Hero Honda offers premium bike to perk market share

Hero Honda offerspremium bike to perk market share

New Delhi: Hero Honda Motors Ltd, which makes half the motorcycles sold in India, introduced a new 150cc bike called Hunk, in a bid to increase market share in that segment, a day before declaring its quarterly financial numbers.

Hero Honda said it expects a revival in motorcycle sales, which have dropped after banks increased auto loan rates in the festival season, which started last week. “From our own premium (bike) portfolio, we expect the highest (sales) numbers" from this model, said Pawan Munjal, managing director of the company.

Hero Honda has a 15-20% market share in this segment, which is dominated by rival Bajaj Auto Ltd’s Pulsar model. About one in every seven motorcycles sold in India’s 6.5 million a year motorcycle market is a premium motorcycle, or one powered with engines of 150cc or more.

The Hunk is Hero Honda’s fourth model in the premium segment with prices starting from Rs55,000. Bajaj Auto has said it will focus on high-end segments as it sees more growth there. Premium motorcycles contribute more to manufacturer profits, analysts say.

Hero Honda will likely say that net profit fell 12% in the second quarter ended September as raw material costs and marketing expenses dented its profit, according to an average of five analysts polled by Mint. Motorcycle sales in India fell 15.2% to 2.7 million units in the six months to September as buyers deferred purchases after lending rates rose to a five-year high.

Both Hero Honda and Bajaj are offering discounts to increase sales in this quarter.