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Free of Hero, Honda eyes top slot

autos Updated: Mar 21, 2011 21:54 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Fresh from its decision to separate from the Hero Group in the world’s largest two-wheeler company Hero Honda, Japanese auto giant Honda Motor’s completely-owned Indian subsidiary, Honda Motorcycles and Scooters India, on Monday said it is eying the top spot in the country by 2020.

HMSI was incorporated 10 years ago and is the market leader in scooters in the domestic market. It has a 14% marketshare with sales of around 16.5 lakh units in 2010-11 — a growth of more than 30% over 2009-10.

Next year, it hopes to sell 21 lakh scooters and bikes — a 27% growth over this year. To become number one though, it would have to increase its sales almost five-fold to close to 80 lakh units per annum, and enhance its share in the domestic market to 35%, pipping Hero Honda in the process.

“By the end of this decade, we would like to be the number one brand in India,” said Shinji Aoyama, outgoing president and CEO, HMSI who will return to Japan in a fortnight after a four-year stint in India. “By 2020, I believe the market would be of the size of over 20 million units per annum and to be number 1, we would need around 33-35% share or sales of close to 8 million a year. This would require capacity and product expansions many times over and we would do that step by step.”

At present, Hero Honda, a 27-year-old joint venture between the Hero Group and Honda is the clear market leader, followed by Bajaj Auto and TVS. HMSI, the number four player now, started primarily as a scooter maker and forayed into bikes in India only 5 years ago. Today it sells more bikes than scooters.

Expanding capacities would only be one part of the plan. The other would require a sustained product offensive especially in the voluminous 100cc entry-level where Honda still does not a significant presence.

It is in this area that its disengagement from the Hero Group may be a relief — while the experience from that association, beneficial.

“With Hero Honda, we used to believe we would not enter into core segments to avoid cannibalisation.... but now we are free to do whatever we want,” Aoyama said.

“We have not been entering the mass segment on purpose but now, since we are alone, we would do that soon,” said Aoyama.

Honda engines power Hero Honda's Splendor and Passion bikes, the two largest selling motorcycles in the country, and Honda may use the same engines in its 100cc offerings. Honda does have a 110cc offering in the Twister, but it has positioned this as a niche product, not comparable to the Passion. Aoyama has been replaced by Keita Muramatsu as HMSI's new head. He will take over next month, while Aoyama returns to Japan as the head of business planning for Asia Oceania.