Honda pins hope on trust factor to drive electric 2W sales

Honda Motorcycle & Scooter India (HMSI) has been late to the electric vehicle party in India, being the last major traditional two-wheeler maker to enter the burgeoning electric vehicle space. However, the Japanese automaker, which launched its first set of electric vehicles in India on Wednesday, is optimistic about its electric vehicle portfolio and pins hopes to benefit from consumer trust for a strong head start.

“To understand customer needs, we did rigorous customer interactions. People who are adopting EVs are not at ease because they are yet to get the right solution to address their anxiety around range, performance, durability and battery life and after-sales service network. While working on these, we further understood that the customer today is looking forward for a brand which they trust and offers them complete reliability,” said Yogesh Mathur, director for sales and marketing at HMSI.

Two-wheeler and three-wheeler markets in India have been witnessing faster adoption of electric vehicles, compared to other segments. Currently, the penetration of electric vehicles in India’s two-wheeler market is around 6-7%. Lower operating costs, strong demand for last-mile delivery, and demand incentives from the government have been boosting sales over the last couple of years.

Bengaluru-based startup Ola Electric is the market leader in the electric two-wheeler market with a share of around 30%. Though the entry of traditional OEMs such as Bajaj Auto, TVS Motor, Hero MotoCorp led to some market consolidation and market share gains, there are still several startups such as Ather Energy, Greaves Electric, Bgauss auto and Kinetic Green that still have considerable market share.

Ola Electric has been in the limelight recently amid allegations about the company’s after-sales service. The Central Consumer Protection Authority has recently issued a show cause notice Ola Electric for violation of consumer rights, misleading advertisement and unfair trade practices. Following this, the Ministry of Heavy Industries also stepped in. According to the National Consumer Helpline portal, of nearly 10,000 complaints received about Ola Electric till October, the most common issues raised by consumers were about service and repair delays.

“The most important aspect is the trust that consumers can rely upon. We understand that there are a lot of pain points of electric vehicle customers. They are not really happy with the kind of products available. Our strategy is very clear in terms of establishing a service network prior to a sales network. That is our key focus, to make sure that they can rely on us as they have trust in the Honda brand,” Mathur said.

Activa E and CQ1 are the first set of electric scooters launched by Honda for India. Activa E comes with a swapable battery solution, while CQ1 has a fixed battery. “We want to address the charging infrastructure issues and range anxiety with the swappable battery solution. On the other side, for customers who are willing to make a more eco-conscious choice through a more economical product, we are offering the fixed battery solution, which is practical to the core,” he noted.

Honda Motorcycle is adopting a phased rollout strategy for its electric vehicles across the country. In the first phase, the products will be available across three cities – Bengaluru, Delhi and Mumbai. Over the next one year, the company expects to cover 50% of the electric two-wheeler market in India.
 
The automaker has over 6,000 sales and service touchpoints across the country, including Red Wing dealerships. “The sales of EVs will be through our existing Red Wing dealerships. They will have a dedicated corner for electric vehicles. We do not plan to have separate network…The main dealers, which are 1,000 plu, will be initially upgraded to take care of electric vehicle sales and services,” he added.

READ MORE: Honda Motorcycle & Scooters India targets to produce 1 lakh electric scooters in 2025

READ MORE: Honda says its electric two-wheelers viable without govt subsidies