Japanese auto major Honda has its feet firmly entrenched in the Indian two wheeler market, thanks to a wave of scooterisation. The second biggest two wheeler company in India, Honda Motorcycle and Scooter India (HMSI), commands a fifty-seven per cent share in fast growing domestic scooter market. Minoru Kato, President & chief executive officer at HMSI, tells Ajay Modi and T E Narasimhan that semi-urban markets will bring the next phase of growth in India. Kato raises concerns around rising road congestion in cities and non adherence to safe driving rules. You are close to completing one year as India chief. What is your reading of the Indian market? These ten months have been very much exciting. I can recognise that there is a greater potential to expand further, especially in rural areas. On the other hand, in the big cities the motorcycle industry may mature in the future. But, India is a huge market and different trends keep emerging. We can expect more female customers from both cities and rural areas going forward. Does it mean your next big growth will come from outside urban markets? Can these markets take more scooters? I think so. The semi-urban markets have got a high potential. Many customers who already use a motorcycle want a scooter when they look for an additional vehicle for the family. Scooter is more flexible, comfortable for everyone, including the female members. How are planning to expand in these markets? Basically, we are going to expand our sales and service network in the semi-urban markets. We have a lot of open areas. Besides this, we launched the Cliq last year, a new scooter specific for the semi-urban markets. This is not only priced reasonably but is also easy to ride and has a loading capacity. Scooters currently contribute to one third of the total domestic two wheeler market and it continues to grow. Do you see it going up to 40-45 per cent of the total two wheeler demand? I think so. Not only for us, the competitors are also thinking about that. That is why many new models are getting launched into this category.
We welcome more scooters and a healthy competition.
You sit on a high market share of 57 per cent in scooters. Will it be possible to retain such a share going forward as competition turns aggressive? I don’t care about the market share. We want to focus on customer demand, to expand their joy of riding and so on. We will focus on continuous improvement in our products and also on addition of latest features as you can see in Activa 5G. Some customers, thanks to competitors’ new products, shift to scooters and then they recognise the benefit of a scooter. Once that happens, Honda will be the eventual choice. India is your largest market in terms of volume. Is there a scope to have a higher share from this market? At present, about 31 per cent of Honda’s global two wheeler volume is from India. With Indonesian market going down and our contribution going up, we could have a higher share. But this is uncontrollable and unpredictable. We are going to focus on our sales and take care of our customers in India. We don't care about the total contribution to Honda. With the kind of growth you are witnessing, will you face capacity constraints and is there any need to expand? We are very much comfortable now. We always think about the next investments, but it is still under consideration and as of now no news there. Any concerns or challenges do you see in the Indian market for the two-wheeler segment? The biggest challenge for us is Bharat Stage VI fuel emission norms that comes into effect from April 2020. We have eleven production lines, more than ten models and it is a big challenge for us to shift to BS-VI. However, we remain confident of meeting deadline. In the big cities traffic situation is getting worse and accidents are increasing. That is one of the concerns. You can see so many customers driving without helmets. We want to promote safe driving.
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