Honda’s two-wheeler arm targets up to 12% growth, despite EV onslaught from rivals

Honda is on a cruise control because a significant chunk of its sales is coming from rural India, according to Mathur.

Honda Motorcycles and Scooters India (HMSI) is looking to clock an impressive double-digit growth of up to 12 per cent and record sales of around 5.4 million units during the financial year (FY) 2024-25. The company is bullish about its growth prospects, despite competition from  rivals such as Ola Electric, Ather Energy, Bajaj Auto, TVS Motor Company. An official of the Japanese two-wheeler manufacturer attributed the optimism to a distinct customer base for petrol-driven two-wheelers, motorcycles and battery-driven scooters.

“Indian market is mature enough to understand the segmentation. The electric two-wheeler is a growing segment. Besides, the choice of a product is a customer's sole prerogative," Yogesh Mathur, Director-Sales and Marketing, HMSI, told Moneycontrol during an exclusive interaction.

Honda’s two-wheeler arm registered sales of 48,93,522 units — a growth of 12 per cent — last year. Data shows that 60 per cent of its sales were in the internal combustion engine (ICE) scooter segment and motorcycle made up the rest 40 per cent.

"Activa contributes nearly half of our total sales and we expect a similar trend this year as well,” added Mathur. He also affirmed that the demand for Honda Activa, which is currently available in 100cc and 125cc variants, is on an upswing, despite the availability of wider alternatives in the electric two-wheelers (E2W) market.

Priced between Rs 76,000 and 82,000 (ex-showroom, Delhi), Honda Activa was the highest-selling scooter brand in the two-wheeler segment, excluding E2Ws, with a marketshare of 18.16 per cent. The company sold 22,54,537 units of this model across various segments during the previous fiscal, around 5 per cent higher than its FY22-23 figure at 21,49,658 units, according to  industry estimates.

Eyeing slice of commuter bike pie

Though Honda dominates the ICE scooter market, the market is lead by Hero MotoCorp on the back of its largest-selling motorcycle brand, Splendor, across various segments in the two-wheeler market. The Pawan Munjal-led company sold 32,93,924 units with a marketshare at 26.52 per cent.

Mathur cited that Honda has hit a sweet spot. The company is experiencing an unprecedented surge in the commuter segment, thanks to its 100cc Shine (priced at Rs 67,296, ex-showroom in Delhi).

“Last year, we were not available in 100cc motorcycle category, which accounted for around one-third of sales in the two-wheeler category. Fortunately, Shine 100, which was launched last year, is turning the tide for us," added Mathur.

Honda is on a cruise control because a significant chunk of its sales is coming from rural India, according to Mathur. “We spend our resources and energy to tap into select markets and target audience. The efforts are paying rich dividends for us," he added.

EV foray this fiscal

Honda is looking to enter the electric vehicle segment this fiscal and eyes one-third of its overall sales to accrue from it by 2030.

Asked if its maiden e-scooter will eat into Activa’s sales, Mathur said, “Cannibalisation always happen, even between scooters and motorcycles. Though there will be an impact of cannibalisation, it will be difficult to accurately predict a percentage."

The upcoming festive season, which starts next month, holds the key for the company to clock a growth of up to 12 per cent.

“Usually, festivals are spread to two months. This time around,  it will be over in a month. So, October sales will be a determining factor. Be that as it may, we are still looking at a growth figure of up to 12 per cent," he added.