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Honda eyes the sub-100cc segment

From Automonitor| January 30,2007

Honda Motorcycle & Scooter India (HMSI) is apparently working on an offering in the sub-100cc segment.

Sources that Auto Monitorspoke to have indicated that this product would aim to take on the Scooty Pep+, the TVS Motor offering that has seen brisk sales. The Japanese major would appear to be keen to tap this segment with an offering that can be a worthy rival to the Scooty. Company officials however, were not available for comments.

Meanwhile, dealers in Delhi and Mumbai are facing shortage in supplies of the company's 100cc scooter offering, Activa. Dealers in Delhi have indicated that while there is a waiting period ranging from 15-20 days to 35-40 days on the Activa,in Mumbai customers may even have to wait for up to three months or so.

Although the Activa has been the company's best bet in the scooter market, in recent months, supplies appear to have fallen short of the market demand, said dealers.

While bookings amount to 120-150 units per month at one dealership in Delhi, supplies have been coming in lots of 4-5 units per week, that approximately works out to 20 units every month. Another Delhi dealer, to ensure prospective customers do not opt out of a booking, collects a token amount of Rs 1000 towards booking an Activa.

Interestingly, the recent sealing drive in Delhi against illegal constructions too has contributed to this, said a dealer. Supplies however, are expected to be normalised some time soon, they said.

Overall, HMSI, the wholly owned subsidiary of Honda Motor has been doing brisk business with its scooters in the 100 cc segment. Last month, the company sold a combined 35,664 units of Activa and Dio together as against its nearest rival in TVS Motor, who sold 21,467 units in October. In comparison, Hero Honda sold 11,088 units of its only scooter offering, Pleasure.

Sales figures

In September, HMSI had sold 31,005 units in the 100 cc scooter market, over 800 units more compared to TVS Motor Co. Cumulative sales figures for HMSI in this particular segment during April-October 2006 is 222,067 units, while TVS and Hero Honda sold 147,426 units and 53,915 units respectively. The company has achieved sales of one million units of Activa and plans to introduce further models to strengthen its position.

Production in October 2006, in fact, has fallen by 6.64 percent on Y-O-Y basis to 56,739 units, while cumulative sales accounted for 54,416 units, down 5.83 percent. However, cumulative production in April-October has grown 11.32 percent to 371,044 units and sales 15.44 percent 352,864 units.

The growth in sales has come thanks to the good performance in both the scooter and bike segments. The Shine in the 125 cc and Unicorn in the 150 cc bike segments has been selling decent numbers.

In a recent interview to Auto Monitor, President and CEO, HMSI, Yukihiro Aoshima had announced an investment Rs 400 crore in the next two-three years on capacity expansion. 'Our combined capacity of scooters and motorcycles at the existing facility is about nine lakh units annually. In another two to three years we aim to increase this to 1.2 million units,' he had said. HMSI will fund the expansion through its own reserves.

The company meanwhile is looking at selling about 7.5-8 lakh units of two-wheelers this year, up from the six lakh units it sold last year. Aoshima had said HMSI expects to sell about five lakh scooters and 2.5-3 lakh motorcycles. 'In another three years time our aim is to have an equal amount of scooters and motorcycles sold,' Aoshima had indicated.

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