Nineteen months after Honda Motorcycles launched its most competitively priced model anywhere in the world - the Dream Yuga -Honda's wish of grabbing the number one slot in the Indian two wheeler market, is far from reality.
With under 8 percent share in the mass bike market in the first half of the year, Honda will have to push back its plans.
YS Guleria, vice president- sales & marketing, HMSI, says, “Its not any model, it's a very important model as far as Honda's next direction is concerned\\\\\\\\"
Aptly named the 'Dream' series, Yuga and Neo were Honda's answer to dislodge erstwhile partner Hero from the number one slot by 2015. Positioned in the voluminous entry level segment- that accounts for two-thirds of the total motorcycles sold in India- individual model-wise data accessed by CNBC TV18 for the period April-October shows that despite the tall promises Dream Yuga and Neo have made little impact.
Consider this, while Splendor and Passion enjoy a market share of over 28 percent and 21 percent respectively, Dream Yuga's share is under 8 percent. The silver lining for HMSI however is that during this period while Dream's market share has more than doubled from 3.34% Splendor's share has fallen by 4 percentage points.
Analysts, however, say that if HMSI has to beat Hero even by 2020 it would need to spruce up its share and volumes in this segment. HMSI admits that lack of outlets in rural areas has been a handicap.
Guleria further said for a segment that is so conservative the bike has met the expectations. He said that with the company making inroads into rural areas the sales of its two-flagship motorcycle brands would only increase. Currently the company has around 700 dealerships.
Even in the pecking order, Dream series has just this year entered the top five selling brands after Hero's Splendor, Passion, Deluxe and Bajaj's Discover.
Analysts argue that for Honda to even remotely meet the promise of beating Hero it would have to rapidly expand capacity which till the end of fiscal year 2014 would stand at 4.6 million units as against Hero MotoCorp's over 7 million units capacity. Sources add that though HMSI has been scouting for land in Gujarat and Maharashtra for a new plant no final decision has been taken on that front yet. Hope for Honda may well rest on its scooters which in the first half of this fiscal year enjoyed an overall market share of over 50 percent led by the best-selling Activa.
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