(L-R) Yadvinder Singh Guleria, Minoru Kato, and Atsushi Ogata during the launch of all new Grazia
Honda’s rate of growth in India in the two-wheeler segment has beaten the growth of its peers. The company just launched an all-new scooter Grazia for the performance-seeking, urban buyer. In an interview to Moneycontrol's Swaraj Baggonkar Minoru Kato, President and Chief Executive of Honda Motorcycle and Scooter India gives an insight of Honda’s future plans which include the possibility of a brand new factory, a 150cc scooter, and competing with Royal Enfield.
Is Honda planning to enter battery-making technology?
In the case of Japan, Honda has started a new project with Hitachi to develop electric motors mainly for automobiles. Depending on battery innovation we need to wait. From our investigation it will take a long time.
You are operating at 100 percent capacity. You will need more capacity?
We are operating at full capacity presently. Yes, depending on the total market situation we will need more capacity. We just started investigations (discussions) for a new plant.
Would we see a natural progression to 150cc in scooters?
For daily commute the 125cc performance is good enough -- that is our understanding. But in the future a customer not just wants performance but to showcase the capability of his two-wheelers. Yes, we do expect bigger engines, better performance scooters in future. But as of today the balance between performance, price and customer expectation from the scooter is good enough from 125cc.
Do you have bigger capacity scooters overseas where they are used for leisure riding?
Honda has many global products which are sold in different markets. These include a 300cc scooter in Europe, 150cc scooter in Japan and Thailand, 600cc scooter in Japan and Europe. But in India it is very difficult to sell imported models. We need to prepare the production line for each model. In that case we have to consider volumes.
It is easier to get global models to India but it is equally important to develop products locally. Where will Honda strike the balance?
We want to focus on both by utilizing global models for the local [market] and at the same time develop Indian R&D (research and development) too which will focus on Indian market.
The cruiser bike segment is growing very fast where Royal Enfield is the leader. Is Honda ignoring that segment completely?
Of course, we are looking at that segment; I don’t want to ignore it. Yes, we have many products lined up in 400cc, 500cc, 600cc in other countries but if you look at the price point that is one of the biggest challenges for us. It is also under investigation. Of course, in the future we want to provide the customer such a bike.
Can the market expect a product in that segment by 2020?
Yes, you can expect that.
Honda has several cruiser products globally. You could bring them to India.
Historically, we have been doing customer surveys to see what the customer wants and then depending on customer demand we prioritize. We want to focus on the cruiser segment in the future. We expect, like other segments, this segment will also increase. It is part of the several on-going projects.
Are you happy with the performance of the Cliq?
Yes, we are happy with the performance of the Cliq. We are doing 10,000 units in sales of the Cliq a month.
The Activa 125 contributes 10 percent of your total scooter sales. With the Grazia coming in do you expect the 125cc share going up?
Yes we do expect it to go up to 15-20 percent with the contribution of the Grazia.