Honda India's dealership expansion intensifies premium bike competition in challenging auto market

18, Feb. 2021

From left, Yuichiro Ishii, director, sales and marketing, HMSI; Atsushi Ogata, managing director, president and CEO, HMSI; and Yadvinder Singh Guleria, director of sales and marketing, HMSI, (Photo coat the global premiere of Honda's new CB350RS on Feb. 16, 2021. (Photo courtesy of HMSI)
From left, Yuichiro Ishii, director, sales and marketing, HMSI; Atsushi Ogata, managing director, president and CEO, HMSI; and Yadvinder Singh Guleria, director of sales and marketing, HMSI, (Photo coat the global premiere of Honda's new CB350RS on Feb. 16, 2021. (Photo courtesy of HMSI)

By Atul Ranjan and Celine Chen

NEW DELHI, NNA - Betting big on its premium motorcycles, Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI), is set to expand the number of its premium bike dealerships to drive its sales in the country, despite a cautious outlook for the pandemic-hit Indian auto industry.

HMSI, the subsidiary of Japan’s Honda Motor Co., is speeding up the pace of increasing the number of BigWing outlets to over 50 by the end of next month (March).

The move is likely to escalate competition in the middleweight bike category especially after Hero MotoCorp allied with America's Harley-Davidson for its expansion strategy.

HMSI had announced the creation of a big bike division-- Honda BigWing--in April 2019 for the niche premium market, but expansion plans were hampered by the severe nationwide lockdown in April and May last year to contain the pandemic and its ensuing aftermath.

By the end of this February, the automaker would have 35 BigWing outlets opened, up from the current 23, a company official told NNA.

On Tuesday, Yadvinder Singh Guleria, director of sales and marketing at HMSI, said during a virtual conference for the global premier of its new premium mid-weight bike CB350RS, “Thanks to the great efforts made by our team on the ground including very good support in terms of minimizing the development time by our business partners, we’ll be able to have a 50-plus network by the end of March 31, 2021.”

Atsushi Ogata, managing director, president and CEO of HMSI, said the company is not only targeting big cities, but also rural areas which are witnessing a rise in income levels.

The company, India’s second largest two-wheeler maker, will price the mid-sized, Indian-made CB350RS at 196,000 rupees. Bookings have started and delivery of the bikes will start in March.

Ogata said while India is the company’s priority market, it will explore the possibility of exporting the bike to other countries in future.

The company, which is running its plants at full capacity, had said last year that it was planning to expand mass production of select big bikes in India.

BigWing retail outlets offer a complete range of Honda’s premium motorcycles. They include H’ness CB350, 2020 CBR1000RR-R Fireblade, 2020 CBR1000RR-R Fireblade SP and adventure tourer 2020 Africa Twin Adventure Sports.

HMSI declined to disclose sales targets for the CB350RS but said that its predecessor CB350 H’ness sold more than 10,000 units in three months after its launch.

Featuring retro-styling, both bikes are believed to be positioned as a rival to India's Royal Enfield bikes. While the H'ness features more chrome, the RS features more elements in black, which makes it look more 'premium'.

Their competitor in the premium middleweight segment is Hero MotoCorp whose alliance with American motorcycle maker Harley-Davidson is likely to strengthen its position.

While HMSI is going ahead with its expansion plan in the country and running its production plants at full capacity, it is remaining cautiously optimistic.

Ogata said, “We need to watch carefully. We have to make a precise plan, region by region, village to village. We need to have a more linear control of production and supply. We have an optimistic idea of 2021, but we should be cautious. But there are many more launches that Honda would be doing in 2021."

From April last year to January this year, HMSI domestic sales tumbled 26 percent to 3.06 million units.

According to the Society of Indian Automobile Manufacturers (SIAM), two-wheeler wholesales plunged by 20.05 percent amid the pandemic to over 12 million units sold in the first 10 months of the current fiscal year which ends in March.

Retail sales in January fell by 8.78 percent from a year ago, noted the Federation of Automobile Dealers Associations (FADA). The recent price hike undertaken by original producers of auto parts has made bikes more expensive for buyers, said Vinkesh Gulati, president of FADA.

SIAM reiterated that the country’s auto industry had been caught in headwinds even before the COVID-19 pandemic slammed the sector hard last year. It added that recovery will take time.

Retail sales of passenger vehicles for January 2021 fell 4.46 percent from a year ago to 281,666 units, according to FADA. However, the latest figures were up by 3.82 percent from December 2020, bringing hopes for a recovery.

On the January performance, Gulati of FADA said, “After witnessing a one-off growth in December, January auto registrations fell once again by minus 10 percent year on year. Auto industry clearly misjudged the demand which returned post lockdown. Industry’s underestimation of post-Covid rebound along with chipmakers prioritizing higher-volume and more lucrative consumer electronics market has created a vacuum for semiconductors. This has resulted in a shortage in supply for all categories of vehicles especially passenger vehicles even though enquiry levels and bookings remained high.”

However, there are positive signs seen in new launches and SUVs which "continued to see high traction and helped in restricting the overall PV registrations to fall by a bigger margin," he said.