01 Mar 2007
Hero Honda, the clear leader in the 100cc motorcycles segment, has refreshed its entry-level CD range of motorcycles. The new CD Dawn and CD Deluxe come with about 6 percent improvement in power and fuel efficiency. This is the first engine upgrade for the CD series in 21 years. The two bikes currently have combined sales of between 60,000 to 70,000 units a month. With the facelift, Pawan Munjal, managing director, expects a reversal of the erosion of his company’s market share. “We expect a 20 to 25 percent growth in sales in CD series,” he said at the launch in Mumbai.
The upgrade of the CD series comes at a time when close rival, Bajaj Auto has narrowed the gap in terms of overall bike sales and has announced its intention to exit the segment and go up the value chain. Munjal, though, is clearly betting on the entry-level segment to sustain its leadership position. Over the last year there has been a shift in the dynamics in this segment. The 100-cc bikes which used to contribute 42 percent of overall motorcycle sales are now down to 39 percent. Deluxe bikes – which include the Splendor and its variants from Hero Honda, Discovery from Bajaj and Victor from TVS Motor – account for 51 percent overall bike sales. Hero Honda holds 45 percent share in this segment, down from last year’s 48 percent.
“The deluxe and premium segments may be driving growth but we cannot ignore entry-level customers who need contemporary styling and technology,” he said. Brijmohan Lall, chairman, Hero Honda Motors, added that his company would do everything to retain and improve leadership position. “We believe in setting standards and going beyond the customer’s needs and desires be it in technology, looks and rider comfort,” he said.
The new bikes are a result of extensive market research on the rural market. In line with this, the new bikes come with more powerful headlamps and more ground clearance. Hero Honda has upgraded a large part of its portfolio over the last six months. The company kicked off the drive with the Glamour PGM Fi and revamped CBZ X-treme, and followed it up with newer versions of the 100-cc Passion Plus and the 125-cc Glamour. Two more launches, scheduled for December, will complete this programme.
The last three months have been very significant for the company in terms of sales which have touched the million mark. This is in line with an internal ‘M3M’ (Million in Three Months) programme which had set a sales target of a million motorcycles in the festive months between September and November.
Sources indicate that price discounts had a big part to play in this achievement; a point quickly denied by the company. Anil Dua, vice-president, sales and marketing, said that more than discounts the company had embarked on a customer rewards programme during the festive season. What remains to be seen if the big numbers can be sustained without such programmes.