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HMSI to power Honda global ride

Murali Gopalan | Updated on August 13, 2020 Published on August 13, 2020

Atsushi Ogata, President, CEO and MD, HMSI

Bikes, scooters will head out from India to developed markets

Atsushi Ogata has taken over as President, CEO and Managing Director of Honda Motorcycle & Scooter India (HMSI) at a time when Covid-19 is still on the rampage.

Yet, he believes there is no better time to take the growth story forward in what he terms the “biggest potential market”. As he reasons, it is only a matter of time before “Covid-19 disappears” which will give him enough time to get HMSI firing on all cylinders.

Ogata has clearly been keeping track of India even while he has been on a host of overseas assignments for Honda. He rattles off facts on Bharat Stage VI emission norms, a “new weapon” which can meet Euro V regulations in Europe, Japan, Korea “or wherever”.

He then refers to the strong supply chain and HMSI’s production capacity in India at 6.4 million units spread across facilities in Haryana, Rajasthan, Karnataka and Gujarat. “Among Honda associates in the motorcycle industry, HMSI has the strongest resources of quality, cost and delivery,” says an upbeat Ogata.

The company has “enough product line-ups” with the near future throwing up more. Hence, “such kind of new model production or development” can comfortably be considered within India. Honda head-quarters in Japan is also looking at expanding the global role of India, which will go beyond exports to developing countries in Africa or South America, to include Europe, Japan, Korea, Taiwan, Australia and so on.

“HMSI has the biggest export resources among Honda group,” says Ogata. For the present, though, he is more than aware of the economic slowdown preceding the pandemic as well as “stressful issues” relating to automakers’ investments on production capacity, new models for Bharat Stage VI, CAFE regulations, electric vehicles (EVs) and so on.

In this grim backdrop, Covid-19 has only added fuel to the fire except that it has been impartial in its impact, compelling every company to start from level zero. “It is a good starting point for HMSI because, fortunately or otherwise, our market share is still not a majority at less than 30 per cent,” explains Ogata.

In contrast, Honda has a commanding presence in other Asian countries though the markets there may have already peaked out. “It’s only India that has big potential and Covid-19 will enhance this with new customers,” he says. The reasoning is based on the fact that people would prefer to avoid trains or buses and opt for personal mobility options instead.

More digital purchasing

“From now, we are gearing up to see new customers and I believe it is a bright future for HMSI,” says Ogata. Yet, he believes that the “procedure of purchasing” by these new buyers will be different from normal practice. “As with online shopping, there will be more digital purchasing…such new category customers will be there for our industry who may not go directly to dealers,” elaborates the HMSI chief. Hence, it is important to think of additional investments to implement “such kinds of digital infrastructure” both at the company and dealership levels to attract these buyers.

Ogata then cites the example of Korea where the Covid-19 impact saw “businessmen and students forced to stay back in their homes”. However, delivery orders from restaurants increased because they needed to eat and mobility became an imperative.

In the process, this spurred demand for scooters/motorcycles where numbers for Honda more than doubled from last year. “Beyond Korea, demand grew rapidly in Australia, Taiwan, Japan, Bangladesh and Pakistan. I believe that this kind of new demand will come from India too,” he says. For now, Ogata’s top priority at HMSI is to put the building blocks back in place after the severe impact of the initial lockdown, which saw plants shut down and sales come to a grinding halt. “How to make a recovery from now till the end of this fiscal is important,” he says.

Volume-wise, it would be a tall order to reach full capacity and use all assembly lines optimally by the end of March 2021. The most important task on hand is to “bring back the company to financial strength”. For now, there is no likelihood of any lockdown happening next fiscal, which means “automatically, our financial situation will improve with rapid increase of volumes”.

In the past, admits Ogata, HMSI was eyeing more market share and volumes but there is really no need for that at this point in time. “From now, after we build the company strongly, we will try to gain market share without (offering) huge incentives. Sometimes, OEMs buy market share this way but I do not want to do that,” he reiterates.

On the contrary, says the HMSI chief, it is important to “believe and trust” the Honda philosophy and its core DNA. Even while the company’s products are a “bit more expensive”, customers across Europe and ASEAN have had no issues because they “find it easy to understand what Honda is all about”.

China is a different ballgame because there are cheaper options available which almost resemble the original. Customers are quite pleased to access such copied products since they come at substantial discounts compared to an original bike or scooter brand.

“However, India is quite different…Indian companies are global players and we need to respect them. My challenge here is to transfer the essence of the Honda brand to the customer through our main dealer network,” says Ogata. This would mean articulating the company’s history and milestones in technology, racing and so on.

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Published on August 13, 2020
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