In what has intensified the battle in the domestic two-wheeler market, Hero MotoCorp Ltd, the country's largest two-wheeler maker, is boosting sales of scooters, a forte of its former partner, Honda Motorcycle and Scooter India Pvt Ltd (HMSI), even as the latter is making fast inroads into the motorcycle market.
Quarter-wise data released by the industry body, Society of Indian Automobile Manufacturers, shows while Hero's market share in scooters increased to 20.6 per cent in the December quarter from 15.9 per cent in the June quarter, HMSI's share in the category slipped by nearly eight percentage points to 44.9 per cent in the same period.
In January this year, while Hero increased its share to 21.3 per cent in the scooter market, HMSI's dipped further to 43.93 per cent. HMSI has been registering a drop in scooter sales since November last year. But Yadvinder Singh Guleria, vice-president (sales and marketing), HMSI, explained the decline in sales was purely on account of production constraints.
"Our factories are running at full capacity. There is no let up in demand for Honda scooters. In fact, our bookings have increased by 20 per cent from 55,000 in late December after the introduction of Honda Eco Technology engines in the models," Guleria said.
HMSI has two factories in India -" one in Manesar, Haryana, and the other in Tapukara, Rajasthan. Currently, the company has a combined order backlog of 70,000 units for the Activa, Dio and Aviator.
At Hero, sales of scooters have increased by a strong 33 per cent between April and January this financial year. "After five years of having only the Pleasure in our (scooter) portfolio, we launched the Maestro last year. Since then, our volumes have nearly doubled to 55,000 units per month from 30,000 units earlier," said Anil Dua, senior vice-president (sales and marketing), Hero. "We are limited by capacity and are now working on increasing production to 60,000 scooters every month from the 40,000 units we produced a year earlier."
Hero is looking at acquiring a quarter of market share in scooter sales in the country. Dua said it was likely that the company would clock sales of of 100,000 scooters every month-"numbers close to those being reported by HMSI at present.
Meanwhile, to increase its footprint in the motorcycle market, HMSI has been working closely with engineers from its parent company at its technical centre in Manesar, Haryana. It aims to introduce one new product every quarter in the Indian market.
Guleria said: "The technical centre is not only working on a low-cost bike and new products, its overall objective is to improve quality and work with vendors to source more locally."
HMSI overtook Hero in sales of premium bikes in the 125-150cc segment in May last year. HMSI sold 190,790 units in the category till January this financial year, an increase of nearly 60 per cent over the 119,279 units it sold in the last corresponding period. Hero's sales in the segment crashed 43 per cent to 128,948 units in the same period.
Hero, however, continues to be the market leader in the 75 to 110cc segment (which still accounts for nearly 65 per cent motorcycle sales in the country). Hero has a share of 69 per cent in the category with best sellers like the Splendor and the Passion. HMSI has introduced Dream Yuga in May last year, which has helped the company double sales and market share in the segment to 4.7 per cent. But the company has a long way to go to scale presence in the category.
To close the gap with the market leader, HMSI has said it will introduce "core products" at aggressive price points to increase consumer base in the country. It has targeted sales of 10 million units by 2020 and might set up seven-eight facilities to expand production capacity over the next few years. Hero has already announced its intention to have $10 billion (Rs 54,590 crore) turnover in the next five years with sales of 10 million units.