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Thread: Honda aims to challenge market leader Hero MotoCorp with China made models

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    Rusted Rony's Avatar
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    Arrow 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
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    Default Honda declares war on Hero

    New Delhi: The alliance is off and so are the gloves. Japanese auto major Hondas brand new India strategy is to focus all attention on dethroning its former partner Hero as the undisputed leader of the Indian motorcycle market. Unhindered by the terms of the earlier alliance, Honda now wants to sell 10 million bikes in India by 2020 and butt heads with its former allies in Indias lucrative 100cc commuter motorcycle segment, currently dominated by the well-entrenched Hero Honda, now rechristened Hero Moto Corp after the partners finalized the split last year.
    Our dream is to become the number one motorcycle company in India, said Keita Muramatsu, president & CEO, Honda Motorcycle & Scooter India (HMSI), the Japanese majors 100% two-wheeler subsidiary in India. Right now India contributes around 13% of our global sales and we want to increase this to 30%. To that end, Honda is introducing models that will take on Splendor and Passion, the two bikes that have long ruled the Indian roads. We are showcasing the 110cc mass motorcycle Dream Yuga as part of a cache of seven products, local and global, which we are unveiling at the Auto Expo, Muramatsu said. We will have more models in this commuter segment every year because it is the biggest in the Indian market. This year is very crucial for us as it is the first when HMSI will be the only two-wheeler company to boast the Honda brand in India, he added.
    As if to rub in its resolve, Honda also announced it would make India an export hub for motorcycles, something it never allowed its former partners to do when the joint venture was alive.
    Honda is a global company but our core has been changing from Japan to US and north America to Europe. Now India is the centre of our global two-wheeler business for the next ten years or more, said Muramatsu. To that end, the company has announced its global brand slogan in India and is investing Rs 1800 crore to set up a new factory and increase its production capacity in this market to 4 million units in two years and 10 million units by 2020.
    As it makes and sells more and more bikes in India, Honda will also look at expanding its parts supplier base currently dominated by companies owned by members of the Munjal family. As we expand production capacity we need additional vendors too, said Muramatsu. The Japanese company though is quick to admit that Hero Hondas market domination would not have happened without the support of both partners. They helped us to develop a good bike market in India and this we appreciate but companies change and their focus changes too, he added.
    For its part, Hero Moto too is flexing its muscles making its solo resolve amply clear. At a press meet Wednesday, Hero Moto boss Pawan Munjal said: The separation allowed us to start our own technology development and also take the Hero brand global. It was a bold decision on our part to go solo and weve been proven very right with our sales going up. We had an amicable parting so we still take technology support from Honda for some of our new products, he said.
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    News approved and similar topics merged.
    Last edited by sunilg; 01-07-2012 at 03:15 PM.
    (Been There Done That) x 3.25

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    honda will sell chinese made bike ?? do they have factory in china .... or are going to outsource complete production.

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    Quote Originally Posted by princesirohi View Post
    honda will sell chinese made bike ?? do they have factory in china .... or are going to outsource complete production.
    It'll be surprising if they don't have . 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.

    Btw they even have Honda R&D in china.
    Last edited by kaynmantis; 01-07-2012 at 06:45 PM.

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    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.
    Which 100cc "Boxer" are they talking about here?
    Well, they have Discover 100 which I believe is the pinnacle of the modern 100cc commuters. Plus they have Discover 125, Discover 150 and Boxer 150 too which are for commuters only!
    So, what more do these analysts want from Bajaj? A XCD or Pulsar 100?

    I feel the problem is that Bajaj's quality improvement has happened, but its not visible to the common people, especially ex-customers. Bajaj should get some more events sponsored, involving their commuters, just like the Pulsars were involved in Stuntmania, etc. But I've no idea what it could be? A rally or something maybe?

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