Honda two-wheeler unit eyes expansion with Rs 8-bn investment in FY19

Honda Motorcycle and Scooter India (HMSI) plans to invest Rs 8 billion in the ongoing financial year to expand operations in the country.

The company, which posted a growth of 22 per cent in 2017-18, aims to grow in double digits in 2018-19 as well.

"We will invest close to Rs 8 billion this financial year as we aim for double-digit growth for the third consecutive year," HMSI President and CEO Minoru Kato told reporters here.

The investment would mainly go into improving efficiency at manufacturing plants, getting new tools and equipment for BS VI upgradation, and new product launches.

During 2018-19, HMSI plans to expand sales network to 6,000 touchpoints from 5,700 outlets last financial year.

"We will enhance our presence, especially in rural areas," Kato said.

The company, which is already number one contributor to parent Honda's global two-wheeler business, also plans to launch a brand new model and 18 upgrades of existing products in 2018-19 , he added.

The two-wheeler major is also targeting to expand its best dealer network to 250 outlets in the financial year. The network stood at 200 touchpoints last year.

It is also considering introducing a customer loyalty programme during the year.

On company's 2020 plans, Kato said the two-wheeler maker is set to upgrade to BS VI emission norms much before the deadline.

HMSI has started upgrading its facilities for the same, he added.

He, however, said the entire two-wheeler industry might see volumes fall post-2020 due to significant price hike in BS VI compliant products.

"It (BS VI) will, however, open up various export markets for us," HMSI Senior VP sales and marketing Y S Guleria said.

The company exports to around 27 countries, including Sri Lanka and Nepal.

Overseas shipments contribute around 5 per cent of the company's current volumes.

When asked if the company is looking to introducing electric models in the country, Kato said, "we are evaluating but there is no concrete plan yet."

In 2017-18, the company sold a total of 6.1 million units.

The company's installed capacity across its four plants stands at 6.4 million units.