September was a memorable month for Honda Motorcycle and Scooter India with sales touching an all-time high of 4.38 lakh units, 33 per cent up from last year. In the process, the company’s sales in the first half of this fiscal totalled 2.2 million units, making it the second largest player after former ally, Hero MotoCorp.

Way to the top

On the face of it, HMSI has reason to celebrate, especially with its scooter sales now averaging nearly 2.4 lakh units each month. Motorcycles account for 1.8 lakh units (exports take up the balance 18,000 units) but there is still a lot of ground to cover before it catches up with Hero’s numbers.

“Scooters are doing better for sure but bikes are the bigger market and we need to do something different like providing additional technology across each segment,” says Keita Muramatsu, President and CEO. The idea is to do something unique which reflects the Honda DNA, he adds.

The Dream Series was intended to meet market needs in the mass commuter segment where Hero literally rules the roost. Not everyone within industry circles is convinced, however, that the Yuga and Neo have made a substantial impact with some insisting that they are pretty much like Hero’s range. According to them, the Shine and Unicorn are doing a lot better especially from the viewpoint of reflecting Brand Honda.

Opinions could be divided on this issue but the Japanese automaker is keeping a careful eye on market trends and evaluating customer feedback. It is keen to grow numbers in India which will eventually emerge its largest-selling market, ahead of Indonesia and Vietnam, over the next two - three years.

Village vision

Rural markets are an important part of the growth strategy especially for bikes where a beginning has already been made with the CD 110 Dream at a competitive price tag of ₹ 41,000. This brand was, till recently, part of Hero’s entry level series which has since been rechristened HF. HMSI will be hoping that the CD brand recall draws customers to its retail outlets.

“The CD was an important part of the top-down rural strategy though we have not made an all-India launch yet. The idea was to focus on those areas where low-end bikes are large in numbers,” says Yadvinder S Guleria, Vice-President (Sales and Marketing).

HMSI launched the CD Dream in Uttar Pradesh and Rajasthan with Madhya Pradesh and Gujarat tipped to follow. This is keeping in line with greater demand for such entry options in northern and central India.

At the time of launching the rural drive this year, HMSI had targeted sales in the ratio of nine bikes to one scooter. This made sense given that it only has a 10 per cent share in the mass bike segment. Yet, the ratio has already changed to 8:2 with demand for its automatic scooters also on the rise in rural India.

“We are working really hard on our rural network and building awareness is the biggest task going forward. Customers who buy our products are quite satisfied but we need to reach out more aggressively in service,” admits Muramatsu.

Better service

HMSI has 800 operating dealers right now and the ‘Service-on-Wheels’ initiative has catered to over one lakh customers since March. To take this forward as a planned activity on a monthly basis, the company recently launched a mobile service van. According to Guleria, this will have proper mapping of virgin areas in terms of service facility. The van will also be equipped with audiovisual equipment, washing facilities, generator sets and a training work base.

“One lesson from our rural drive was that the customer is willing to go 30-40 kilometres to buy a scooter, but when it comes to service, he is not willing to go beyond 10 kilometres. Buying is a one-time experience and there was a need to provide mobile vans,” he says. There will be 11 vans by the end of this fiscal.

HMSI is only too aware that it is responsible for helping customers in parts and service. It is even more important to train people in taking care of Honda two-wheelers and this is where the mobile service vans have come in handy. The AV equipment allows the company to have a class and conduct private workshops through videos. As a result, people involved in the exercise become Honda-trained technicians.

“This is a new concept where they do not need to come to our training centre but we train them on the basics by going there and helping them provide assistance to any customer,” Guleria says.

The commissioning of HMSI’s new plant in Gujarat is delayed by three months and will now be ready during the January-March quarter of 2016. The company’s overall capacity will reach 5.8 million units towards the end of that year. “By the time Gujarat is ready, our rural drive will be over too and the lessons/action plan will be in place too,” he adds.

Gujarat will be devoted exclusively to manufacture of scooters. As a result, it will help free capacity for bikes in the remaining three facilities located in Haryana, Rajasthan and Karnataka. HMSI has a centralised corporate planning structure which aims to align production of models with respective factories while keeping an eye on viability during such allocation.

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