Honda to Increase Indian Production

Honda to Increase Indian Production

Honda to Increase Indian Production

It was revealed recently that Honda will enter the 100 cubic centimeter bike market in India as the Indian market takes a huge surge forward. Hondas main aim is to take on the current market leader Hero and take the place as the biggest selling manufacturer of bikes in this part of the world.

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A spokesperson for the company (and new general manager) Shinji Aoyama said that the company's strategy was set to push Hero for the top spot over the next ten years. This is a hugely ambitious strategy for the company and will test their resolve to the highest level. This strategy starts with the expansion of production in India which will push the availability of the bikes to the mass market.

This is great news for this part of the world as Honda is set for a huge investment into the country and this clearly shows they feel the Indian market is worth such a huge push. This becomes more apparent when you hear that Hero sells nearly three times as many units as Honda currently. The rough numbers show Hero selling 4.7 million units to Hondas 1.4 million units.

Hondas ambitious plans have them predicting sales growth of 27% in the next trading year which is a huge advancement on their previous years performance. It is not yet known how the company will force trade away from Hero so it will be very interesting to see the effects on the local market. Maybe a price war will ensue or maybe the quality will increase, who knows, what we only know is that it will be very interesting.

The top models in the region are the smaller entry level type models with engines from 100-125cc. This is a huge 50% of the total market and will be a tough nut to crack, at this level the consumers are heavily price sensitive and will go where the cheap deals are. Honda will need to push the fold in this area if they are to achieve mass market sales, also if they want to push their brand into the larger sized models.

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So not only will Honda have to compete on price they must also compete on range, Hero currently has numerous models in all categories that are popular with buyers. As Honda are starting from a small base they will need to push these models to market as quick as possible if they are to hit their 27% growth figures. It has not been released what timeframe Honda expects to release models as they are still setting up production capacity.

Hondas entry to this market has been brought on by their sale of its share in Hero. As they were joint owner of Hero they were not able to enter the market as it would severely hurt their current investment with Hero. As this interest no longer exists Honda are taking the huge leap into the market under their own guise.

The great news for India is that Honda are looking at investing in two huge new plants to build their factories. If the sales hit their forecasts they will look to invest further and build more locations. This will not only create more competition in the market but it will create hundreds of jobs.

Keep coming back and we will report how they are getting on. Spend a few minutes whilst you are online to Compare Bike Insurance prices and save yourself some money.

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