Hero Honda readies bike to defend turf

India’s largest two-wheeler maker, Hero Honda Motors Ltd, will introduce a 100cc-plus motorcycle this year to shore up its market share after rivals Bajaj Auto Ltd and TVS Motor Co. Ltd launched new bikes in that category ahead of the festive season.

It’s “coming soon,” said Masahiro Takedagawa, president and chief executive of Honda Siel Cars India Ltd and Hero Honda board member. “There are many kinds of demand. You can have various products according to segmentation and which we should create as a manufacturer,” he added.

Japan’s Honda Motor Co. owns a 26% stake in Hero Honda and Takedagawa heads all Honda operations in South-West Asia.

Hero Honda, which launched eight new models and variants in 2006-07, last launched an all-new bike called CBZ Xtreme in October, ahead of the last festival season. “The company would not like to comment on future product launches,” said a Hero Honda spokesperson. This year, new model launches hold the key to boosting sales in a market which has seen growth declining for the past five months. In the first four months of this fiscal year, two-wheeler sales have fallen 9.18% to 2.24 million units, compared with 2.47 million units a year ago, according to data provided by the Society of Indian Automobile Manufacturers, an industry group. In the same period last year, sales grew 17.78%.

“In order to retain and maintain market share, it is important to launch new models,” said K.K. Mital, fund manager with Escorts Asset Management Co. Ltd. “People have a fancy for new models and it’s another way of creating and improving visibility.”

The country’s bike makers are lining up new model launches for the festival season, when sales traditionally spurt. The most widely celebrated Indian festivals such as Diwali and Dussehra fall in the second half of the year, as does the auspicious period for weddings, and vehicle buying is popular in this period.

Hero Honda, which sells half the motorcycles in the country, has seen rivals Bajaj and TVS try to challenge its dominance in the executive segment, which accounts for more than 40% of the motorcycles sold in India’s 6.5 million-a-year market. Hero Honda’s 10-year-old brand Splendor and its variants dominate this segment.

Both of Hero Honda’s rivals unveiled higher-powered models in this segment in the past two weeks to woo customers away from the Splendor.

Bajaj Auto on Sunday introduced a 125cc motorcycle called XCD, priced at Rs41,000, about Rs3,000 lower than the cheapest such brand of Hero Honda’s. TVS too unveiled a bike called Flame. While the firm has not announced the price of the model yet, it said the brand will help increase its market share in the executive segment.