Hero Honda slips in Unicorn effect

DALAL STREET SPIKES

Hero Honda ended over 1 per cent lower as Honda announced direct entry into motorcycle sector. The stock was down to a low of Rs 447.95 before closing at Rs 450.35 on strong volumes of more than 4.2 lakh shares on the BSE.

The news of the product launch by Honda directly resulted in the stock losing nearly three per cent in two trading sessions to Rs 455.45 on Tuesday, from a recent low of Rs 442.80 on September 3.

Analysts said, Honda's direct entry into the two-wheeler segment will result in increased competition in the motorcycle segment. Honda Motorcycle & Scooter India, which is a 100 per cent subsidiary of Honda Motor of Japan - launched its first motorcycle, a 150 cc bike Unicorn with an ex-showroom price of Rs 50,043 in Delhi.

So far Honda's direct presence in India was restricted to scooters. For April-August 2004, Hero Honda's sales rose 34.6 per cent to 10.06 lakh units from 7.47 lakh units in the corresponding period last year.