Honda on Full Swing to Take Hero MotoCorp Head-On

The month of November 2011 will never be forgotten in the history of Honda Motorcycle & Scooter India (HMSI). Guess why? It was in this month that Honda was able to show a sales figure of around two lakh units which included both bikes as well as scooters. This is the highest figure shown HMSI, a wholly-owned subsidiary of Honda, Japan ever since the company marked its presence in the Indian soil. By accomplishing this major fete, Honda Motorcycle & Scooter India replaced TVS Motors as the third highest manufacturer, with its former collaborator, Hero MotoCorp, and Bajaj Auto in the top two places.

By the beginning of next financial year, Honda’s second production plant in the state of Rajastan would be in its production stage. The two plants in the state, which includes the presently operating one, will be able to raise the monthly output in terms of production to 2.5 lakh units. The company is also working on its third manufacturing facility in Karnataka will have an annual capacity of another 1.2 million units over years. From Honda’s point of view, the company wants all its three manufacturing bases to be in a position to manufacture four million bikes and scooters every year by the year 2014-15.

Industry sources suggest that there are probability of Honda opening two more plants in the western states of Gujarat and Maharashtra in order to cope up with the recent demand created for Honda products along all the segments across the length and breadth of the country

Business Line had reported recently in one of its news article: ‘According to industry grapevine, this is only the beginning of an aggressive journey for the company, which is determined to recover the top slot it ceded to the Hero group after the duo parted ways recently. Apparently, Honda is keen on setting up two more plants in the Western region (most probably Gujarat and Maharashtra) which will mirror the 1.2-million unit annual capacities of the other three units. If the script runs according to plan, it will have more than six million two-wheelers rolling out of its facilities by 2017.’

HMSI has also declared that price is going to be a major factor to projects success for the company in the Indian market. It simply means that the company will take due care when it comes to the pricing front of its products here. This was very apparent when the Automobile major’s global President & CEO, Mr. Takanobu Ito, said at a presentation on Honda’s strategy for the next decade. “Today, key competitors in those (emerging) markets are Chinese and Indian makers. In order for Honda to remain a market leader, it must not only maintain the high attractiveness and quality of products, but also further improve cost-competitiveness to match the low prices of these competitors,” he said.

Honda marked its presence into the Indian sub – continent with two joint ventures Viz with Hero and Kinetic Motors in the early 80’s when the scene here was entirely different. The competition was intensely less for Honda at that point of time, which is not the case at present.

Honda then broke up with Kinetic Motors a long time back and in order to regain its lost position in the gearless scooter segment, it came back with Honda’s fully owned subsidiary – HMSI. The company has been very successful in dominating this segment to a greater extent. The story of Hero Honda has been History and everybody would obviously be knowing about it. Both the companies were greatly benefitted by this JV which went on for a very long time.

An expert from automobile field had recently quoted “It can pull it off if it launches a better motorcycle than the top-selling Splendor at a lower price. This is the only way to wean the next generation of customers away.”But, one has to agree and abide by the fact the Honda has got all capabilities to dominate and give the erstwhile ally a tough fight in order to obtain the ‘Numero – Uno’ tag for itself. On the contrary, Munjals led Hero group is equally capable at the forefront except that they don’t have a global presence like their ex – Japanese counterpart.

The newspaper also reported ‘Clearly, scooters have been the greater success story, and Honda would be desperately looking for the big break in motorcycles, which will help shed the Activa – led image. It also makes greater business sense, since the market is still heavily loaded in favour of bikes, a fact that Bajaj Auto quickly grasped, which spurred its move to exit the scooter business completely.’

The Hero MotoCorp is also working intensely day – in and day – out to boost the company’s image in all frontiers. It has already expressed its plan of coming up with the fourth plant somewhere in the Southern part of the nation. This will aid the company in pulling its production capacity to a mindboggling figure of ten million units. (One crore units…wow!)

Similarly, Bajaj Auto, the country’s second largest producer of two wheelers will almost be doubling its production to ten million units (as in the case of HMC) over a period of next three to four years’ time which is not too far at all. But, note that Bajaj Auto’s production increase is to concentrate mostly on the Export markets where it visualizes a huge potential apart from concentrating the domestic market too. Hero MotoCorp also has plans to foray into few of African and Latin American markets in the next few years.

While most of the foreign companies are on a temporary halt with the fear of a forthcoming recession in mind, Honda seems to give no damn about it. All that it currently works on is just with one thought in mind – No.1 position in the Indian market.

Will HMSI succeed in its new mission set for it? Throw more light on this post by adding your valuable info. Leave your comments in the box below.

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