Honda Cliq breaks into commuter bike price territory

Honda Motorcycle & Scooter India (HMSI), which is driving the rapidly growing domestic scooter market, had the Pune launch of its latest scooter model, the 110cc Cliq, yesterday. The Honda Cliq, which has become the most affordable scooter in India, has a sticker price of Rs 43,075 (ex-showroom, Pune).

The company, which is aggressively targeting scooter sales in rural India, first rolled out the Honda Cliq in Jaipur (Rajasthan) on June 20 at Rs 42,499 (ex-showroom, Delhi). According to HMSI officials, after Maharashtra, the model will be rolled out in Tamil Nadu in the coming days.

Honda now plans to launch the Cliq in several regional markets including the lucrative southern region and the northern region, where demand for commuter motorcycles dominates scooters.

“We plan to wrap up our regional launches of Honda Cliq by end-September,” YS Guleria told Autocar Professional on the sidelines of the scooter launch in Pune. Clearly, Honda’s extensive pan-India product rollout strategy runs into the beginning of festive season, 30- to 45-day period of festivals when the domestic two-wheeler market witnesses maximum sales in the financial year.

According to Guleria, while Maharashtra is India’s second largest two-wheeler market, it also is the country’s largest for scooters. “Maharashtra contributes about 13 percent of sales for HMSI,” he said during the event.

“We are looking at progressive families from the rural markets. Although these families have a limited budget for buying a two-wheeler for commuting purposes, they do not mind female family members riding the same when required. The critical markets in Maharashtra include Kolhapur, Sholapur belt, Vidarbha and other belts,” he disclosed.

Breaking the price barrier
HMSI, which commands about 60 percent share in India’s domestic scooter market, is well placed to roll out the most affordable automatic scooter in the market.

Banking on its strengths including the proven air-cooled, single-cylinder, 110cc engine borrowed from the successful models like Activa 3G, Dio and Aviator, Honda has achieved a retail price band that no other scooter manufacturer in India has so far.

Explaining the company’s intent behind the Cliq’s product packaging for rural markets, Guleria elaborated, “We are already seeing the signs of penetration in the rural territories. However, the speed of scooter penetration is very slow. So we conducted a market survey to gain insights on the same. This brought three to four points to our attention. First is the price barrier. The weighted average of all commuter motorcycles available in the rural markets is about Rs 45,000. The same for the scooters is around Rs 48,000. Secondly, the infrastructure in the rural territories limits the usage of scooters due to the smaller wheel size they generally offer. Another challenge exists in the form of the rural mindset, which believes that anything automatic is always expensive.”

“Honda is well placed to roll out an automatic scooter at a price lower than the weighted average price of motorcycles for the rural buyers, thanks to the benefits of large economies of scale. We have utilised the synergies with existing models for cost efficiencies,” he added.

Price-wise, the closest rival to the new 110cc Honda Cliq is the 102cc Hero Pleasure, which is positioned as a scooter for female urban commuters and retails for Rs 46,104 (post-GST ex-showroom, Delhi). With the scooter market already abuzz with speedy growth, the entry of the Cliq should make the coming months even more exciting.  

With a sticker price below Rs 45,000, the latest Honda scooter has ventured into commuter bike territory where few OEMs have dared to visit. Will the Cliq click? Watch this space.

Also read: Top 10 Scooters in June 2017

Scooters power 2-wheeler industry growth in Q1 2018