Less than a year after its parent company broke ties with the Hero Group, Honda Motorcycle and Scooter India (HMSI) has set off on a rather smooth ride. The Indian subsidiary of the Japanese auto giant has overtaken TVS Motors to become the number three player in the domestic two-wheeler segment for the first time ever.
According to November sales figures, while HMSI clocked domestic sales of close to 190,000 units, TVS Motors sold a little more than 150,000 units in the same month.
Hero MotoCorp (formerly Hero Honda Motors) remains the leader in two-wheeler sales with 45 per cent market share, followed by Pune-based Bajaj Auto, makers of the Pulsar brand of premium motorcycles.
With a flurry of new product launches, including economy bikes and scooters — both big and small capacity — and more fuel-efficient engines, Honda is looking to gain market share quicker than earlier expected. NEW PECKING ORDER Old ranking Sales in
2010-11 New ranking Sales in
Nov ‘11 Hero MotoCorp 5,269,381 Hero MotoCorp 536,772 Bajaj Auto 2,414,630 Bajaj Auto 331,967* TVS Motors 1,777,676 Honda Motorcycle 189,454 Honda Motorcycle 1,551,402 TVS Motors 150,406
The company, which makes the popular Activa automatic scooter and the Unicorn motorcycle, is confident of achieving sales of more than 2.1 million units this financial year. HMSI’s domestic sales grew to 189,454 units last month, an increase of 35 per cent compared to 140,059 units sold in the same month last year.
TVS Motors, meanwhile, has said its two-wheeler sales in the domestic market are expected to close at 2.04 million units in the current financial year, subject to macroeconomic factors. The Chennai-based company grew only eight per cent at 150,406 units in November, against 139,541 units sold during the same month previous year.
Naresh Rattan, vice-president, sale and marketing, HMSI, said, “Our aim is to provide the Indian buyers the best of products we have. What position we will gain in the market will only come later. The new capacity at Bangalore, where work has begun, will provide the added capacity boost.”
Honda, which wasn't able to add incremental capacity for more than a year as its existing capacity was running to full proportions, opened a new facility in Rajasthan, thus allowing it to add 1.2 million units in capacity.
In addition, the company is also spending Rs 1,350 crore on a new plant, which will come up near Bangalore and will bring 1.2 million units per annum in capacity. According to Honda officials, the Bangalore plant, which will open in the first half of 2013, will allow the company cover more areas affectively in various states. The southern markets contribute to about 30 per cent of the overall two-wheeler demand in the country.
Honda is also gearing up to enter the economy segment (100cc category) where market leader Hero MotoCorp has a stranglehold. It is readying to launch a 100cc bike, which will be showcased at the Auto Expo and will carry a price tag in the bracket of Rs 40,000-45,000.
Hero MotoCorp's top selling bike Splendor, which sells more than a million units every year, comes with a price tag of Rs 43,400 (ex-showroom, Mumbai). Industry sources say Honda aims to launch 3-4 new models of scooters and motorcycles next year. TVS Motors too is scripting a fight back. The Venu Srinivasan-led company has upped its production capacity by 33 per cent to 2.8 million units from 2.1 million units per annum, after spending Rs 200 crore. According to reports, TVS Motors is working on a new automatic scooter which is due for launch next year. The company, which currently has four scooters spread over two brands in its portfolio, trails HMSI in market share of automatic scooter at 21 per cent, compared to 45 per cent of the Japanese firm.
In addition a new motorcycle is also in the works and is due to hit markets in 2013. Meanwhile, new product developmental work on mopeds is also going on, according to a senior company official. TVS Motors is the only company in India which makes mopeds.
H S Goindi, President (Marketing), TVS Motor Company, said, "The installed capacity is sufficient to cater to the demand at the moment. As and when the market picks up and there is a requirement for additional capacity, we will look at it accordingly. We hope to launch new products in due course and will revert with details closer to the launch date".