Bangalore: Two-wheeler maker Honda Motorcycle and Scooter India Pvt. Ltd, a subsidiary of Japan’s Honda Motor Co. Ltd, on Thursday said it has turned profitable and aims to maintain 17% sales growth in 2009-10.
“Business is getting better, but our profits are not as big as our competitors like Hero Honda (Motors Ltd) or Bajaj (Auto Ltd),” Honda Motorcycle president and CEO Shinji Aoyama said after launching a new version of the CBF Stunner, a 125cc motorcycle, in Bangalore. He declined to disclose profit numbers or when the firm broke even in India.
Stiff competition:Honda Motorcycle and Scooter president and CEO Shinji Aoyama at the May launch of the CBF Stunner in Mumbai. Rajanish Kakade / AP
The maker of the Unicorn bikes and Activa scooters entered India in 2001 and has invested around Rs900 crore in the country so far. It has a factory in Manesar, Gurgaon, with an annual capacity for 1.2 million units, which it plans to raise to 1.5 million in the current fiscal year.
Aoyama said Honda Motorcycle is aiming for annual sales of 1.25 million units in 2009-10, up from 1.07 million in the previous year. In 2008-09, Honda Motorcycle’s annual sales had increased 17.58%.
“The economy has had minimal impact on our two-wheeler business,” said N.K. Rattan, operation head, sales and marketing, Honda Motorcycle. In April and May, the company registered 25% growth in sales over the previous year.
Ramnath S., director, research, at brokerage IDFC-SSKI Securities Ltd, said the two-wheeler market is expected to grow at 7-8% this year, up from a 4-6% rise in fiscal 2009, as bank finance becomes more accessible. “Several banks had reduced and even exited two-wheeler financing (over the past two years). They are going easier now,” he said, adding that firms such as Honda Motorcycle may do even better with their scooters and new models. Two-wheelers, the most popular mode of personal transport in India, sold 7.4 million units in the year ended 31 March.
India is the fifth largest two-wheeler market for Honda’s motorcycles and scooters after Indonesia, Brazil, Vietnam and Thailand, in terms of units sold. The company is growing its motorcycle business in India with more launches in the pipeline, including in the 100cc segment. In the previous fiscal year, scooter sales made up 65% of the company’s sales in India.