Honda to have a vivid identity for its 110cc
There wont be any clash of the titans – Hero Honda and Hero Motorcycle &Scooter India, over the launch of new 110cc bike. Splendor and Passion will continue to run on the separate identity from Hero Honda, while HMSI will deliver the new 110cc on its own. HMSI possesses 26% share in Hero Honda and the new brand will be a niche targeted at the youth.The new 110 cc will cost 10% more than Passion Pro (Rs44000) and Splendor (Rs39,250). Hero Honda still remains the torch bearer in the global motorbike industry and the apex body in Japan is shying away to collapse the momentum, by making the new bike as a joint venture between the sister companies.
The existing agreement will continue till 2014, when the contract period might cease.Auto industry analysts predicted that any JV between these two companies will end up with cannibalization. Hence the bike is intended to be a stylish one rather than the commuting vehicle, in addition to better mileage. The 110cc bike from HMSI will be a unique one in that it will fascinate the young minds, said its official.The advantage for the two companies is that the component segment are similar for both these entry-level segments.
Hero Honda had a good run amidst the economy downfall and Honda is too repulsive to retain the momentum in the global share. Thus, the event of fragmenting Hero from the umbrella of Honda will be a litmus test, said the CEO of Honda Siel Cars India.Hero Honda Splendor is the largest selling bike in the world, with one million units in this year itself and Passion too contributed a substantial sale volume to accrue 50-60% market share among 3-4million units sold globally.
On the other side, HMSI received a reaping sale of 400000 motorcycles annually with its scooter share comprising 60% of its net volume of 1.2million units. The motorcycle market has a potential of 7 million units a year of which Hero Honda dominates. So it is natural for HMSI to enfold the greater volume and is not in a mood to give way for the staunch rivals like Bajaj and TVS.