Kinetic Honda, Hero To Have Same Vendors

Japanese automaker Honda Motor Co Ltd has decided to synergise the operations of its two two-wheeler joint ventures in the country - Hero Honda and Kinetic Honda - by setting up a common vendor network.

This will be done to co-ordinate between the supply of components from Japan to the two companies, even while there remains a strict product differentiation between the two.

This was disclosed by Minoru Harada, who is a director on the board of Honda Motor and oversees the Indian operations in his capacity as the chief operating officer for the Asia & Oceania region.

Harada also stated that Honda will continue to keep the product lines of Hero Honda and Kinetic Honda distinct.

 

While Hero Honda, the joint venture between the Japanese auto major and the Munjals, will introduce motorcycles of different sizes and models, from the Honda stable, the Japanese major plans to launch all its scooter models in the country through its other joint venture company.

Harada was speaking to Business Standard after a press conference in the capital yesterday which was addressed by Nobuhiko Kawamoto, president and chief executive officer of Honda Motor.

Nobuhiko categorically stated that no change in the equity shareholding pattern was on the cards in any of its joint ventures in the country. The $44-billion automaker currently holds 26 per cent equity in Hero Honda, 51 per cent in Kinetic Honda, about 33 per cent in the genset manufacturer Shriram Honda, and 90 per cent in its car joint venture with Siel.

Nobuhiko stated that Honda would depend on three main strategies in the country - good products, cheap prices, and correct timing of their launch. "India is at a take-off stage, and we are taking a long term view of the economy".

With specific reference to Honda's plans in the domestic passenger car segment, he added: "We are not in a hurry. India is an ultra big country".

Honda will mark its entry in the domestic passenger car market with the proposed launch of the 1.3 litre "Honda City", a modified version of the popular Civic, in November this year.

This will be manufactured at the plant being set up by Honda Siel at Greater Noida with an installed capacity of around 300,000 cars per year. The company plans to sell about 4000 cars in the first four months of launch.

Nobuhiko projected the car market in the country to double from the current 400,000 level in three years by the turn of the century. This would be matched by Honda which will invest about Rs 800 crore in five years in its car venture.

"We will have five factories in operation in the country by the end of this year" he said of all its four joint ventures, adding that the company would introduce new products and models according to market demand.

Nobuhiko was in the capital for the inauguration of Hero Honda's Rs 172 crore state-of-the-art plant at Gurgaon yesterday. The new plant will have an initial annual manufacturing capacity of 100,000 motorcycles of the newly launched 4-stroke 100 cc motorcycle "Street".

Hero Honda is currently conducting a market survey for four different product categories of motorcycles - in the 125cc, 150cc, 175cc, 200cc, and the above 200cc ranges.