Honda plans to test the waters with Navi

Love it or hate it but it was difficult to ignore the Navi at the Delhi Auto Expo. As visitors pondered if the product was a scooter or bike and reactions were as diverse as India’s landscape, Honda’s new offering became one of the biggest talking points of the event.

Yet, Shinji Aoyama did not seem unduly excited with all this attention. “To tell you frankly, we are not aiming at very high volumes with the Navi. We will start off with small numbers, watch what will happen in the market and then plan the next step,” said Honda Motor Company’s Chief Operating Officer for Motorcycle Operations in an exclusive interview.

Aoyama had flown in from Japan for the Expo which pretty much puts in context the importance of India to his company. The fact that he headed operations at HMSI (Honda Motorcycle & Scooter India) till a couple of years ago makes him more than familiar with the country.

The Navi is based on an existing scooter platform which means that investments were not substantial. More importantly, it is the first product created from scratch by the India R&D team. “The people here at HMSI found out there are youngsters in India getting tired of sameness of the product. Not all, but some youngsters who felt this way,” elaborated Aoyama.

This was the starting point for the Navi’s journey where the idea was to invent something new while keeping the price low. As he hinted, the Navi is “the first answer” in this endeavour and there will perhaps be a couple of more products that will follow based on market response and buyer requirements.

Whether the Navi will be a disruptive product in India’s competitive two-wheeler arena is a million dollar question. Some of Honda’s rival companies believe that it is capable of doing this while others reiterate that the offering is not likely to find too many takers. According to them, the Navi could only appeal to a niche base of young male buyers who are on the lookout for something funky and cool. As a result, they add, its volumes will be little to write home about.

Aoyama, likewise, believes these are early days yet for the Navi and the purpose of the launch is to primarily gauge market response. According to him, it is important for Honda “to think of something different in India” especially when automatic scooter volumes have been surging ahead of 100cc motorcycles. “This trend is good for us in terms of extending applications in the automatic arena,” he said.

This makes sense especially in the context of the first mover advantage where HMSI was the trailblazer with the Activa. However, it has not managed to make much headway with commuter motorcycles where its former ally, Hero, still rules the roost with its Splendor brand.

The Shine is, however, doing well in the 125cc motorcycle space and the company is betting big on the recently launched CB Hornet at the premium end.

The challenge, though, is the commuter segment where HMSI has led the way in scooters and wants to leverage this advantage with products like the Navi. As Aoyama said, the Indian market is growing and the priority is to constantly focus on a host of initiatives. In his view, increasing Activa sales is perhaps “getting to be easy” and the need of the hour is to have more challenges like Navi.

“People might feel too comfortable, otherwise, and this not a good thing. In a positive way, there should be some pressure on us to keep staying ahead,” he said.

And even while HMSI is the second largest player in India’s two-wheeler market, he believes there is a lot more that can be done from the viewpoint of building a stronger brand image.

“By introducing these kinds of products, we may have a positive brand image which may lead the industry by providing something new,” added Aoyama. The Navi is, therefore, a critical part of this exercise and even if numbers are slow in coming, it will give Honda a clear idea of where it needs to fix things and take the script to the next stage.

The following week will see HMSI inaugurate its new plant in Gujarat and the fourth in India. Earmarked exclusively for scooters, it will have a capacity of 1.2 million units and will take the company’s total production to 5.8 million units by end-2016. The next step is to increase capacity at its Karnataka facility to 2.4 million units which will translate into an overall 6.4 million two-wheelers by 2017-18.

Today, the Indian two-wheeler market is 16 million units of which HMSI’s share is nearly 30 per cent.

Once Gujarat is in place, this will be up to nearly 35 per cent and further to 40 per cent with the Karnataka expansion, assuming of course that the overall market will be flat at 16 million units. This is an unlikely possibility especially with Hero, Bajaj and TVS revving up with a slew of product launches.

“For us, No 1 means something good for customers and to what extent we will keep them satisfied. We may be No 1 or 2 in the market eventually but the level of customer satisfaction should be our No 1 priority,” declared Aoyama.

COMMENT NOW