Semi-urban markets to drive scooterisation

The vehicle is being marketed with a focus on customers from semi-urban and rural parts of the state and beyond. The top bosses of the company shed some light on the importance of the state in the two-wheeler major’s scheme of things and the plans going forward. 

HMSI, while aggressively expanding its market leadership in the critical southern region, is banking on the new vehicle to boost scooterisation in upcountry markets. Minoru Kato, who took on his current assignment as CEO of Honda’s two-wheelers segment in India nearly five months ago, tells us, “We added one million additional customers to our volumes last year. In the past four months of this fiscal (April-July 2017), the growth of Honda’s two wheelers has been 19 per cent, which is more than double that of the industry’s growth at 9 per cent. Honda’s market share has also climbed by 3 per cent to its all-time high – 30 per cent in the domestic market. Last year, India overtook Indonesia to become the No 1 two-wheeler market worldwide, in terms of size.  This year, in Q1, India’s contribution to Honda’s global revenues has breached a record high of 32 per cent.” 

Talking about the company’s focus on the southern states, especially Tamil Nadu, Kato says, “To meet the growing demand in the start of these months, we added an annual capacity of six lakh additional units to our star factory in Narsapura, Karnataka. This takes our total production capacity to 6.4 mn units, making India the No 1 production base for the company globally. With respect to the Southern region, the five states contribute 28 per cent to the all-India two-wheeler market. They play a key role in driving the company’s growth. We are the No 1 two-wheeler brand in the South with 35 per cent market share. Tamil Nadu is the biggest market for two-wheelers in the South, volume wise. It is also India’s second largest market for scooters and contributes 12 per cent to Honda’s all-India two-wheeler business.” 

Honda has set a challenging target of 6 mn unit sales in FY’17-18. The company is growing at a rate of 23 pc which is almost six times the growth rate of the south Indian two-wheeler industry (growing at 4 pc). 

Yadvinder Singh Guleria, Senior Vice President - Sales and Marketing, HMSI, said, “With better road infrastructure, co-usage in a family and more women entering the workforce, the primary requirement of riders in Tamil Nadu has evolved from the mileage and price conscious 110cc motorcycles to the more convenient and unisex automatic scooters. Nearly every second customer chooses to ride home on a scooter, with mopeds witnessing a sharp decline. Cliq is a disruptor in the 100-110cc segment.”