Honda Motorcycle lines up Rs.800 crore investment
Gearing up for expansion of the production capacity and BS-VI norms, Honda Motorcycle and Scooter India (HMSI) on Tuesday announced an investment of Rs 800 crore in the current financial year.
India contributes to 30% to Honda’s global sales, which recorded a growth of 22% in 2017-18 in the country and expects to grow in double-digits this fiscal also, HMSI president and CEO Minoru Kato said.
The company expects to upgrade to BS-VI emission norms much before the deadline of 2020 and has already started upgrading its facilities. Though, the two-wheeler industry might see volumes fall post-2020 due to significant price hike due to BS-VI compliant products.
“India is already the number one contributor to Honda’s global two-wheeler business. Our record sales have set a solid foundation in 2017-18 and we will further consolidate its position in 2018-19 as we get ready to lead the biggest paradigm shift of 2020. We will invest about to Rs 800 crore this financial year as we aim for double-digit growth for the third consecutive year,” he said.
The investment will also be used towards new product launches. HMSI also plans to expand its sales network to 6,000 touch points from 5,700 outlets last fiscal and expand in rural areas as well, he said. Besides, a customer loyalty programme will also be introduced during this fiscal.
Talking about new launches, Kato said a brand new model will be launched this year, apart from 18 upgrades of existing products.
“We have added one million-plus incremental customers in a single year. Led by strong demand in both domestic and exports front, Honda’s sales stood at 6,123,886 units with 22% growth. We successfully consolidated leadership further in scooter segment while aggressively gaining new motorcycle customers,” HMSI senior vice president - sales and marketing Y S Guleria said.
BS-VI will open up various export markets for us, Guleria said. Currently, the company exports to around 27 countries, including Sri Lanka and Nepal while overseas shipments contribute around 5% of the company’s current volumes.
On introduction of new electric vehicles, Kato said, “We are evaluating but there is no concrete plan yet.”
Source: DNA Money