Two-wheeler major Honda Motorcycle and Scooter India (HMSI) aims to expand its bike portfolio in the country as it looks to bring in new set of customers from both rural and urban areas to its fold, a top company official said.
In an interview with PTI, HMSI's newly appointed President, CEO and Managing Director Atsushi Ogata said the company aims to bring in entry-level affordable products for rural areas while strengthening its mid-segment range (above 150cc) as well as super bike portfolio to cater to different set of customers.
The Japanese company, which dominates scooter segment in the country with products like Activa and Dio, is now looking to expand its footprint in rural areas with a new motorcycle which would sit below its CD 110 range, the company's most affordable bike at the moment.
The company's focus on filling the gaps in its portfolio to acquire more customers stems from the underlying fact that with the implementation of BS-VI emission norms, profitability on each model has come down, leading to its review of each model line.
"This issue (dip in profitability) is not only for HMSI, (but) for the entire industry. So therefore, we plan to review model by model profitability and try to change model mix itself to have profitable model mix," Ogata said.
The review would not impact the current models, but will look at filling the gaps in the portfolio to acquire all kinds of new customers, he added.
He noted that the company currently lacks entry level motorcycle which could compete with the competitors.
"Unfortunately, we do not have a strong product for rural areas, therefore definitely we need a model to acquire such kind of customers because Honda philosophy is to supply affordable products to customers. It is our responsibility to provide a product that people in rural areas can buy," Ogata said.
Therefore, it is under study to develop such kind of model for entry, he added.
"We don't have actual product in this segment. Of course, we have CD 110 but it cannot penetrate such markets," Ogata noted.
When asked for timeline for launch of the entry-level bike, Ogata said it will take some time "but not five or ten years".
Noting that India has diverse regions with different requirements in terms of mobility, Ogata said the company would also strengthen its mid-range portfolio (above 150cc) going ahead.
In India, there are high income groups as well, and Honda has the technology to bring in new products in this category as well, he said.
"We already have Unicorn and others in the over 150cc segment, but that is not enough. Soon enough, we will release some attractive models to establish new customer groups in urban centres," Ogata noted.
On premium bike segment, he said the focus now would be on localisation and India centric products.
"Currently, we don't have localised premium motorcycles with HMSI. Parts are coming from other countries and the products itself are oriented towards advanced countries."
He further said, "Africa Twin, CBR...they are not India oriented models...so we should have localised, original products exclusively tested for the Indian market. Such models are under study, today I cannot tell more but soon details will follow."
Ogata said the company would not only launch new products but would also like to create culture for such products with curated drives and other activities.
Currently, motorcycle sales account for just around 35 percent of the company's total sales in a year. Scooter range, on the other hand, accounts for the rest 65 percent of the sales.
HMSI currently sells eight bike models, including two superbikes, in the country.
Ogata, who was appointed HMSI head in May, could join office only last month due to COVID-19 led travel restrictions.
Prior to joining here, he was based in Bangkok, serving as Executive Director of Honda's Regional Operations (Asia & Oceania region).
When asked to list his immediate priorities as HMSI chief, Ogata said he would like to begin with a review of company's operations in order to recover from losses due to the coronavirus pandemic led lockdown.
"So my first task is recovery of last two month's losses, I think it is good opportunity to review everything in the company, not only the factories but also sales and other departments," he noted.
Ogata, who has over 35 years of experience across various roles around the globe, said the business scenario is improving month on month now.
"Hopefully it will be back to normal in next one year, so before that it would be helpful to review everything to get back the advantage," he noted.
When asked if HMSI would also look at enhancing exports going ahead, Ogata said Honda Motor Co has lot of expectations from Indian motorcycle buisness.
"Within three years, HMSI will become biggest resource for exports among the Honda Group because now we have BS-VI products which could be exported to even advanced countries," he noted.
The company is currently in discussions with headquarters as how to utilise its manufacturing prowess for expanding overseas shipments of vehicles as well as CKD (Completely Knocked Down) exports to Honda companies across the globe, Ogata said.
Currently, China, Thailand and Japan are the top exporting countries among Honda Group, he added.
At present, HMSI exports only 3 percent of its total volume to a few countries such as Sri Lanka, Nepal and Latin America.
HMSI has four plants located at Manesar (Haryana), Tapukara (Rajasthan), Narsapura (Karnataka) and Vithalapur (Gujarat), with total installed production capacity of 64 lakh units per annum.
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