The gloves are well and truly off. A little over two years after its divorce with the Hero Group, Japanese auto major Honda on Monday said it hoped to overtake Hero MotoCorp and emerge as the largest two-wheeler manufacturer in the country by 2015, at least 5 years ahead of its earlier target.
Honda has seen its sales grow by 33% in the current fiscal year, outpacing the industry average of 4%, increasing its marketshare in the process. (see table)
Hero MotoCorp, India's largest two-wheeler manufacturer, on the other hand, saw its sales decline by 1.2%. Honda Motorcycles and Scooters India also overtook Bajaj Auto to emerge as the second-largest in the business this year and is now vying with Hero for the number 1 slot.
"Today the market is almost 14,000,000 units in India. So, if it remains at this level, with no growth happening, we may become number one in 2015 or 2016," said Shinji Aoyama, operating officer, Honda Motor. "Honda is gaining marketshare while they (Hero MotoCorp) are losing share. I think this trend will continue."
The company also plans to accelerate its expansion plans in India to achieve the target. It is currently expanding its capacity from 2.8 million units to 4 million by March 2014 with its third factory in Karnataka.
"We do not have (plans) for a fourth factory yet but once the third plant is fully operational we should go ahead immediately," said Aoyama. "We will also launch many products. At least 3-4 new products every year. We also need at least 2-3 more products in the entry-level motorcycle category."
The company also said its separation from Hero in 2010 did not impact its operations at all as it was confident of Indian consumers' trust in its technology.
It also considered Bajaj a bigger rival.
"We have no support from Hero now and it is not necessary. We knew the consumers had faith in our technology," said Aoyama.
"Yes, in terms of numbers, still Hero is number one but very frankly speaking, the consolidated power, including research and development (R&D), sales network there, including many of these elements, I think Bajaj is very strong. Bajaj is very good at creating alliance," he added.