After ending fiscal 2015-16 with a marginal growth, Honda Motorcycle & Scooter India (HMSI), the second largest two-wheeler firm in India by volumes, is aiming for a double digit growth during the current fiscal helped by the additional capacity through its new factory.
According to Keita Muramatsu, President and Chief Executive Officer, HMSI, “2016-17 is going to be Honda’s most definitive year in India. I am excited that with the new fourth plant, we will be able to delight more than five million new customers in one year for the first time in Indian operations.
“As the world’s largest two-wheeler company, Honda will not only lead from the front with its strong double digit growth in fiscal year 2016-17 but also re-define and revolutionize the way young Indians ride a two-wheeler,” according to Mr. Keita Muramatsu. The company sold 4,483,459 units (both bikes and scooters) in 2015-16 as against the 4,452,010 units in 2014-15. It had set a total sales target of 47 lakh units for 2015-16.
HMSI’s domestic sales stood at 4,283,245 units as against 4,263,751 units. Its annual exports crossed two lakh units for the first time and stood at 200,114 units when compared with 188,259 units in the previous year.
Though the motorcycle market was hit last fiscal due to poor rural demand, Honda’s growth was limited by capacity constraints for bikes. As it focused more on scooters to execute huge order book on the back of robust demand scenario, bike sales dropped during the fiscal, pointed out a company official. The new factory is expected to be a key driver of growth for the company as its existing three plants in India were operating at full capacity. So, the additional capacity is vital to meet the demand spurred by the slew of product introductions made in the recent months.
The Rs.1,100 crore Gujarat factory has an annual production capacity of 1.2 million units. The total capacity of the company is expected to reach 58 lakh units by the end of 2016.
During 2015-16, HMSI had introduced 15 new models including its flagship CBR 650F. The company also created a new segment with Navi, the first 100 per cent Honda R&D India model – from concept to commercial production.
Though bike segment was under stress, scooter market continued to grow and Honda’s growth momentum also remained in tact. During the year, its flagship scooter Activa was the No. 1 selling two-wheeler in 6 out of 11 months of last fiscal.