HMSI, which commands a share of near-60 percent in India’s domestic scooter market, is to launch the Cliq in Tamil Nadu today. It aims to also target moped buyers in the state.
21 Aug 2017 | 7734 Views | By Amit Panday
After launching its 110cc Cliq scooter in Rajasthan and Maharashtra, Honda Motorcycle & Scooter India is set to roll it out in Tamil Nadu today, where it plans to also target a large number of moped buyers looking to upgrade to a new set of wheels.
On June ...
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After launching its 110cc Cliq scooter in Rajasthan and Maharashtra, Honda Motorcycle & Scooter India is set to roll it out in Tamil Nadu today, where it plans to also target a large number of moped buyers looking to upgrade to a new set of wheels.
On June 20, Honda Motorcycle & Scooter India (HMSI) launched the new Cliq, the country’s most affordable 110cc scooter, in Jaipur with a starting price-tag of Rs 42,499 (ex-showroom, Delhi). The model, which is being manufactured at HMSI’s Tapukara factory, was rolled out only in Rajasthan.
With GST in place, the starting price of this scooter, which comes in two variants – standard and deluxe (sole difference being the body graphics) –now stands revised to Rs 41,784 (ex-showroom, Jaipur). Almost a month later, on July 19, the company launched the Cliq in Pune selecting Maharashtra as the second state for its regional launch but priced at Rs 43,076 (ex-showroom, Pune).
HMSI, which commands a share of near-60 percent in India’s domestic scooter market, now plans to launch the Cliq in Tamil Nadu as its third state soon as part of the overall launch plan for several regional markets including the lucrative southern region and the northern region, where demand for commuter motorcycles dominates that of scooters.
“We plan to wrap up our regional launches of Honda Cliq by end- September,” YS Guleria, senior vice-president, sales and marketing, HMSI (pictured below) told Autocar Professional on the sidelines of the scooter launch in Pune. Clearly, Honda’s extensive all-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.
RURAL APPEAL
The new 110cc Honda Cliq is primarily targeted at rural commuters. The demand for scooters has caught up well in the urban and semi-urban markets across the country. However, according to HMSI officials, it is time that Honda must capitalise on creating an all-new sub-segment within the scooter space and extend the same to tap the demand in rural India.
On June 20 in Jaipur, Minoru Kato, who has recently taken the charge as the new president and CEO at HMSI, had said, “Six out of 10 two-wheelers sold in India belong to the 100-110cc segment. Within this segment, automatic scooters have witnessed tremendous growth and now count for almost half of the total size. With the highly increasing demand and varied customer needs, this segment is poised for sub-segmentation. Honda has developed the Cliq, which would address the needs of customers with additional value of comfort and convenience.”
Banking on its strengths including the proven air-cooled, four-stroke, single-cylinder, 110cc engine borrowed from the Activa 3G, Dio and Aviator, along with deep-rooted synergies from its scooter production, Honda has achieved a retail price band in India that no other scooter manufacturer has so far.
Well placed to do so, the Cliq clearly underlines HMSI’s intent to penetrate deeper into the semi-urban and rural markets as the company emphasises upon the scooter’s value for money and practical features. For example, the company claims to have introduced an industry first feature of special block pattern tyres for providing extra grip to the riders on patchy roads.
Other features that, according to HMSI, will suit the needs of a typical rural customer include a long and wider seat, additional load carrier, under-seat storage with mobile charging socket, low seat height along with a kerb weight of only 102kg, thus making the new model easier to manoeuvre in typical traffic conditions as well as narrow lanes.
Additionally, the Cliq also offers Honda-typical features such as combi-brake system (CBS) and the refined engine with fuel-friendly HET technology and automatic headlamp on (AHO).
“The wave of scooterisation has moved beyond the large metro cities as commuters from smaller towns too are understanding the utility and convenience of owning an automatic scooter. We have realised that females are not limited to the pillion seat anymore; instead, they have taken the front seat. Our potential customers are the progressive families living in rural pockets of India. 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. We are also looking at active senior citizens who are agile and do household work on their own as customers,” highlighted Guleria.
Scooter at the price of a 100cc commuter motorcycle
Honda has four 110cc mass commuter (Livo, Dream Yuga, Dream Neo, CD 110) and two 125cc executive commuter (CB Shine, CB Shine SP) motorcycle models in its India portfolio. Although the 125cc motorcycle delivered volumes to the company, Honda largely failed to break into the core motorcycle markets dominated by its arch-rival and the number one player Hero MotoCorp.
This, despite Honda bagging the position of becoming the second largest motorcycle company in India in Q1 FY2018 from Bajaj Auto, which witnessed its domestic volumes drop by a sharp 22.29 percent YoY during the same period.
Nevertheless, Guleria humbly credits Honda’s rising position to market dynamics. “Although our 125cc, 150/160cc motorcycles have performed well in the market, our mass commuter motorcycles (110cc) did not deliver as per our expectations,” Guleria told Autocar Professional.
This underlines what Honda now aims to achieve with its sixth and most affordable scooter. It clearly aims to bank on its core strengths and offer a scooter packaged at the competitive price of a mass commuter motorcycle.
Delving into the rural mindset
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).
Rajasthan is one of the states where the scooter penetration rate is understood to be lower than 33 percent, which currently represents pan- India scooter penetration. The same in Maharashtra, said to be India’s largest scooter market among all states, is roughly 45 percent, according to the senior HMSI official.
Tamil Nadu, along with Karnataka, is a lucrative market for not only scooters but also for mopeds, a two-wheeler segment where TVS Motor commands a monopoly. Notably, with its aggressive pricing of the Cliq, Honda will also aim at tapping moped customers in Tamil Nadu and Karnataka. Interestingly, the 100cc moped (TVS XL 100) is currently retailed with a starting on-road price tag of Rs 39,074 in Chennai, according to the company website.
HMSI is subsequently ramping up production and supply chain network for the Cliq as it continues to add a new regional market. Although company officials have not disclosed the bookings this model has received in Rajasthan so far, they are clear with what they want to achieve with the Cliq scooter.
Also read : Honda Cliq is India’s most affordable scooter
This article was first published in Autocar Professional's August 15, 2017 issue