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Honda is expected to go flat out with its India two-wheeler business this fiscal.
The company's 100 per cent arm, HMSI (Honda Motorcycle & Scooter India) wrapped up 2011-12 with 2.1 million motorcycles and scooters, translating into a market share of 14 per cent. What is significant, though, is that its volumes grew 27 per cent over FY '11 thanks to the commissioning of its second plant in Rajasthan.
“HMSI is the company to watch out for in the coming years. We expect it to post sales of over three million units this fiscal with Rajasthan and Manesar clocking 100 per cent capacity,” a top auto CEO told Business Line.
Third plant
The company has already identified a third plant in Karnataka where the annual numbers will be 1.8 million units.
Full capacity here is expected to be reached over the next two years which means HMSI will step into 2014-15 with nearly five million bikes and scooters annually.
Number games
Market leader, Hero MotoCorp, is way ahead in the numbers game. It closed FY '12 with 6.23 million units and will look to maintain 15 per cent growth this fiscal which will result in over seven million units.
Bajaj Auto is targeting five million units with bikes taking up the lion's share and commercial vehicles accounting for the balance.
TVS Motor, which closed FY '12 with 2.2 million units, will also be eyeing a growth of over ten per cent.
Honda's strategy
The two-wheeler industry, though, is watching HMSI with keen interest especially when the leadership stakes involve its former ally, Hero MotoCorp.
“We expect to see an intense tug-of-war. The Munjals are not going to yield their top slot in a hurry and Honda will have to think of something dramatic that can succeed in relegating the Splendor and Passion brands to the sidelines,” an industry veteran said.
This is not going to be an easy task considering that these bikes take up half of Hero MotoCorp's sales and have a tremendous connect with customers. Honda will, of course, bet on a growing base of young bike enthusiasts who are open to change and eager to try out something different.
The script has worked to perfection in the gearless scooter space where the Activa-led brigade is miles ahead of competition.
However, Honda's motorcycles have not created the same impact with numbers still way below the scooter range. “Unless its bike sales surge ahead dramatically, it will not be easy to catch up with Hero,” the veteran added.
While there is no denying the fact that the gearless scooter market has been growing rapidly, motorcycles still take up a large chunk of sales in India.
This was what prompted Bajaj Auto to exit its traditional scooter business and focus solely on bikes where it is keen to double its share in the global arena to 20 per cent.
Privately, Honda's rivals think it is only a matter of time before the company takes over the top mantle in the two-wheeler segment.
It has already made known its intent to grab 30 per cent of the Indian market by 2020. By then, the country will be its largest two-wheeler base in the world and home to some aggressive product development.
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