Hero MotoCorp?s first indigenously developed bike will hit the roads in 2013-14. Eighteen months after parting ways with Honda, the Munjal-promoted company is looking to hold on to its market share in the 10-million-strong motorcycles market over which it once held sway. At the end of September 2012, the New Delhi-headquartered firm commanded a market share of 53.4%; a year ago, that was 220 basis points higher.
With Honda Motorcycle and Scooter India (HMSI) making steady inroads into the market ? the Japanese manufacturer?s share has risen from a shade under 7% in September last year to 11.4% currently ? Hero, say analysts, may be in a bit of a spot.
So far in 2012-13, the 125 cc bike segment has grown 31% compared with a 3% fall for 100cc bikes and a 16% drop for bikes larger than 125cc. Hero is a big player in the 100cc segment. The segment fetches it 78% of its volumes, which is why it will stay focussed on the 100-125cc segments, said Anil Dua, senior vice-president, marketing and sales, Hero MotoCorp. Hero will play to its strengths ? the evergreen Splendour and Passion models will see more variants to combat Honda?s recently launched ?Dream Yuga?.
The good news for the Rs 23,368-crore Hero is that it?s doing relatively well in the scooters space, having picked up 130 basis points of market share between June- September 2012 to command 17%. Honda’s scooter market share is now lower at 49.3% from 52.5% at the end of June.?We hope to garner a 25% share of the scooters market in the next 2-3 years by launching more models. Our monthly scooter sales now average 45,000 thanks to the launch of Maestro,? says Dua. Hero has 43% share of the scooter market, and its second scooter model ‘Maestro’, after Pleasure, has done well. Honda, meanwhile, has a share of 49.3% with the Activa the biggest selling scooter in the country. For Honda, scooters account for 56% of its India two-wheeler volumes.
In the six months to September, total bike sales in the country fell 1% to 4.97 million units while scooters fared better clocking a 20% jump to 1.42 million units, albeit on a smaller base. According to CLSA, recent trends in the two wheeler industry show worrisome signs for the incumbents. The share of scooters in industry sales continues to rise at the expense of motorcycles. Even within motorcycles, the share of 125cc bikes is rising rapidly. ?Scooters and 125cc bikes are the segments where Hero and Bajaj are relatively weaker and where Honda is stronger,? A CLSA report says.
Earlier this year, Hero forged technology alliances with US-based EBR, Austria’s AVL and Italy’s Engines Engineering. It is also setting up its own R&D centre in Rajasthan. Although two-wheeler volumes between July and September have seen a downward trend, Hero hopes to get back to its 5-lakh plus monthly sales target in October now that the festive season is here. Dua says production is running at close to seven million units.
Though erstwhile scooter major Bajaj Auto exited the space a few years back, other players are bullish on scooters. Yamaha launched the ‘Ray’ a month back while Suzuki Motorcycles is expanding production of models such as the Swish and Access. Dealer channels say both models are doing well.
