The wholly owned arm, Honda Motorcycle & Scooter India (HMSI), has sold 1 million units of the flagship scooter, Activa, within five years of its arrival in India.
NEW DELHI: Japanese major Honda appears to be betting big on India, especially in the two-wheeler segment.
Not only is its joint venture company, Hero Honda Motors, witnessing continuous expansion, even its wholly owned subsidiary appears to be going from strength to strength.
Sample this: The wholly owned arm, Honda Motorcycle & Scooter India (HMSI), has sold 1 million units of the flagship scooter, Activa, within five years of its arrival in India.
Even this fiscal, the growth saga appears to be continuing, with HMSI targeting sales of 7-8 lakh units against 6 lakh it logged in 2005-06. And to keep up with this pace of growth, the company has decided to make significant investments in capacity expansion.
Over the next three years, HMSI will invest Rs 400 crore in capacity expansion and modernisation, taking its total investment in India to Rs 1,000 crore.
The latest round of expansion will result in installed capacity going up to 12 lakh units against the current 9 lakh. Besides, the company is planning to launch two variants of motorcycles this fiscal and is also considering the launch of a fuel-injection two-wheeler in India.
Says president and CEO Y Aoshima, “The Rs 400 crore investment we have planned till 2009 will all come from internal accruals. This investment will enable our production capacity each for scooters and motorcycles to touch the 6-lakh-per-year mark.”
When asked about the parent company’s endeavour to increase the synergy between various Honda operations in India, Aoshima said that HMSI and Hero Honda have held several meetings to sharpen market focus and discuss future product strategies.
He pointed out that the synergies between the two companies could extend to distribution and component sourcing but did not elaborate further.
On the recent strike by contract employees at its manufacturing plant in Haryana, Aoshima said that there was no production loss since the number of workers on strike was rather small.
HMSI’s model lineup includes scooters Activa, Deo and Eterno, and bikes Unicorn and Shine. With a sales of Rs 1,700 crore last fiscal, it is the country’s fourth largest two-wheeler company.
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