Honda wary of electric tech, emission norms2 min read . Updated: 01 Jan 2018, 02:50 PM IST
Two-wheeler firm Honda Motorcycles and Scooters India says it does not have the technology for electric two-wheelers
New Delhi: India’s efforts to move to an all-electric fleet by 2030 and graduate vehicles to the stricter Bharat Stage VI (BS-VI) emission norms by 2020 have put the local two-wheeler unit of Honda Motor Co. in a spot of bother.
Honda Motorcycles and Scooters India Pvt. Ltd does not have the technology for electric two-wheelers, president and chief executive Minoru Kato said in an interview, adding that the policy-driven push to graduate to BS-VI norms, the toughest in the world, will increase two-wheeler costs, leading to an overall decline in sales.
“Basically we don’t have a success story (on the electric vehicle front) unfortunately. Honda has been developing electric motorcycles for more than 20 years. In Japan, we launched electric in the past but they don’t exist anymore," said Kato, a Honda veteran who has served in countries such as Thailand, Vietnam and the UK. India is now Honda’s largest market for two-wheelers in the world.
The company does not have any plans to bring electric vehicles to India as it is very difficult to meet customer expectations, Kato added.
“Still we have time and honestly speaking we don’t have electric battery technology and we need to rely on the battery suppliers," Kato said, adding that the battery suppliers will have to dramatically improve their technology and reduce the size of their batteries as there is only so much space to fit those packs.
Honda has more than doubled its market share since 2010 to 29% in the Indian market and now threatens to dethrone its former joint venture partner Hero MotoCorp Ltd from the position of being India’s largest two-wheeler company. Since Hero and Honda have parted ways, Hero’s market share has declined to 37% from 45% in 2010. Honda takes credit for making a dent in Hero’s share of the market by revolutionising the scooter segment, which in the beginning was an urban phenomenon but now it has started to make inroads into rural India—Hero’s stronghold.
But, if the two-wheeler market shifts towards the electric technology, as the Society of Indian Automobile Manufactures (Siam) has envisaged, Hero seems to have an advantage. Hero MotoCorp has already invested in Ather Energy—a Bangalore-based start-up—for making electric two-wheelers.
Kato said it is easier to introduce electric two-wheelers in the commuter segment in developed countries because their daily use is very limited. In contrast, the daily commuting distances are longer in developing countries such as Thailand, Vietnam and India, making the battery range key for the success of electric two-wheelers.
As of now, Honda is leading its former alliance partner Hero MotoCorp in 15 out of 29 states in terms of total two-wheeler sales. Consequently, the four manufacturing plants of the company are running at 99% capacity utilisation. While Honda Motorcycles plans to establish a fifth manufacturing facility in the long term, meeting the BS-VI emission norms is a more immediate concern.
“We are considering a fifth manufacturing unit but adhering to BS-VI emission norms by 2020 is the biggest concern. Not only Honda, other manufacturers will also have to comply with the norms, so production cost will increase. Hence we need to increase price as well. So the total motorcycle industry will decrease in 2020," said Kato.