand especially in these difficult times,” said Guleria.

A dipstick study carried out by HMSI showed that a section of customers also bought its products owing to the need for social distancing coupled with paranoia about pubic transport. From the company’s point of view, this was intriguing since these were not the same buyers who made enquiries before the lockdown.

“We are seeing early signs of this trend. It is not a high percentage but still interesting because this was not a trigger point earlier,” said Guleria. These people clearly wanted to buy a two-wheeler because of the Covid-19 crisis.

Some of these customers were part of the essential services ecosystem while others needed to go to work but had no mode of transport. The best option was a two-wheeler both in terms of acquisition and operating costs. “It is too early to say if this trend will last. Nobody knows what the future has in store right now,” admitted Guleria.

Published on June 02, 2020
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