In its bid to topple estranged partner Hero MotoCorp and become the largest two-wheeler manufacturer in India, Japanese auto giant Honda Motorcycle and Scooters India (HMSI) on Tuesday launched its cheapest two wheeler in the country yet, the Dream Neo, with a price tag of Rs. 43,150 (ex-showroom Delhi).
This is Honda's third offering in the 100-110cc entry-level motorcycle segment that drives volumes, an area in which it has traditionally been weak due to its alliance with Hero.
The two companies went their separate ways in December 2010. The segment holds key to the pole position in the industry in India, and accounts for nearly 50% of all bikes sold in the country — and has been Hero's forté.
"Dream Neo is our next big leap towards creating deep inroads into the Indian commuter segment," said Keita Muramatsu, president and CEO, HMSI.
"Overall, we are confident of customer demand for Honda two-wheelers and eye 43% growth with 3.93 million unit sales in 2013-14."
Honda registered an over 30% growth in sales in 2012-13, far outstripping the industry growth of 3%, and became the second largest two-wheeler manufacturer in the country.
It has already set its sights on the number 1 position and advanced its target last month from 2020 to as early as 2015. The Neo is expected to play a pivotal role in its strategy.
"Today the market is almost 14 million units in India. So, if it remains at this level, with no growth happening, we may become number one in 2015 or 2016," Shinji Aoyama, operating officer at the parent Honda Motor Company had said last month.
"Honda is gaining marketshare while they (Hero MotoCorp) are losing share. I think this trend will continue."
Developed specifically for Indian customers, the new entry-level Dream series motorcycles are powered by a 110-cc engine that the company claims will give a mileage of 74 kilometres per litre of petrol.
The Neo is Honda's second Dream bike, the first being the Dream Yuga, also with a 110-cc engine, priced between Rs. 45,101 and Rs. 48,619 (ex-showroom, Delhi).
The company expects the Dream series to notch up sales of 800,000 units this year, and the Neo 300,000 units.