7/25/2014 Honda kickstarts 3-year plan to beat Hero in 2-wheelers - Economic Times

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Honda kickstarts 3-year plan to beat 2 245 StumbleUp

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Malini Goyal, ET Bureau Mar 31, 2013, 06.30AM IST

Tags: Yamaha | two-wheelers | TVS | Sunday ET | Shinji Aoyama | Scooter India | Rajiv Bajaj |
market share | Honda C orporation | Honda | HMSI | Hero MotoC orp Ltd | Hero MotoC orp | Hero Honda |
Bajaj Auto | Anil Dua

Shinji Aoyama is a breath of fresh air. The Japanese honcho welcomes you with a namaskar. He is
comfortable speaking English. He reels out numbers in lakhs and crores (typically Indian denominations).
And he knows how to deal with swarming reporters looking for their daily fix without getting flustered. "One by
one please. I will answer all your questions," he says calmly.

Aoyama is the operating officer of Honda Corporation's motorcycle business based out of Japan. And he has
just infused some vroom in the local two-wheeler industry. "Very soon, we will make the dream to become
No. 1 [in India] come true," he announced at a recent press conference.

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7/25/2014 Honda kickstarts 3-year plan to beat Hero in 2-wheelers - Economic Times
Vol: 1358 shares traded Vol: 8672 shares traded Former head of Honda Motorcycle and Scooter India (HMSI), who spent four years as India CEO between
Prices | Financials | Company Info | Reports 2007 and 2011, Aoyama should know what he is talking about. "Given the current scenario in India, I believe
it will not be 2020 but 2016 or even 2015 by when we will attain No. 1 position here," he says.

RELATED ARTICLES That Honda wants to be numero uno in India is hardly surprising. The two-wheeler giant is the leader in
Aim to be No.1 in India within next decade: virtually every country it operates in, except China. In Brazil, it has a dominant 80% share, and controls half
Honda... of the pie in Indonesia.
March 21, 2011
What is eye-popping is the hurry in which Honda wants to rule Indian roads. A little over two years after it
Yadvinder Singh back to Honda Motorcycle & exited a joint venture with the Hero group, HMSI has overtaken TVS and more recently edged ahead of former
Scooters India No. 2 Bajaj Auto to become the second-largest two-wheeler company in India.
April 2, 2012
And, in the next two to three years, HMSI, with a market share of just under 20%, has set its sights on
Hero Honda, partner reworking deal beating the India leader Hero MotoCorp, which is currently sitting pretty with a 46% share. "We had 61% of
Septemb er 8, 2002 the Indian market [before the breakup with Hero Honda]. We are under 20% today. We have to be No. 1 here.
This is our dream," says Keita Muramatsu, CEO, HMSI.
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Power of Dreams

Such big dreams and audacious ambitions from any other company in any other sector would have
been dismissed as delusive. But there are three big reasons why HMSI's journey from here to king of
the road will be keenly watched — from within and outside the automobile industry.
The uniqueness of this race — three-horse as of now — is that the rivals are jostling for supremacy not just in
India but globally too. If Honda is the world's largest two-wheeler company (in volumes), Hero MotoCorp is not
far behind at No. 2 and Bajaj Auto at No. 4 (Yamaha occupies the third slot).
India, for now though, is where the biggest and most critical battle is playing out. Last year, India overtook
China to become the world's largest two-wheeler market with around 14 million unit sales. Further China,
despite selling 12 million odd two-wheelers annually — has so far been a difficult market for overseas
companies. It is crowded and fragmented with over 50 players, most having market shares in single digits.
Also, the dominance of cheap, low-quality bikes makes it an unattractive market for technology-focused
MNCs like Honda.

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7/25/2014 Honda kickstarts 3-year plan to beat Hero in 2-wheelers - Economic Times

This makes India the most important battleground for global two-wheeler companies. "This is perhaps the
only sector where Indian companies are world class in every way — technology, costs and production scale.
This battle will be about Indian versus Japanese with no one in between," says Sharad Verma, partner at the
consultancy firm BCG.

Lastly, it is not just India at stake here. The outcome in India will have global repercussions. Africa and
Latin America are fast emerging as the next frontier for the two-wheeler industry. The competitive
landscape in India will replay to some extent in many of these markets making winning in India a
critical milestone for the companies.
Sizzling India Growth

It is for all these reasons that HMSI's robust growth in India in the recent past (especially post its exit from
Hero Honda in late 2010) gains significance. Whichever way you look at it the MNC has been on a roll in India.
In 2010-11, HMSI was the fourth-largest two-wheeler company in India far behind Hero Honda (its JV with Hero
Group which came to an end in December 2010), Bajaj Auto and TVS with just 14% market share. Today it is
the second largest with a 19.8% market share.

In 2012-13, it has done even better amid slowing sales. During the year, while two-wheeler sales grew by 3%,
HMSI's sales grew 31% selling 27.5 lakh vehicles in 2012-13.

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7/25/2014 Honda kickstarts 3-year plan to beat Hero in 2-wheelers - Economic Times

"Honda has gained market share in every segment in the past 11 months," says Jitin Makkar, a senior analyst
with credit-rating agency Icra. In scooters, its market share has grown from 47.2% in April-Feb 2011-12 to
48.3% during the same period in 2012-13. In 100 cc bikes its market share has grown from 2.3% to 4.8%, in
sub-125 cc, its market share has grown from 29.1% to 31.6% and in the 150 cc segment it has doubled from
10.1% to 20% in the 11 months to February 2013.

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Readers' opinions (59)

Sort by: Newest | Oldest

SK (NCR)
02 Apr, 2013 03:26 PM
It is time for Indian companies to wake up and spend on R&D and on skilling and retaining your workers else it
is matter of time before we are slaves once again to foreign companies. India is a huge market for foriegn
companies they are here for profits and not charity. They have lots of money to invest and will buy out the
competition, HERO alaways had second garde technology from HONDA thats why the JV failed, similarly other
players. China puts screws on these companies and thus protects its industry, we are opening every thing to
them to come and kill our econmoy and make us workers.

Pramodkumar (Pune, Maharashtra)

02 Apr, 2013 08:44 AM
stronger and innovator will sustain

kasera (delhi)
01 Apr, 2013 08:09 PM
Honda is a giant company and it can very well do so.

C S Jacob (NAVI MUMBAI)

01 Apr, 2013 07:10 PM
The article avoids giving the latest numbers for Honda, Hero and Bajaj. Without these one cannot make out how
realistic Honda's claim to become No 1 by 2016 is. Will someone fill in the gaps in the article by giving the latest
vital statistics?

Kartik (Blr)
01 Apr, 2013 05:28 PM
The only player smart enough to be out of this is Yamaha, their strategy is in the 150cc bike range capacity. This
itself builds a brand. Honda is making a mistake of trying to capture 100 - 125cc bike market, they eventually will
have a confused brand i.e. Not among the top 150cc (plus) bikes.. nor in the bottom rung. Unless products have
a definite plus in terms of something new and better to offer, it will only remain a numbers game in 100-125cc
market. Only more price for better quality will certainly not help Honda. Can you innovate on a price point say
Rs50-60K? what features can you bring in for the Indian consumer?

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