Honda 2 Wheelers India to push scooter sales in rural market
CHENNAI: Scooters may be
more preferred by urban customers but market leader Honda Motorcycle & Scooter
India (HMSI) is kicking in a new strategy to push rural sales ahead of the
festival season. The company is increasing production to better capture the
rural markets, where demand is expected to rise, thanks to a good monsoon.
"Currently 28% of our total volume comes from
rural markets. Earlier, the ratio was 1 scooter to 9 motorcycles in rural
markets but now, of late, with better availability of scooters the ratio has
improved to 3:9 ," said YS Guleria, senior VP-sales and marketing, HMSI.
Honda is able to kick off this rural focus in
scooters thanks to a recent capacity addition that has allowed it to allocate
more scooters for the festival season. "We started with our scooter-only
factory in Sanand to breach the demand-supply gap in scooters and we have
brought forward the second line in that plant to hit peak capacity by end
August," said Guleria. As a result, the piling up of back orders have come
down.
"Scooters back orders are down to 18,000
starting September compared to 35,000 last year. For the first time in 10
years, Honda scooters will be available off the shelf this festival
season," he added. Typically, given the demand pile up, scooters were not
available at the last mile in rural networks. With the new capacity addition,
Honda hopes to fix that skew.
Also with a network increase of an additional
2,000 outlets in the last 3 years, HMSI is looking at a more balanced
urban-rural mix. Honda commands 59% marketshare in scooters.
The capacity ramp would mean a higher share of
scooters in Honda's overall sales mix. In the April-August period, 66% of the
company's total sales came from scooters. With the ramp up in capacity, it will
be in a position to supply enough to take that to 70% scooters.
Overall, Honda expects a more than 20% demand
growth in the festival season as well as the first 10 months of the calendar.
"We have been growing at a 22% trot in the April-August period as against
the industry growth of 12%," said Guleria.
"We should be able to maintain 20% plus
growth in the festival season and through the first 10 months. Overall we are
seeing positive momentum already. The 7th Pay Commission, OROP and good monsoon
should contribute to good growth," he said.
Source : Honda
2Wheelers India to push scooter sales in rural market