Honda to Introduce Low Price Commuter Bike to Rival Hero HF Dawn

We recently informed you that Japanese automaker Honda's Indian two-wheeler arm Honda Motorcycle & Scooter India (HMSI) has come up as the most emerging brand in the county's two-wheeler market and it is eating up Hero MotoCorp's market share. The bike maker is eyeing a target of selling 20-million vehicles by 2020. We recently published that Honda will launch four new products in the country every year to achieve this ambitious goal. In order to this Honda is looking at introducing a low-cost motorcycle for the Indian market, which will compete with Hero MotoCorp's HF Dawn and Bajaj Platina.

The proposed bike will fierce the competition between the two as the bike is to be priced between Rs 30,000 and Rs 40,000 cheapest in Honda's line-up and will be pitched in segment where Hero MotoCorp rules with its HF Dawn, which is the cheapest Hero bike available at Rs 36,600 in the Indian market and enjoys more than 70% of market share. While, Honda’s cheapest offering is the 110-cc Honda Dream Yuga priced at Rs 44,657 (ex-showroom, Delhi). Atsushi Amataka, president, Honda Research & Development India, said: “We are examining the possibility of introducing a low-cost motorcycle for India.” He declined to give any timeline but indicated the company was looking to price the motorcycle in the Rs 30,000-40,000 price band. The new model would be developed at Honda’s  new developed technical centre at Manesar. These steps indicates that India is a big destination of Honda's global operations and they are warming up to dethrone the giant Hero MotoCorp. The company has seven mass segment products priced between Rs 36,600 and Rs 51,800, which helps Hero to acquire nearly 69 per cent in the volume-intensive mass commuter category (75-110 cc). This segment also holds near 66% of the total market, which means they sell two commuter bikes out of every three bikes sold in India.

On the other hand, for Hero maintaining sales volume in the segment is important as they get near 77 percent of its sales from the 75-110-cc commuter segment. In an alarming situation company has already started to lose market shares, in the first nine months of this financial year, the company’s market share has slipped three points in the commuter segment on subdued consumer demand at the entry level. HMSI’s sales in the same period has more than doubled to 230,031 units in the category after the introduction of the Dream Yuga, its first serious mass offering. Honda has managed to sell 200,000 units of Dream Yuga since its launch in May 2012, which is a huge success. However, HMSI’s share in the segment still remains marginal at 4.69 per cent. HMSI President & CEO Keita Muramatsu confirmed the company was considering introducing a low-cost bike in India.

Overall, the company is sharply focusing on developing and introducing products faster at aggressive price points in the Indian market and has set up an integrated technical centre. As many as 200 engineers belonging to HMSI and Honda R&D India at the technical centre have been mandated to work closely with vendors to introduce products at competitive price points for the Indian market.

Source: Business Standard