Does Splendor Suffering from Drop of Honda name? [Sales Numbers]

Splendor, the revolutionary motorcycle brand, which changed the dynamics of Indian two wheeler industry.  Splendor, the motorcycle brand which generalized motorcycle trend in India.  What’s more, it is the only motorcycle brand in India which has more than 11 million customers. For such revolutionary motorcycle brand, does it matter if it comes with Hero Honda name or Hero name?  Well, the past few month sales figures of Hero Motocorp tells the story of the value of Honda name on a motorcycle?

Original Hero Honda Splendor Pro

Re-branded Hero Splendor Pro

Hero Motocorp completed the exercise of removing Honda brand name from its flagship motorcycle Splendor in the month of June. After removing the name of Honda, Splendor sale has nosedived from the level of 2.4 lakhs to 1.2 lakhs.  This has also reflected in the monthly sales figure of the company. The company has seen sharpest sales fall in the month of September.  It sold 4,04,787 units in the September 2012 down by 26.35% compared to 5,49,625 units in the September 2011.  This is even worst performance compared to August 2012 where company reported 4,43,801 units down by 11.88% compared t 5,03,654 units in the August 2011.

Some unnamed dealers of Hero Motocorp have reported that inquiry for Splendor has slowed down by 10% due to removal of Honda name. For some people Splendor is still motorcycle of Honda and to them removal of Honda name suggest loss of quality assurance. Honda Dream Yuga has benefited a lot due to Hero’s removal of Honda name from Splendor.

Definitely removal of Honda name has affected Splendor sales. However, there are other major reasons for drop in the sales too.

-Splendor is a rural motorcycle brand and the demand scenario has worsened starting from financial year 2012-13. Moreover, weak monsoon made the situation worst.

– Hero Motocorp piled up inventory more than the double of its regular inventory level during the period of April to June 2012.  It was in anticipation of improving demand scenario with the start of monsoon. However, the retail demand remained very weak during the period of July to September 2012 which left Hero Motocorp to rationalize its production.

– Hero Motocorp’s more than 40% motorcycle sales come from Splendor brand alone. Hence, it is obvious that Splendor has the sharpest production cut.

Does this mean that Hero name does not have brand power, or the company cannot stand its own? Well, this is also not entirely true.

-Hero Motocorp has the deepest penetration in Indian two wheeler market which cannot be replaced overnight.

-Hero still excels in after sales service and customer satisfaction compared to its peer.

-It still uses Honda’s engine hence there are minimal possibility of engine related issue.

– There are challenges of Honda brand name and R&D which Hero is already dealing with.

It is interesting to see how Hero will retain its leadership over its erstwhile partner and current competitor Honda.

-Mahavir Kothari