Honda narrows the gap with Hero in volume sweepstake with just

Japanese two-wheeler maker Honda is not far away to dethrone its previous partner Hero Motorcorp as the No 1 player in the domestic market if the April volumes are any indication as the current No 2 has narrowed the gap with the market leader for decades to just 12,134 units.

Hitting a sixer in the volume sweepstake in April at 6,81,888 units, which is up 18 per cent over the same month in 2017, Honda Motorcycle & Scooter India has steeply narrowed the gap with Hero which sold 6,94,022 units in the month, which is an addition of 16.5 per cent more customers and thus narrowing the gap to just 12,134 units.

For, Honda, the 6-lakh units milestone comes exactly a year after it had crossed the 5 lakh mark last April and of the total April volume domestic sales grew 15 per cent to 6,35,811 units.

But in the total volumes the gap is still too large; Hero closed FY18 with 7.5 million units up from 6.66 million in FY17 while Honda closed the year with 6.1 million, up from a little over 5.01 million in the previous fiscal. Hero has set 10 million volume target for FY20.

This means that the sales gap that Honda has with Hero is too close. Given the momentum that the Japanese company has gained in the past many years, it seems that a month is not very far away when Honda may overtake Hero, says an auto analyst who asked not to be named.

But he was quick to add that Honda will not be able to lead the market for the full year given its capacity constraint, which is only 6.4 million units per annum at its 11 assembly lines, while Hero has a huge lead in this with 9.2 million installed capacity.

However he further said the gap may continue narrow as Hondas bikes sales are also vrooming, driven by the CB Shine.

In March, Hero began its eighth plant (in Andhras Chittoor district) which will have an annual capacity of 1.8 million units at a cost of Rs 1,600 crore. On completion, this will take the total capacity to 11 million by December 2019.

When asked are you on course to become the largest player, Honda senior vice-president for sales & marketing Yadvinder Singh Guleria told PTI "we just dont have the capacity. Even if we decide to add a new assembly line, it will take at least two years to go on-stream. So the question doesnt arise as of now."