[JayPrashanth]

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Last year, after it separated from Hero, Honda began moving its research and development from Gurgaon to Manesar. While at it, the Japanese two wheeler giant also pumped in a couple of hundred crores into the new R&D facility for new product development. It also doubled its headcount for the R&D operation. The R&D operation's prime purpose was to engineer new two wheelers from scratch. All these measures will bear fruit in 2014, when Honda will showcase the first developed-in-India two wheeler. While the exact details of this two wheeler, on whether it is a scooter or a motorcycle, remains unknown, Honda expects to showcase the new two wheeler "within the next one year".



With Honda drawing upon its global models for performance motorcycles, the new two wheeler from the brand could be a low cost product that Honda will position for big volumes. We have another Japanese brand, in this case Yamaha, also planning to take to the low cost motorcycle space in a big way. So, a big volume commuter motorcycle or scooter makes a lot of sense for Honda, especially considering its ambition of displacing Hero MotoCorp, currently the world's largest two wheeler maker by volume. The brand has already launched two big volume products this year, the Dream Neo 110cc motorcycle and the Activa-i automatic scooter.

Honda is charting out a very aggressive expansion strategy in India, a market that it wants to lead by 2020. The two wheeler major will launch a new product every quarter for the next few years, bombarding the Indian two wheeler product with a range of offerings, from commuter motorcycles to superbikes. Honda is also expanding production in India, with its Narsapura facilty, off Bangalore, the latest Honda two wheeler factory in India. Honda has also launched a marketing blitzkrieg across urban and rural India, with Bollywood actor Akshay Kumar, as the face of the brand.

The presence of Akshay Kumar in Honda Ads peppered into various forms of media is to connect with motorcycle buyers from the rural and semi-urban parts of India, an area where Honda's presence is currently low. By making the brand more visible by using a recognizable face such as that of Akshay Kumar's and by establishing more dealerships and service centers in India's hinterland, Honda will be better equipped to take on market leader Hero MotoCorp. For the record, Hero MotoCorp's 5,000 customer touch points across India is the largest network and this is an important factor contributing to Hero's success in the commuter motorcycle space.

Source TheEconomicTimes