Japanese auto major Honda’s 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 India’s 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 major’s 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 Honda’s 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 we’ve 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.
With both partners slugging it out for supremacy in the Indian market, the industry expects some tactical and strategic fireworks in the near future. “It will be like a Coke-Pepsi battle,” said a rival two-wheeler CEO. “It will be great for the customer.”
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Source – TOI