[anjan_c2007]

During the recent launch of the Honda Hornet 2.0 and Highness CB 350 to target these niches of the market, Mr Y.S. Guleria, Director (Sales and Marketing) of HMSI said that they were now more interested to launch entry level bikes to gain a larger pie of this market. The pandemic has made buyers go for personal mobility with budget bikes becoming the most attractive proposition for them according to Mr Guleria. And HMSCI has just a 5.5 % share of this market (75-110 cc) whereas Hero Moto Corp Ltd, mainly using its Honda technology with only minimal changes over the years has a 74.4 % share. The entry level bikes (scooters excluded) constitute 37.7 % of the total two wheeler market according to this news report. That's a very huge figure.

HMSI Director (sales and marketing) Yadvinder Singh Guleria said work is on to introduce more models at the entry level of the two-wheeler segment but declined to specify a timeline for the same. “We are very much in knowledge of the gap (in our portfolio at the entry-level). We have launched Hornet 2.0 and Highness CB350 at the other end of the spectrum. Work is in progress. I cannot share a timeline when we will come with the product in this segment. But product will be there”, informed Guleria.

Honda had a market share of 5.5% in the entry motorcycle segment (engine capacity more than 75 cc but less than equal to 110 cc) with sales of 83,933 units between April-August FY20. Erstwhile partner commanded a lion’s share of 74.4% in the category with sales of 1,133,898 units in the period under review. The entry motorcycle segment accounts for 37% of total two-wheelers sales in India.

The newsitem link:-

https://auto.economictimes.indiatime...lumes/78584995

Honda had initiated Hero Honda Motorcycles (founded by Late Mr B.M. Munjal in 1984) with its 100 cc four stroke bike CD 100 and this bike captured the Indian market due to it's reliability and frugal fuel consumption that were it's USP's. The catch phrase 'Fill it – Shut it – Forget it' clicked with almost every household. The average bike buyer would shun performance figures of other competitors and opt for the Hero Honda CD 100. Honda of Japan was very much a party and the commuter bike variants/ upgrades viz. CD 100 SS, Splendour, Splendour Plus Passion, Passion Pro and so on. Honda also felt and successfully sensed the buyer's pulse till they collaborated in the joint venture (JV) upto 2010 for 26 years. And HMSCI on its own entered India in 1999. They have been here for nearly 21 years on their own. We are also aware of their joint venture with Kinetic Engineering, that was mainly to manufacture a scooter. But since this is a scooter JV we can just record it for our knowledge.

The moot question is why this late realisation about the importance of commuter bikes to shore up volumes after 26 years of stay in the Hero Group JV and 21 years of stay on its own ? After all these years they realise that the commuter bike segment has a 37 % share in the two wheeler market.

It's always "better late than never" as the old saying goes. But this very late realisation by HMSCI and its total dedication to the scooter market all these years becomes noticeable. No doubt, they have excelled in the scooter segment. But their near total aloofness from commuter bike segment is something that will surprise every market watcher.

[anjan_c2007]

A fact I have not mentioned earlier is that when JV's are made the principal (Honda) and the collaborating partner (Hero Honda) sign certain clauses in the JV agreement. These include recusal from marketing of the products by the collaborating partner in outside countries and markets, where the principal sells competing products. And on the part of the principal, it is required not to sell or market any competing product in the country (India) where a JV agreement with its collaborating partner is already in vogue.

Hence HMSCI could not sell or market any commuter bike in the 100/110 cc segment where Hero Honda was already selling the JV products. But the collaboration and JV ended in 2010 and HMSCI could have thought of this 37% commuter bike segment way back then.