HMSI guns for 8 lakh commuter bike sales in 2013-14

With aggressive growth plans in place, the hard-charging Honda Motorcycle & Scooter India (HMSI) is eyeing sales of 800,000 units of its mass commuter bikes in 2013-14. Pointing out to the 109cc Dream Yuga and Dream Neo commuter bikes – which are the younger products in the company’s portfolio – Yadvinder Singh Guleria, vice-president and operating head, sales and marketing, says, “We plan to sell 800,000 units of our mass commuter motorcycles in 2013-14.” The company forecasts that nearly 60 percent of the targeted sales would come from the recently launched Dream Neo model while the balance would be made up by the Dream Yuga. The base Dream Neo costs Rs 46,140 and the base Dream Yuga Rs 49,089 (both prices, ex-showroom, Mumbai).

While the flagship 109cc Activa scooter, which sells nearly 1.2 million units per annum, remains the largest seller for the company, the two Dream series motorcycles will stand second in terms of garnering volumes during this fiscal year. “Of our total volumes during 2012-13, scooters stood at 54 percent while the motorcycles made up for 46 percent. For 2013-14, both the categories will contribute equally,” adds Guleria.

Though he did not disclose the annual sales numbers, Honda’s CB Shine (which is India’s largest selling 125cc executive commuter bike) stands third in HMSI's high-selling product category. According to Guleria, the company sold over 300,000 units of the Dream Yuga during 2012-13 and is currently selling an average of 22,000 to 25,000 units per month. Speaking on the sidelines of the Dream Neo launch in Mumbai on July 9, Guleria told Autocar Professional that HMSI is targeting a near-100 percent capacity utilisation (of the current 40 lakh units per annum) as a defined immediate priority. “We are planning to sell around 39.3 lakh units during this financial year and penetrate the mass segment further. Covering the entire geography is a challenge for us. For example, it is a challenge to cover the entire landmass of Uttar Pradesh through our network and we cannot replicate our Kerala-model there. South India stands as the largest contributor to our sales volumes currently. We will also ramp up our production capacity up to 46 lakh units per annum,” concludes Guleria.

INTERVIEW WITH YADVINDER SINGH GULERIA, VP & OPERATING HEAD, SALES & MARKETING, HMSI

What is HMSI’s strategy to keep sales going and also retain buyer interest? June 2013 sales indicate that growth in the scooter segment is slowing down.
We have planned to roll out new products and variants of existing models in every quarter. In June, we introduced the Activa-i which, I think, will define a lot of new customers for us who plan to buy a reliable scooter for personal use. Earlier this year, we had launched the premium CB Trigger motorcycle in the 150cc segment. Going forward, we will launch new products as we look at further expansion of our market share in the scooter and the motorcycle segments.

If HMSI is working on new products, are you looking at adding new vendors?
While we are happy with our existing network of suppliers, we are glad that 17 of our vendors moved to south India with us, bringing investments worth Rs 1,700 crore. Our priority is to achieve 100 percent capacity utilisation first before exploring further expansion options. In future, when we will add more products to our production lines, we will look up for new vendors.

What kind of sales push are you expecting from the Dream Neo commuter bike?
We are expecting to sell 800,000 units of our mass commuter bikes of which our Neo model would dominate the numbers. We got a flying start to the Dream Yuga when it was launched last year. All I can disclose as of now is that the response to the Dream Neo is more than that.

Which models does the new Bangalore plant roll out?
We are currently rolling out the Dream Yuga and the Activa scooter from our Bangalore facility and will soon start rolling out the Dream Neo. Also, we are planning to roll out the upcoming (125cc) Activa model from that facility in August 2013.

With the competition heating up in the 250cc and above segment, do you plan to revise the prices of the CBR 250R models? What is the localisation rate in the premium quarter-litre motorcycle?
From an overall perspective, the CBR 250R has a localisation rate of 95-96 percent. However, to look at it from another point of view, we have some vendors who are importing and supplying components to us. Hence, that way, I can say that the localisation rate would be nearly 88 percent. As regards revising CBR 250R prices, I cannot comment on anything yet.

AMIT PANDAY