7/8 two-wheeler companies cruise; capacity still drags Honda

Scooter makers have registered healthy growth except the largest of them all — Honda Motorcycle & Scooter India (HMSI) — last month.

Of the eight two-wheeler manufacturers in India, only HMSI has reported sales decline in scooters this May and even the overall domestic sales growth for the company has been flat. Reason? Continued capacity constraint.

NK Rattan, head, sales and marketing, HMSI, said scooter sales were flat even in 2010-11 and the company has lost share to competitors in the first two months of this fiscal because of capacity shortfall.

“We are using maximum capacity in Manesar and making all the vehicles we can. Until the new facility becomes operational next month, there is nothing else we can do.”

Rattan said as many as 1.6 lakh customers, who have already booked the Activa scooter, are waiting to get deliveries whereas another 50,000-odd customers are waiting for the CB Shine bike.
The waiting period for Activa is up to 4 months and for CB Shine about 2 months. The situation is expected to improve significantly once the new facility becomes operational at Tapukara (Rajasthan).

“We will make 2,200 vehicles a day there in the first phase till September. The six models — three scooters and three bikes — which have substantial bookings will be made there initially to clear the backlog. The plant will be expanded to 4,400 units a day production capacity by March next year.”

Though Rattan did not reply to a query on which of his competitors have grabbed market share from HMSI because of these capacity issues, he said the situation will improve in the coming months.
He said the company was on course to launch a new scooter and a brand new bike this fiscal but denied any plans to launch an entry level motorcycle — which could compete head on with Hero Honda Motors’ entry level products — this fiscal.   

As per the Society of Indian Automobile Manufacturers data, HMSI sold 75,012 scooters in May against 76,980 a year ago.
This, when overall scooter sales jumped to 175,160 units (157,509 units). And despite having just one scooter model in its portfolio, rival Hero Honda Motors gained the most with additional sales of 5.722 units in the 12 months to sell 29,460 units.

TVS Motor Co was close behind, adding 5,236 units at 35.803 units. Mahindra 2 wheelers and Suzuki Motorcycle India also gained. Rattan said HMSI sold 9.05 lakh scooters in the last fiscal.
In bikes, HMSI managed to grow in line with the industry and even export growth was robust.