We will continue to expand our rural network: Honda Motorcycles’ Minoru Kato

New Delhi: Honda Motorcycles and Scooter India Ltd (HMSI)’s scooter business has been a resounding success in India and has helped the Japanese company emerge as the second largest two-wheeler maker in the country, but its motorcycle business continues to be a concern.

In an interview on the sidelines of the 2018 Auto Expo in New Delhi, Minoru Kato, president and chief executive of HMSI, said the company’s new X-Blade motorcycle will be positioned between the Unicorn 160 and the Hornet 160 models and that the company will continue to invest in economy segment motorcycles despite declining volumes. Edited excerpts:

How has the experience of the Auto Expo been so far, since it is your first?

Very exciting so far, but we haven’t met our future customers yet and got their feedback.

Your new motorcycle, having an engine capacity of 160cc, will compete with the Bajaj Pulsar. In terms of technological innovation and design, how is Honda taking it to the next level?

Fuel efficiency and mileage have been improved with the help of LED headlamps, which will benefit the customer. This also gives us the freedom to bring about a new cosmetic design around the headlamp.

With the new launch today, what are the sales expectations?

Basically, this positioning between the Hornet and the Unicorn will bring us more customers. So we expect a better future in this segment. The sales of 100cc and 110cc have been slightly decreasing while bikes with higher cubic capacities have seen higher sales; therefore, we also expect greater sales.

Your market share in motorcycles is around 16%. This is a product where some of your competitors are better positioned, so how will you try to gain more customers with this product proposition?

For example, engine character. The one in this bike is a little more practical and convenient and will focus on a more practical area than the Hornet. A compact size and cosmetic changes will also help. We want to focus not only on young customers, but essentially those left in the gap between the Unicorn 160 and the Hornet 160. The Hornet is a little less practical for city driving at the moment.

We want it to be not only a sporty ride, but also a comfortable one for city usage.

This bike will be launched in March, so what can we expect from HMSI in the motorcycle segment?

At this moment, we are going to start delivering this bike in March. Therefore, we must focus on promoting this model in the next fiscal year.

Coming to scooters, your Activa is already a market leader. What are some of the changes we can see in the Activa 5G you’ve launched today?

From a technology point of view, thanks to the LED headlamps, there is more benefit for the customer. The ride is more comfortable for the customer, like the Grazia. Many customers who have already bought the Activa want to upgrade to a better Activa. In order to meet those expectations, we need to improve step-by-step.

What new launches can we expect from Honda in the next fiscal year?

Honestly speaking, with the BS-VI (Bharat Stage VI) norms coming soon, we have started a BS-VI project. The next completely new model will be seen only after two years, after the norms kick in. Till then, we will see upgrades with minor changes. The next big change will be on BS-VI.

How will the economy motorcycles segment do, because a large chunk of those customers have moved on to scooters? What is the future of the 110cc segment?

As you know, this segment has been slightly declining but it still accounts for the largest share of volumes. So we would like to focus on this segment as well, even after BS-VI. We must cater to customers in this segment.

But if you’re saying that we will not see any new products till 2020, are you hopeful of increasing your market share in motorcycles?

We are going to continue to expand our sales and service network in rural areas, so that will increase market share there with existing motorcycles.

What share of scooter sales comes from rural and semi-urban areas and how has that changed? One of the trends we have seen in the past two years is increased sales of scooters in rural areas. The rural market is a Hero bastion.

Many manufacturers will focus on scooters because the growth there is increasing. We expect sales not only from rural areas, but also from women riders as infrastructure improves. It’s difficult to define areas as rural or semi-urban.