Honda 2Wheelers hits peak capacity at its Bangalore plant

Honda Motorcycle & Scooter India (HMSI) seems to have a ‘problem’ of plenty. A little over a month after it inaugurated the fourth assembly line at its two-wheeler plant at Narsapura, near Bangalore and expanded its Karnataka plant capacity to 2.4 million units, the company says it has hit peak capacity.  

HMSI's top management confirmed this development to Autocar Professional today, on the sidelines of the 57th SIAM Convention in New Delhi today. This also means Honda's 11 assembly lines across four plants in the country are operating at 100% capacity utilisation.

HMSI is targeting sales of six million units in FY2018. "My top priority in India is to maximise Honda customers," said Minoru Kato, president and CEO, HMSI. The company says it is focussing on both scooters as well as motorcycles to leverage growth in the domestic market.

According to YS Guleria, senior VP (Sales & Marketing), 20-30% of total sales come from the demand in rural pockets for HMSI. Kato told Autocar Professional that HMSI is looking to increase its market share in the rural pockets and will thereby focus on the executive commuter segment (125cc). 

Commenting on growth this fiscal, Guleria said, "Compared to last year's festive season so far, we recorded 90% more sales on Ganesh Chaturthi this year. We entered September with an inventory of 42 days, which is less than the two-wheeler industry's average inventory."

HMSI, which had a network of 5,200 outlets as on March 2017, is looking to add another 500 to its existing network pan India this year. "Of this, my team has already achieved network expansion by 250 outlets thus far in this year. We are bullish about the demand in this festive season and we are working to ensure adequate supplies," said a confident Guleria.

As regards the manufacturing capacity crunch, Guleria said that the company is studying the prospects of further expanding production capacity at its Gujarat plant, which reportedly running at peak capacity. "We are looking into this. We can also make bikes at our Gujarat plant if required," added Kato. 

August month for Honda sales
Recording its best-ever sales for any month, Honda Motorcycle & Scooter India (HMSI), has reportedly sold 622,180 units (including exports) in August 2017. Interestingly, this is the first time that the company has breached the 600,000-unit sales mark. On the domestic front, HMSI sold 586,173 units (growing by 25.71 percent YoY), which is also its best-ever performance in India. 

The company claims that its scooter and motorcycle sales have recorded all-time high numbers in August, which marked the commencement of the festive season. 

HMSI sold 191,944 motorcycles in August thereby recording a YoY growth of 48 percent. It had sold 129,926 motorcycles in August last year. On the scooter front, the company sold 394,229 units, up by 17 percent YoY. It had sold 336,363 scooters in August last year. 

Commenting on HMSI’s August 2017 sales, Guleria said, “On the back of strong festival demand matched with new additional capacity coming at a very strategic time, Honda has breached the 600,000 units sales mark for the first time in August 2017. At the same time, our strong overseas demand momentum has resulted in exports crossing the 36,000-unit mark. On the domestic front, both scooters and motorcycles touched their highest sales mark. We are seeing increased footfalls at dealerships and are fully equipped to cater to the high demand during the festive period.” 

Also read: India becomes Honda's largest two-wheeler production hub