HMSI expands range, to invest Rs 1,600 crore in FY’16, to make CBR650F at Manesar

Honda Motorcycle & Scooter India has kicked off 2015 with a display of five new models out of the total 15 models it had planned to launch during the year. Earlier today, the company launched the new Activa 3G automatic scooter, which comes with new-gen styling and 60kpl delivered by Honda Eco Technology. Priced at Rs 48,852 (ex-showroom Delhi), the Activa 3G also gets a longer and wider seat, maintenance-free battery, combined braking system, full metal body, and keylock shutter. Despatches of the new Activa have started to dealerships across India.

The four other new models launched today comprise the 125cc CB Shine motorcycle with new styling and design, three refreshed 2015 editions of the 110cc Dream Yuga and Dream Neo commuter bikes, and the new Dio scooter which will also be the first model to roll out from the upcoming Gujarat plant in end-January 2016. Honda also confirmed that it launch a brand-new model both in the scooter and motorcycle segment during July-August this year. 

The new CB Shine, which gets stylish new graphics, visors, tail-light and alloy wheels and comes with the HET engine and combi braking system, will be available at HMSI dealerships starting March. 

Of the trio of refreshed models, both the Dream Yuga and Dream Neo 2015 sport new decals on the front cowl, side panel and fuel tank. Despatches of both bikes are slated to commence from end-February. Meanwhile, the Dio scooter now emblazoned with new stickers, side panel graphics and a sporty logo, will be sold in a new dual-tone colour and will hit the market by end- March.

With this, Honda has shown six of its new models for the year that started with the launch of the first model, the CB Unicorn 160 in January.

Speaking at the launch today, Keita Muramatsu, president and CEO, said, “With India’s contribution reaching 25 percent of global Honda motorcycle sales this year, India is and will remain Honda’s priority market globally. However, I consider 50 lakh units to be the turning point of Honda in India. In FY’16, Honda is taking the next leap of business expansion. We will be bigger with new manufacturing capabilities and aggressively growing network in the hinterlands, better at customer satisfaction and bolder with our introduction of 15 new models in just one year.”

While gravitating to end the current fiscal with sales of 45 lakh units, HMSI has a conservative target of 48 lakh for FY’16 considering that the Gujarat plant that will expand production capacity to 58 lakh units will be functional only in January 2016.

At present, automatic scooters account for 55 percent market share of Honda and the two-wheeler manufacturer is looking to add another 3 percent to this figure in the next fiscal according to Muramatsu. He says the scooter market is growing faster than motorcycles at a relative 30 percent annually.

Honda is now concentrating on making all its models compatible to BS-IV emission norms and Muramatsu detailed that currently homologation is underway for the BS-IV technology products that are expected to roll out, step by step, in all the models by next March, further improving fuel efficiency.

As regards the Indian government making it mandatory for 125cc bikes to have ABS, he said it depends on the timing of the announcement. If it is suddenly announced, companies would not have adequate time to develop the braking product.

Meanwhile, HMSI is mulling an investment of Rs 1,600 crore during 2015-16 once its new plant in Gujarat is ready and on new product developments including the CBR 650F, 4-cylinder engine sportsbike which will be launched in 2015.

In 2014-15, the investment was to the tune of Rs 1,084 crore spent on the new Gujarat plant as well as on increasing scooter capacity at its existing three plants. At present, Honda scooters have a backlog of 50,000 units with the Activa 125 selling 14,000 units a month.

“In India it is not so easy to assemble a high-speed, high-power-engined motorcycle and we have to decide how to increase its localisation,” said Muramatsu about the proposed CBR650F. This sports bike will be made at the Manesar plant in small numbers initially and later, depending on the demand and localization level, numbers will be ramped up.

“We have received a good response from dealers and suppliers for it,’ added YS Guleria, VP (marketing and sales).  “To support our new model launches, we will be further strengthening our touchpoints during 2015-16 by another 500 to the existing 3,800 touchpoints as we need a viable network. In 2014-15, we are adding 1,000 touchpoints.”

The company is optimistic that with the enforcement of the GST regime from April 2016, a uniform all-India pricing would be practised for two-wheelers making the business environment more transparent. 

On the policy front, HMSI officials believe a continuation of excise incentives that would place more money in the hands of the consumer in the short term would help boost sales, supplementing the downslide of crude oil prices which have lowered ownership costs. In addition, controlled inflation and strengthening of commitments on infrastructure development and faster clearances to future investments would make the automotive market more buoyant.