With the split between the Hero Group and Honda , we can expect Honda to be far more aggressive in their launching of bikes and pricing them. They have the technical skills, they have understood the dynamics of Indian market but what remains to be seen is how they fare against the the top Indian Motorcycle manufacturers; Bajaj and TVS.
In an interview Mr Rajiv Bajaj said" No, we are extremely aware of that. My concern is less with scale and more with excellence. I am very curious to see what Honda does in the market place, how it tries to make space for itself in the motorcycle industry because so far despite having five brands out there for the last six years, they have not made much of an impact but one cannot obviously underestimate them. From what I know of what the others are doing, I am really not too concerned but certainly, we watch Honda very carefully." This just goes on to show that Honda does have the capability to turn the market in their favour with the right strategies and launches. Honda stands just behind TVS in terms of market share with a few point difference at 12.5%.
Sources say that Honda have started their R&D on a low cost 100cc bike for the Asian market i.e. China and India. It is investing Rs 500 crore to put up a second plant in Rajasthan with a capacity to make 600,000 bikes annually, which can be doubled. The new capacity will be up and running by the second half of 2011 when the company will have a total capacity to make 2.2 million two-wheelers. This will reduce the capacity gap, that it currently has with Hero Honda (5.2 million) or Bajaj Auto (4.98 million by March 2011).
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