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This Information The Rise of Honda, Read More

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This Information The Rise of Honda, Read More

Honda (Honda Motorcycles and Scooters India) looks all poised to take off in a big way in India now..

In 1981 there was a so called "Honda-Yamaha War" in which the two motorcycle giants fought for the title of the biggest 2 wheeler maker of the world. The "war" was initially started by Yamaha. What happened in the next 18 months is the stuff of legends.

Honda launched/replaced 113 models and Yamaha could manage just 37 (both had around 60 models when the "war" started). Apart from new models Honda went on the offensive to launch new technologies and aggressive distribution systems. Ultimately Yamaha had to make a public "Surrender"..!!

Learning from the above incident is loud and clear. Messing with Honda can be a messy affair.

In stark contrast to the famous "Honda Yamaha War", Honda's approach in India (HMSI) has been quite slow but steady. As evident from the graphic posted below, Honda in 2011-12 has increased their market share (in motorcycles) to around 7.6 % from a market share of 3.5 % in 2005-06.

So what's the secret of the rise of Honda in India?

When launched I did not have much expectation from either the Unicorn or the Shine, on the other hand I really thought that the 125 cc CBF Stunner had potential to become a best seller. But the market seems to have a mind of its own and in course of time the decent sales of both the Unicorn and the Shine and the non-performance of the CBF Stunner have proven me wrong.
So is it time for an "Indian-Honda War"..??
The learning is that the dots can be joined only when looking backwards. Even the best researcher can never predict of what would be the fate of a particular model or the state of the market after a few years.

Lets try to join the dots for HMSI by looking backwards in time and try to understand what has worked for it so far:

1. Lucky to have struck gold with the Activa Scooter: The Activa Scooter has went on to become a big brand (and the undisputed leader in the automatic scooter segment) and it was the model which gave HMSI the much needed oxygen in the initial years in the form of sales numbers. The Eterno (geared four stroke scooter) was on the other hand a flop and had to be ceased.

2. Hero established the Honda name in India: Hero maintained high standards of quality and reliability of it co-branded products and made Honda a household name for more than two decades in India.

3. Continuity of products: The middle class Indian concumer, the one whose buying decision is governed more by his head rather than his heart appreciates continuity/no change in model/engine. The first motorcycles from HMSI for India i.e the 150 cc Unicorn and 125 cc Shine hasn't still changed much.

This tactic of continuity might work for brands like Honda but not for everyone. For example Yamaha still has been selling its 100 cc Crux in the same form for many years now without any visible success.

4. Production constraint played to Honda's benefit: Not till a couple of months back Honda did not have enough production capability. This resulted in imbalance with the "demand-supply" of its models resulting in a waiting list as long as 7-8 months for its models. Due to this, among common people it appeared that Honda bikes/scooters have unusually high demand. Which in turn helped to create the halo around the Honda brand.

Will Honda become the Biggest 2 Wheeler brand in India eventually?:

Honda has already overtaken TVS Motor. Now to become the biggest in India, Honda will have to overtake Bajaj and Hero. With new models like the 110 cc Dream Yuga and 150 cc CBR150R, the lineup seems almost complete for the time being. The recent spate of TV commercials for the CB Shine (Aacha Lagta Hai - Campaign), Dream Yuga (Sach Kar Denge Sapne - Campaign) and CBR150R (Taste First Blood - Campaign) suggest that Honda is slowly getting serious and aggressive.

So is it time for an "Indian - Honda War"..??

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