HMSI Eyes Second Spot in Domestic Two Wheeler Sales

Honda Motors & Scooter (India) Ltd., country’s largest scooter manufacturing company is now aiming to become second largest two wheeler player in the country as far as domestic sales concern. In February the domestic sales of Bajaj Auto stood at 2.04 lakhs units which are just 7,000 units more than compared to HMSI’s domestic sales. Bajaj Auto sold total 3.02 lakhs motorcycles out of which 2.04 lakhs units were sold in domestic market and balance motorcycles were exported. HMSI has already snatched third spot from TVS Motors Company from past few months. However, on the financial year till date sales figure it is still behind of TVS Motors Company.

HMSI is planning to introduce Honda Dream Yuga in the month of May end and with the launch of Dream Yuga it expects that it will have second spot very early. N K Rattan who recently quit from his position of VP for sales, marketing, planning & corporate affairs said “Without a mass motorcycle, we are No. 3; with the launch of the Yuga 110cc in May-end this year, we will be very close to No. 2.” It was reported that the Yuga, which will have a couple of variants, is expected to be priced competitively at Rs 40,000-42,000. Hero MotoCorp dominates the mass segment, which accounts for a fifth of the total two-wheeler market, with the CD Dawn priced at Rs 36,000 (ex-showroom Delhi).

It is to be noted that HMSI’s major sales comes from scooter segment where it is currently selling more than 1.2 lakhs units a month. It’s motorcycle sales is in the range of 70,000-80,000 units which is still far behind compared to Bajaj Auto’s 2 lakh plus units and Hero Motocorp’s  4.5 lakh plus units in domestic market. Further, Bajaj Auto has kept its inventory level low while HMSI and Hero Motocorp has large amount of inventory pending for retail sales. As far as March month concern we may see HMSI nearing sales of Bajaj Auto. However, from the month of April there will be competition between HMSI and Bajaj Auto for the number 2 spot as far as domestic sales is concern.

Bajaj Auto has schedule two new motorcycle launches, next generation Pulsar and all new motorcycle in the month of April and May respectively which will boost its domestic sales. Further, Bajaj Auto may also launch 100cc Boxer in upcoming months which can further boost its sales. It has installed capacity of 4.5 million units for two wheelers if we back out export of million unit motorcycles, it can still produce 3.5 million motorcycles for domestic market whereas, HMSI has only 2.8 million units’ annual capacity including export. Further, it will take time to build the proposed third unit in the state of Karnataka. Hence, there are little chances that HMSI will take number 2 spot for domestic two wheeler sales in the financial year 12-13. From the financial year 12-13 it will be interesting to see who will grab the second spot.

– Mahavir Kothari