The Japanese two wheeler giant, Honda, is riding a top gear ever since its entry and in India, the company has a good niche with Hero group, to lead not only the roads but also the market. Now, the company is on the verge of entering the roads with its own flag through Honda Motorcycle and Scooters India Ltd. The makes will be in 100cc -150cc bikes and some scooters as Hero Honda, a joint venture with Honda’s 26% right now in the motorcycle sector. Of late there has been news in the air about the departing of Honda from the Hero group to make the individual run. But the rumors became nullified with the clear indication from the CEO of Honda about the continued JV between the companies.
The JV will launch new bikes in the 100cc next year followed by new models. Honda Motorcycle and Scooter Ltd has 18% of the market share while Hero Honda has 47%, the proposed cannibalization is directed towards the overall gain for Honda, said the CEO. The yearly revision of strategies include this cannibalization. HMSIL seeks to increase its share of 18% to 36% by nearing 12.5 lakh units from the current 10.7 lakh units. By March 2010, the production capacity is to increase to 15 lakh / year with an investment of Rs360crore at Manesar plant. In 2010-11 there will be further investment of Rs404.4 crore, after which there will be an entirely new plant for further expansions @Rs300 crore for every 1 lakh units.