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Honda aims to challenge market leader Hero MotoCorp with China made models
6 Jan, 2012, 01.44AM IST, Chanchal Pal Chauhan & Lijee Philip,ET Bureau
NEW DELHI: A year after they parted ways, the world's largest two-wheeler maker, Honda, has thrown down the gauntlet at its former partner of 27 years, the Hero Group, with a plan to launch motorcycles at game-changing prices.
Hero MotoCorp, the new avatar of Hero Honda, which accounts for 46% of all bikes sold in India, dominates the market with models like the 100cc CD Dawn, Splendor, Passion and the 125cc Super Splendor.
The Japanese giant, which operates in India through wholly-owned subsidiary Honda Motorcycle & Scooter India (HMSI), hopes to sell 125cc made-in-China models with an ex-showroom price in Delhi of a little over Rs 30,000 - almost Rs 4,000 cheaper than the CD Dawn and Rs 17,000-18,000 cheaper than the Super Splendor.
Honda currently sells such models in African markets like Nigeria.
Tatsuhiro Oyama, senior managing officer & director motorcycle operations at the Japanese giant, told ET: "We are working out plans to gain leadership in the Indian two-wheeler market."
Honda has just launched a 110cc bike, Dream Yuga, to compete in the mass market. "Going forward we are conducting a feasibility study for our low-cost bike that is currently made in China and could be manufactured in India," added Oyama.
RAMPING UP CAPACITY TO MATCH HERO
Along with cost-competitive models, Honda is also busy ramping up capacity to match that of the Munjals-owned Hero MotoCorp. Oyama told ET the company plans to set up a fourth plant in India with an initial capacity of 1.2 million units, entailing an investment of Rs 1,000 crore. The fourth plant will take its cumulative capacity to 5.2 million, not far behind the Munjals, whose current capacity stands at 6.15 million per year.
"We are aiming to sell 10 million two-wheelers in India by 2020 and target a 30% market share to achieve leadership in India. We are market leader in scooters and now the focus is to replicate the same in bikes," said Oyama.
To HMSI goes the credit of revitalising the scooter market after its entry in 2001; today every second scooter sold in the 2 million-unit-per-annum domestic market is a Honda.
It is not just Hero MotoCorp that should be worried about a rampaging Honda. After overtaking TVS to take third position in the two-wheeler market in November, Honda now has No. 2 player Bajaj Auto in its sights. In December 2010, the gap between Honda and the Pune-based two-wheeler major was over a lakh, with the Japanese giant selling 1.41 lakh bikes and Bajaj Auto 2.44 lakh.
A year later, that gap has narrowed. In December 2011, Honda had sales of 1.92 lakh and Bajaj 2.64 lakh. "To me, HMSI is Honda, the world's largest two-wheeler maker," says a cryptic Rajiv Bajaj. The managing director of Bajaj Auto is clearly not underestimating the threat; asked at whose expense will HMSI's growth come - Bajaj's or Hero's - Bajaj replied: "Time will tell."
Bajaj, which has been focusing more on margins than market share, will need to get in more products into the mass market to counter the Honda threat, reckon analysts.
Currently, it has the Boxer but that may not be enough for a company whose volume growth comes largely from three-wheelers and exports. "Bajaj Auto has to look into the 100cc segment to get the volumes and the market share," said VG Ramakrishnan, senior director, automotive practice, Frost & Sullivan.
Source : Honda aims to challenge market leader Hero MotoCorp with China made models - The Economic Times
NEW DELHI: A year after they parted ways, the world's largest two-wheeler maker, Honda, has thrown down the gauntlet at its former partner of 27 years, the Hero Group, with a plan to launch motorcycles at game-changing prices.
Hero MotoCorp, the new avatar of Hero Honda, which accounts for 46% of all bikes sold in India, dominates the market with models like the 100cc CD Dawn, Splendor, Passion and the 125cc Super Splendor.
The Japanese giant, which operates in India through wholly-owned subsidiary Honda Motorcycle & Scooter India (HMSI), hopes to sell 125cc made-in-China models with an ex-showroom price in Delhi of a little over Rs 30,000 - almost Rs 4,000 cheaper than the CD Dawn and Rs 17,000-18,000 cheaper than the Super Splendor.
Honda currently sells such models in African markets like Nigeria.
Tatsuhiro Oyama, senior managing officer & director motorcycle operations at the Japanese giant, told ET: "We are working out plans to gain leadership in the Indian two-wheeler market."
Honda has just launched a 110cc bike, Dream Yuga, to compete in the mass market. "Going forward we are conducting a feasibility study for our low-cost bike that is currently made in China and could be manufactured in India," added Oyama.
Along with cost-competitive models, Honda is also busy ramping up capacity to match that of the Munjals-owned Hero MotoCorp. Oyama told ET the company plans to set up a fourth plant in India with an initial capacity of 1.2 million units, entailing an investment of Rs 1,000 crore. The fourth plant will take its cumulative capacity to 5.2 million, not far behind the Munjals, whose current capacity stands at 6.15 million per year.
"We are aiming to sell 10 million two-wheelers in India by 2020 and target a 30% market share to achieve leadership in India. We are market leader in scooters and now the focus is to replicate the same in bikes," said Oyama.
To HMSI goes the credit of revitalising the scooter market after its entry in 2001; today every second scooter sold in the 2 million-unit-per-annum domestic market is a Honda.
It is not just Hero MotoCorp that should be worried about a rampaging Honda. After overtaking TVS to take third position in the two-wheeler market in November, Honda now has No. 2 player Bajaj Auto in its sights. In December 2010, the gap between Honda and the Pune-based two-wheeler major was over a lakh, with the Japanese giant selling 1.41 lakh bikes and Bajaj Auto 2.44 lakh.
A year later, that gap has narrowed. In December 2011, Honda had sales of 1.92 lakh and Bajaj 2.64 lakh. "To me, HMSI is Honda, the world's largest two-wheeler maker," says a cryptic Rajiv Bajaj. The managing director of Bajaj Auto is clearly not underestimating the threat; asked at whose expense will HMSI's growth come - Bajaj's or Hero's - Bajaj replied: "Time will tell."
Bajaj, which has been focusing more on margins than market share, will need to get in more products into the mass market to counter the Honda threat, reckon analysts.
Currently, it has the Boxer but that may not be enough for a company whose volume growth comes largely from three-wheelers and exports. "Bajaj Auto has to look into the 100cc segment to get the volumes and the market share," said VG Ramakrishnan, senior director, automotive practice, Frost & Sullivan.
Source : Honda aims to challenge market leader Hero MotoCorp with China made models - The Economic Times
. Going by the comment "Going forward we are conducting a feasibility study for our low-cost bike that is currently made in China and could be manufactured in India," added Oyama., its pretty clear they have one.
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