Honda Motorcycle & Scooter India (HMSI), which has a 27% market share of the overall two-wheeler market, 55% of the scooter market and 14% of the motorcycle market, has announced plans to strengthen its domestic product portfolio. With BS VI emission norms barely two months away, the company is set to discontinue sales of 4-5 models in India, including the Navi and Cliq.
The Honda Navi, which was launched at the Auto Expo 2016, as the company's first fully India-designed and produced model targeted at millennials and priced aggressively, did not manage to live up to the company's expectations. In fact, despite not being upgraded to BS VI, the Navi still remains a strong proposition for HMSI but in overseas market, a case similar to the company's most affordable scooter, the Cliq, which was launched in 2016. "In some countries in Latin America, the Navi is the number one selling product in the total two-wheeler market. So we will continue the production of Navi for export markets, and there are numbers which are increasing year on year in terms of exports," says Y S Gueleria, senior VP, sales and marketing, Honda Motorcycle & Scooter India.
Responding to a query on the company's electrification plans, Minoru Kato, president and CEO, Honda Motorcycle and Scooter India said: "We already have electric two-wheelers in Japan, Thailand, Indonesia and Vietnam, which are the main visibility programme. In India, we will bring a product from our China operations and begin a feasibility study this year."
According to Kato, it takes around three years for a new product to be made available in the market from the time the feasibility study begins through to the final production. "It is very difficult to get customers’ acceptance (for current electric two-wheelers), because of the price because of the range and performance. It's very difficult to meet customers’ expectation, based on the current latest technology," added Kato.
FY2021 to be a year of flat sales
The Indian automotive industry has witnessed around 18 months of sales slowdown, and there seems to be very little relief in sight. The situation will be quite similar for the overall auto industry in the first two quarters of FY2021, says HMSI, with a likely uptick beginning around the "festive season".
Nonetheless, HMSI says work is in full swing at its new line at the Gujarat plant and is right on schedule. "We have invested around Rs 1,800 crore in FY2020, which includes new models, transition to BS VI, investment in the factory tooling and equipment for BS VI and the construction of additional third line at the Gujarat factory," says Guleria. However, he did not comment on any new investment plans.
Also, HMSI which has over 6,000 touchpoints is expected to see an addition of more than 300 new dealerships and workshops in location where the company "still does not have a presence."
Focus on BS VI exports
HMSI's potential in its global operations will open up with BS VI preparedness. "Honda being a global company has a widespread overall strategy from a manufacturing point of view. Honda Motor Japan basically decides which country produces what model and where it will be sold. We will be BS VI-ready in April, which has basically increased our stakes. That allows us to raise our hand and say that India is ready and many more countries are now open for us. But once the OBD 2 norms come in 2023, we will be able to export even to Japan. But whether we will be elevated to export to new countries or not, that will be finally seen by Honda Motors, but we will be ready, raising our hand. We will put our stakes, while keeping high quality because the requirement of quality will be always much more for the global markets," concluded Guleria.