HMSI is looking at 18 per cent growth in its two-wheeler sales in the next fiscal.

Japanese two-wheeler major, Honda, today said it would exit the geared scooter market in India and phase out its 150 cc model — Eterno — as the company planned to focus on the gearless segment.

“We will stop producing Eterno. We will not stay in this segment (geared scooter). Eterno will be phased out,” HMSI President and CEO Shinji Aoyama told reporters here.

The company would focus on gearless scooters in the future and with the launch of the new Activa, HMSI is looking at a total of 18 per cent growth in its two-wheeler sales in the next fiscal, 2009-10.

Eterno was selling only about 40,000 units a year, which was a very small number, Aoyama said.

Asked if the company would bring in a new model to fill the vacuum after the withdrawal of Eterno from the market, Aoyama said: “We will surely compensate with a substitute, but at the moment the new Activa is enough to take the challenge, as it will give 15 per cent increased mileage.”

Besides, HMSI is hoping to record 17 per cent growth in the current financial year, with a total sales of 1.06 million units.

“The Indian two-wheeler market witnessed a growth of 5 per cent in the current fiscal, whereas HMSI grew about 17 per cent in the same period and we expect to keep this momentum,” Aoyama said.

“For the next fiscal, 2009-10, we have set a sales target of 1.25 million units in the Indian market, of which 740,000 will be scooters and 510,000 will be motorcycles,” Aoyama said.

Talking about the new 110cc Activa, Aoyama said the company had developed the model keeping in mind the changing needs of Indian customers.

“We are aiming at a further expansion of the scooter market with the new Activa and have set a challenging plan to sell 550,000 units in 2009-10,” HMSI Head (Sales and Marketing) N K Rattan said.

Rattan said the company would add 100 new outlets in the next fiscal to take the total to 750.

Earlier HMSI had said it would invest Rs 300 crore in the next three years for expanding its production capacities, besides launching new models.

The company, which has a production facility at Manesar, has so far invested Rs 900 crore in the country.

HMSI has also plans to introduce a 100cc bike targeting the mass market within the next one year, which will be targeted at young customers, Aoyama said.

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