‘Hero Motorcycles, Hero Honda to compete in brands, not volumes’
The Economic Times : June 25,2008
New Delhi, June 30 Honda Motorcycles and Scooters India (HSMI) said that it would not compete with its sister company, Hero Honda on volumes but by gaining recognition of its brand and customer satisfaction.
"Hero Honda is expanding and we are also expanding. I don’t think we can catch up with Hero Honda….There is no way. To us being number one does not mean scale in business or volumes, but getting recognised as an admired brand and through our customer satisfaction," Mr Shinji Aoyama, President and CEO of HMSI, told Business Line at the sidelines of the launch of its 125 cc bike CBF Stunner.
Honda sells motorcycles and scooters through two companies — Hero Honda, the joint venture company between Hero group and Honda Motor Co, Japan and through HMSI, its wholly owned subsidiary in India. Both the companies get technology from Honda Motor Co and there is a joint working committee that looks into the product differentiation between the two companies.
With both companies sourcing technology from the same partner, there had been a concern in the industry that HMSI would grab Hero Honda’s share in the motorcycles market.
"India is a vast and diversified market. There is space for both brands to co-exist," Mr Aoyoma said.
Last financial year, HMSI sold 6.18 lakh scooters and 2.53 lakh motorcycles.
The company launched a CBF Stunner, a bike in the 125 cc segment priced from Rs 47,070 up to Rs 51,655 for the top end variant ( ex showroom Delhi.)
Mr N.K. Rattan, HMSI, Head Sales and Marketing, said that the company was aiming to sell 80,000 units of the new bike. It was also planning to introduce two mass market vehicles in the current fiscal, of which one would be a scooter and the other model was yet to be decided. Similarly, in the top end category, it was looking to introduce its CBR 1000.
HMSI plans to sell one million units this year. It is looking to grab a 15 per cent share by 2010 from the present 11 per cent of the overall two wheeler market.
Currently, the company sells Unicorn and Shine motorcycle models in India and four scooter models that include the Eterno, Activa, Dio and the Aviator.
When asked about the company’s intention of setting up a second plant Mr Rattan said, “We have enough capacity to upscale production to 1.35 million units from the present 1.2 million units. So we would take a decision once we start utilising full capacity.”
