Honda Developing A Low-Cost Motorcycle

In what can be terned as the “Battle of the Partners”, Honda Motorcycles and Scooters India (HMSI) is planning to develop a low-cost motorcycle for the Indian market and challenge Hero MotoCorp in its own turf. Honda claims that this bike will be the cheapest bike to be developed by the company and is expected to be priced in the bracket of Rs. 30,000 to Rs. 40,000. At this price bracket, this low-cost motorcycle will go in directly head to head with Hero MotoCorp’s current cheapest motorcycle, CD Dawn. Currently, Hero offers the CD Dawn at a price of Rs. 36,600. Compared to this, Honda’s cheapest offering currently in the Indian market is the Dream Yuga which sells at Rs. 44,657 (ex-showroom, Delhi).

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Atsushi Amataka, president, Honda Research & Development India, said: “We are examining the possibility of introducing a low-cost motorcycle for India.” He declined to give any timeline but indicated the company was looking to price the motorcycle in the Rs 30,000-40,000 price band. Honda also stated that this low-cost bike would be developed totally indigenously at the in-house R&D facility in Manesar. The Dream Yuga, launched last year has been doing very well for Honda and with the introduction of this motorcycle; Honda will be in a serious position to challenge the market dominance of Hero MotoCorp and Bajaj Auto.

Currently, Hero MotoCorp has 7 products that are priced in the bracket of Rs. 36,000 to Rs. 51,000. With so many offerings, the company has the dominant stake of 69% in the mass commuter segment for a long time. Hero’s loss of market share to Honda is clearly evident with in the first nine months of this financial year, the company’s market share has slipped three percentage points in the commuter segment on subdued consumer demand at the entry level.

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