Honda expects strong double-digit sales growth in FY19

India’s second largest two-wheeler maker Honda Motorcycle and Scooter India (HMSI) expects to clock a strong double-digit growth in sales during the current fiscal, which will be backed by a robust demand from the rural and semi-urban markets.

The company registered a record 22% growth in sales at 6.1 million units during the fiscal ended March 2018. Of this, 5.75 million two-wheelers were sold in the domestic market and the rest were exported. During the current fiscal, it is looking at achieving a double digit growth in domestic sales as well as exports, Minoru Kato, President and CEO, HMSI said on Friday.

HMSI is witnessing a strong demand for its scooters and the share of scooters will be in the range of 66-67% and the rest will be motorcycles, he said.

The company plans to launch a brand new two-wheeler towards the end of FY19 as well as upgrade all its existing vehicles to push sales. “The company is planning to increase production in all the existing manufacturing plants to cater to the new demand. The rural demand is very robust and the upcoming festival season will further trigger sales boom,” Kato told DH.

In Karnataka, the company has 39% market share, while in Bengaluru, its share is 46%. Incidentally, it sold its first scooter in Bengaluru way back in 2001. Since then, it has cumulatively sold 38 million two-wheelers in India. The next 38 million unit sales will come in much lesser duration, Kato said.

He said the company has not yet taken any decision on setting up its fifth manufacturing plant. The new two-wheeler will be launched towards the end of 2018-19, he said without giving the timeline.

Recently, HMSI launched upgraded versions of its most popular scooter Activa and Aviator.

HMSI has also announced an investment of Rs 800 crore during the current fiscal to modernise its plants and improve efficiencies, revamp existing products, launch new products and upgrade to BS-VI emission norms by 2020.

Currently, Honda operates four manufacturing plants in Gurugram, Tapukara in Rajasthan, Vithalapur in Gujarat and Narasapura in Karnataka, which is also its largest facility.

Kato said the main concern for the company currently is to upgrade its factories to comply with the BS-VI emission standards. "We are ready with the new technology. However, all our suppliers need to invest in their factories to meet our requirements. Our vehicles will all be fitted with new technology features such as fuel injection, ABS, special tyres and child lock, among others," Kato said.

HMSI is also looking at increasing exports of its two-wheelers. Its hybrid vehicle Navi is exported to Latin America.