Date:06/05/2005 URL: http://www.thehindubusinessline.com/2005/05/06/stories/2005050601600200.htm

Back Honda Motorcycle eyes 70 pc increase in sales

Sudha Menon

Pune , May 5

TWO-wheeler manufacturer Honda Motorcycle and Scooter India is stepping on the gas to fast forward its plans for the Indian market. The company is so bullish on its prospects in the Indian market that it is expecting to increase sales by 70 per cent from 5,15,000 units last year to 9 lakh units by the year-end.

Top company sources told Business Line that a new Director-Marketing, Mr Yuichi Mizutani, has been brought in from Japan to take charge and the company will now bet on motorcycles to drive growth over the next few years. Work has started on development of a new motorcycle, to be launched by March 2006, sources said.

The company launched its 150-cc 4-stroke Unicorn model in September 2004 and "the attempt this time is to bring in volumes by launching a high fuel-efficiency product that will appeal to the price sensitive Indian buyer'', they said.

The company has the Activa and the Dio in the scooters segment with the former accounting for the biggest chunk of last year's sales.

Company officials remained unavailable for comment despite repeated attempts to contact them, but sources said a range of existing, fuel-efficient models in the Honda Motor portfolio are being considered just now though no decision on a specific model has been made.

According to information available to Business Line, the company is so enthused by the growth in the market that it has now pushed up its internal sales target to 75,000 units every month. Earlier the company, which initially invested Rs 500 crore to fund its Indian operations, had announced a fresh Rs 500-crore investment for capacity expansion and new product development, during the launch of the Unicorn.

Meanwhile, a new team is in place at the two-wheeler manufacturer's top management to ensure that its growth plans remains on track.

Mr Yuichi and his team is learnt to have drawn up a blue-print for growth in the business, designed to enable the company to get a larger slice of the market. The new plan envisages expanding its footprint across markets by increasing the number of dealers from the current 252 to over 280 in the current year.

The consumer will be king in Honda Motorcycle's game plan with dealerships now instructed to upgrade and expand their showrooms and service stations to enhance consumer comfort and also make way for the promised one new product every year.