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India all set to be biggest mobike market for Honda

The Times of India:  May, 2015

Chennai: Honda Motorcycle & Scooter India may become the largest two-wheeler operation for Japanese giant Honda Motor Company globally by 2017-18.

The current capacity additions and the resultant increase in marketshare will make HMSI the top volume contributor for Honda in the two-wheeler market globally, Honda officials said. Although revenue wise, India will still lag in higher value markets where the pricier higher displacement bikes rule, in volume terms India's contribution to Honda's incremental growth is already a staggering 98%.

Keita Muramatsu, President & CEO, HMSI: "In the next two years, Honda India's operation will be the largest for Honda Motor globally in the two-wheeler business in terms of volumes. We are currently at 27% marketshare in India and the market is still growing so there is scope for further growth and more room to increase our marketshare."

In the last financial year, Honda Motor Company added 7.4 lakh vehicles globally of which HMSI's share was 7.3 lakh. Currently Indonesia is the top volume market for Honda in terms of two wheelers but a stagnant market and high marketshare means growth opportunities are slimmer there.

"Honda's marketshare in Indonesia is already 60%," said Muramatsu. "Also that market is already quite saturated so there is less room to grow." However, because of India's preference for commuter bikes which are lower priced, HMSI's revenue contribution to the parent kitty is not top of the league yet. HMSI has rolled out an aggressive production and marketing plan that will see it hit 6.4 million units capacity by end 2016. "Our target right now is to hit 100% capacity utilization. We have invested in our fourth plant in Gujarat and on a yearly basis, by next year, the capacity should reach 5.8 million units," said Muramatsu.

That additional capacity will also allow HMSI to step on the gas in terms of exports. "Our fourth factory in Gujarat will be inaugurated in January and that additional capacity will give us the option of pushing more exports. Some of the new models that we will launch will also help in that effort," said Muramatsu. "Till then our exports will remain on the same level as last year."

HMSI has announced that FY15 will be a game changer year for it in terms of product, capacity and marketing aggression. Said Yadvinder S Guleria, Senior Vice President - Sales and Marketing, HMSI: "In FY'14-15, we have grown more than double of industry and sold 44.5 lakh two-wheelers last year, contributing 60% to the 11.8 lakh volume increase by the industry. We have carried the same momentum into FY'15-16 by becoming the highest market share and volume gainer in April. The product roadmap for 2015 is robust with nine new products remaining to be launched in this year. For our flagship model CBR 650F, Honda is innovating by bringing a new premium distribution format in 20 top priority cities."