Honda Motorcycle and Scooters India (HMSI) on Tuesday said it would invest ₹800 crore in the current financial year to expand footprint in the country.
“India is already the number one contributor to Honda’s global two-wheeler business. We will further consolidate our position in 2018-19 as we get ready to lead the biggest paradigm shift of 2020,” HMSI president and CEO Minoru Kato said. “We will invest close to ₹800 crore as we aim for double digit growth for the third consecutive year in a row as well,” he added.
BS VI transition
The company, which posted a growth of 22% in 2017-18, said the investment would be used mainly for unveiling new products, expansion of retail touch points and preparations to move towards BS VI. In the current fiscal, HMSI plans to expand sales network to 6,000 touch points from 5,700 outlets last financial year.
“We will enhance our presence, especially in rural areas,” Mr. Kato said. The company also plans to unveil a brand new model and 18 upgrades of existing products in 2018-19.
Talking about company's 2020 plans, Mr. Kato said the two- wheeler maker is set to upgrade to BS VI emission norms much before the deadline.
HMSI said it will consider at increasing production facility only after 2020. It currently has four manufacturing plants in the country with an installed capacity of 64 lakh units per annum.
“We expect two-wheeler sales of the entire industry to dip post 2020 as product prices would increase (due to implementation of BS-VI emission norms), but after it stabilises, the industry is expected to grow,” HMSI president and CEO Minoru Kato said.
Till 2020, the company would manage demand from the current facilities by increasing efficiencies, he added. “But after 2020, we can add production capacity,” he said.
Asked about company's ambition to become the top two-wheeler maker in the country, beating the market leader Hero MotoCorp, Mr Kato said, “We want to become number one as early as possible, but still there is lot of gap between us and the leader.”
In 2017-18, HMSI's sold 57,75,287 units of two-wheelers in the domestic market, while Hero MotoCorp sold 73,82,718 units.
