Honda Considers India as Mass Market Hub

HMSI (Honda Motorcycles and Scooters India Ltd), a fully owned subsidiary of Honda, Japan has been doing a great business in India and this is a fact which everyone of us are sure to know. In the scooter market, the company is holding a indomitable position with one mass market scooter – Activa setting benchmark in terms of sales.

According to a recent news in The Business Line, ‘Japanese auto major Honda Motor Co will  commence exporting bikes by next year from India, a country which it sees as a future global  hub, particularly for mass market models.’

India has always been THE market for most of the company’s mass market products and Honda  has been no exception for this unwritten rule. With the growing economy of India and increase in disposable income level, India is indeed a market with great future potential for a company like  Honda with a good brand reputation among its customers and the citizens on a larger scale.

Apart from merely exporting a few models from its plants in India, Honda is also considering the  idea of building a global procurement centre for large sized motorcycles and commuter bikes as well in India as it looks up on its potential to enhance exports from the country and its components too.

Talking on this note, Honda Motor Company COO (Motorcycle Operations), Mr Tatsuhiro Oyama told the reporters from Tokyo during the Tokyo Motor Show, “We will soon start exporting from India… Earlier some of the motorcycle models were being produced by Hero. Now we would like to do it ourselves by next year from the new plant.”

To bring to your notice, the short flashback related to the slit of Hero Group from Honda Last year, Honda and the Hero Group decided to end their 26-year-old joint venture Hero Honda and the Indian partner (which is the Munjal led Hero Group) bought out the Japanese firm’s entire 26 per cent stake for a sum of INR 3,841.83 crore. But the technology sharing agreement between these two majors is still valid till 2014, though not much of it is made use by Hero Group.

Mr Tatsuhiro Oyama then added, “Therefore, we have lots of expectations towards its capability to export to the global market…Specially talking about motorcycles, we do believe India will become a global hub, particularly for the commuter type of models.”

HMSI currently has three products in mass market bike segment in the sub – continent Viz, CB Twister in the entry level 100 cc category and Shine and Stunner in the 125 cc category. These are the best sellers for the company as well.

HMSI has two plants in India presently with a total manufacturing capacity of around 22 lakh units per year. The company is currently involved in the process of setting up its third plant on the outskirts of Bengaluru. With the completion of this plant, the manufacturing capacity would go up to 40 lakh units per year by the first half of the year 2013.

Connecting the news to its new plant, Mr Oyama said, “From the new plant we will be making motorcycles that can be sold within India and some can also be exported. We will start exporting to neighbouring countries like Nepal, Bangladesh.”

Following the company’s plans to export to Nepal and Bangladesh, Honda is also considering the plans to export to South America, South Africa and other ASEAN countries as well. This will help the company in reining the markets out there.

Commenting on sourcing from India, Mr Oyama said: “We are also in the process of trying to build India as a global procurement centre for large-sized motorcycles as well as commuter bikes. We are already procuring lights and lamps and some other components from India – So we see India as a procurement centre in the near future and hopefully export more components to other markets.”

The company is also trying to set a full fledged R&D centre to develop more new products. “We are also developing a new R&D centre, which will have the capacity to develop products for the global market,” he said as an end note.

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