Revealed: Honda 2Wheelers' aggressive growth strategy for FY2019

Honda Motorcycle & Scooter India (HMSI), the country’s second largest two-wheeler manufacturer, has revealed an aggressive growth plan for the new fiscal year 2018-19.

The company has earmarked investments of about Rs 800 crore for this fiscal as it aims to continue growing in double digits through new product launches and upgrades, all-India network expansion, focus on pre-owned two-wheeler business and a dedicated customer loyalty program.

It is understood that the investments will be made across heads covering the expansion and modernisation of its manufacturing facilities, new product developments, preparation for upcoming BS VI emission norms and other areas.

Brand-new model in the offing
HMSI has revealed plans to launch a brand-new model along with 18 product upgrades through FY2018-19. On the aftersales network front, it aims to have 6,000 touch-points across India by end-FY2019. It is understood that Honda has already laid down its key regional markets to pursue aggressive network expansion and sales.

Speaking in this context and disclosing Honda’s business direction, Minoru Kato, president and CEO, HMSI said, “India is already the No. 1 contributor to Honda’s global two-wheeler business. Our record sales have set a solid foundation in 2017-18 and Honda 2wheelers India will further consolidate its position in 2018-19 as we get ready to lead the biggest paradigm shift of 2020. Moving ahead with the same momentum on back of customer demand, we will invest close to Rs 800 crore as we aim for double-digit growth for the third consecutive year in a row as well.”

The company says that it is preparing to meet the 1 April 2020 deadline for implementation of BS VI emission norms across all products in the domestic market. Honda’s cross-functional BS VI task-force from sales, engineering, R&D, purchase and quality is proactively working on the primary objective of strengthening quality, product planning with cost competitiveness.

The company says that it has already informed its supplier base about its BS VI roadmap to ensure smooth and timely delivery of compliant products.

Eyeing the BS VI deadline, the company says that it has initiated the modernisation and unification of production constitution across all plants in India. It says this will help achieve higher productivity with efficiency and in matching product quality to world standards.

Bullish on pre-owned two-wheeler market
The company is also planning to expand its 'Best Deals' pre-owned  network to 250 touch-points this fiscal. Honda’s 'Best Deal network is India's first pre-owned two-wheeler sales network. The company has the pre-owned two-wheeler market in its sight as it says the replacement period of two-wheelers is coming down from earlier 5-7 years to 3-5 years now.

According to the company, its customer base of about 36 million customers in India offers new opportunities of customer retention. It also plans to soon launch a dedicated customer loyalty program this year with an aim of further boosting its brand image in the domestic market.

HMSI stood out as the only two-wheeler player that registered additional sales of over one million units in FY2017-18. The company’s domestic retail performance in the last fiscal has recorded an impressive growth of 22.23 percent YoY.

Elaborating in this context, Yadvinder Singh Guleria, senior vice-president – Sales & Marketing, HMSI, said, “2017-18 was a historic year for Honda in more than one way. Honda 2Wheelers India is the only two-wheeler company in the world to grow at a pace witnessed never before, adding one million plus incremental customers in a single year. Led by strong demand in both domestic and exports front, Honda’s sales apexed at 6,123,886 units with 22% growth. Honda successfully consolidated leadership further in scooter segment while aggressively gaining new motorcycle customers. The aggressive launch of 4 brand new models, new capacity infusion and addition of 500 new outlets propelled Honda’s growth story further and set the solid foundation for future growth.”

Autocar Professional learns that the company is in the process of adding a third assembly line at its scooter-only plant in Vithlapur in Gujarat. This step will enable Honda to boost the Gujarat plant’s existing annual production capacity from 1.2 million units to 1.8 million units. The commencement of operations on the third assembly line, however, remains unknown.

It is clear that Honda aims to leave no stone unturned in its attempt to close the gap further with India’s largest two-wheeler player and its arch-rival, Hero MotoCorp.

Also read this interview: Minoru Kato: 'Commuter motorcycle consumers are still playing it safe.'