With more production capacity being freed up with the new Gujarat plant, Honda Motorcycle & Scooter India is looking to increase its exports. We reveal the export game-plan.
04 Jul 2016 | 7118 Views | By Shobha Mathur
Not many know that while the 110cc Honda Activa scooter is Honda Motorcycle & Scooter India’s (HMSI) best-selling scooter model in India, it is its 110cc Dio sibling that dominates in export markets.
With its fourth assembly line going on stream at Gujaraton July 1, HMSI now has ...
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Not many know that while the 110cc Honda Activa scooter is Honda Motorcycle & Scooter India’s (HMSI) best-selling scooter model in India, it is its 110cc Dio sibling that dominates in export markets.
With its fourth assembly line going on stream at Gujarat on July 1, HMSI now has elbow space to manoeuvre and step up its exports and as well as add new markets. The company is targeting exports of 250,000 units in FY2017 out of the total estimated sales of 54.3 lakh units, YS Guleria, senior VP (sales and marketing), HMSI, told Autocar Professional.
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In 2015-16, exports, which constitute a small number for HMSI out of its overall sales, grew to 200,145 units (+7.31% YoY) out of the 44.8 lakh units sold during FY’16. In the earlier two fiscal, export numbers were in the 170,000-180,000 range due to capacity constraints; that also saw HMSI servicing the domestic market first. Also, key global two-wheeler markets for Honda were seeing an economic slowdown, along with the fact that HMSI does not compete in multiple markets as parent Honda has a presence in 130 countries through 100 percent subsidiaries or through joint ventures. Further, Indian models are exported overseas based on their existing product line-up, homologation norms and likeability of the models in export markets.
At present, HMSI’s largest export markets are the SAARC countries – in May 2016, HMSI sold 10,000 units in Sri Lanka, its highest for that market. There are now plans to hike volumes to Sri Lanka, Nepal and Bangladesh where the Dio scooter is the preferred model besides the 125cc CB Shine and CB Hornet 160R motorcycles. Next in importance is the Latin American market where Honda two-wheelers are shipped to Mexico, Columbia, Guatemala and Equador.
“This year we plan to add new markets of Uruguay, Paraguay and the Honduras as volumes increase here. While the Latin American markets prefer motorcycles, SAARC countries are more scooter- oriented,” says Guleria. For instance, in Latin America bikes constitute 70 percent of the exports and scooters the balance 30 percent. In SAARC countries, scooters account for 60 percent of the exports and bikes the balance 40 percent.
Guleria says though the 110cc CB Twister and both the 150cc and 160cc CB Trigger have been discontinued for the India market, they continue to be produced for Latin American markets. In addition, the CB Unicorn 160 is also exported to these countries along with the 110cc Dio and Activa scooters.
Of HMSI’s total export basket, SAARC countries constitute 60 percent, LATAM 38 percent and the Middle East the remaining 2 percent.
During June 2016, Honda’s exports grew by 13 percent to 19,243 units (June 2015: 17,011) and domestic sales were up 23 percent 408,141 units (June 2015: 331,797).
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