Honda Motorcycle and Scooter India (Honda), the third-largest two-wheeler producer in the country, is challenging Bajaj Auto in its own backyard.
The Indian subsidiary of the Japanese giant Honda has increasingly wiped out the gap between itself and Bajaj in the motorcycles, a category fiercely guarded by the Pune-based company.
Bajaj is the second-largest seller of motorcycles in the market after leader Hero MotoCorp. Bajaj's Pulsar and Discover are the crowd-pullers, while Honda has bestsellers like Shine, CB Twister and the Dream Yuga.
With a consistent drop in sales of Bajaj, especially of the Discover brand, and a sustained increase in demand for Honda's bikes following the launch of new products in the economy category, the gap between the two rivals narrowed down to under 7,000 units in August from more than 150,000 units in October last year (see table).
In 2012-2013, Honda overtook Bajaj to become the second-largest two-wheeler seller in the domestic market. Honda sold 2.60 million units in India last financial year compared to 2.46 million units sold by Bajaj.
However, little more than 54 per cent (1.42 million units) of the sales for Honda came from scooters, a segment totally untapped by Bajaj after it stopped producing its ungeared scooter Kristal late in 2009.
Honda, which grew on the success of the automatic scooter Activa, meanwhile strengthened its presence in the motorcycle segment over the last one year. The Delhi-based company launched the Dream Neo and Dream Yuga bikes in the economy segment (of 75-110cc).
The segment commands 64 per cent of the total motorcycle market. Last year, economy motorcycles sold 6.48 million units in the domestic market as against the segment total of 10 million units.
Honda has 10 motorcycle models (upto 250cc), while Bajaj has 12 motorcycle models across four brands.
Yadvinder Singh Guleria, vice- president - sales & marketing, Honda Motorcycle & Scooter India says, "We remained unrepresented in about 48 per cent of the market which is the mass segment. It is only 18 months since we debuted in this segment. With the Dream series we are poised to expand out footprint, increase our network in rural and semi-urban India."
Honda is confident of growing its sales consistently from here with not just new model launches and through deeper network penetration in the hinterlands but by taking full advantage of the strong brand pull of Honda.
"Definitely (the economy) segment is far more challenging because of the presence of competition. It has been there for many years. There is a big market and a lot of room available for Honda to expand. There are several people who have been expecting something from Honda to come in this segment. We are only meeting their expectations. We are not fully represented in the rural areas yet", adds Guleria.
Honda's network is only 40 per cent of that of the competitors. The company has 2,150 dealerships as of August, compared to more than 5,500 of Hero MotoCorp, India's largest manufacturer of two-wheelers.
However, the Rajiv Bajaj-led company, whose Pulsar brand has been the market leader in the premium segment (150cc-250cc) for many years, is not sitting quiet and is gearing up for a full frontal assault on competition. The company is readying the launch of six models under the Discover brand over the next six months, till March. The first of the launches will take place this month.
The company had been cutting back on stocks of some of the existing models of Discover at dealers in the last few months to make way for the new models. Presently there are five models on sale under Discover, 100cc (two models) and 125cc (three models) engines.
The first of the new Discover models is already under production and the company is ramping up output with each passing day. Riding on the supply of the new Discover and increased delivery of other models in September, Bajaj widened the gap with Honda.
Bajaj sold 202,310 motorcycles last month, 51,503 units more than Honda. The inventory build-up and the new range of Discovers are aimed at the festive period due to begin this weekend.
Rajiv Bajaj, managing director, Bajaj Auto says, "We have often said in the last two months, (that we have) been targeting a reduction in dealer stock, particularly of the Discovers, since the new Discovers are to be launched early next month onwards. Hence, the volume gap between Honda and Bajaj at the retail level continues to be large."
Besides the six Discovers, Bajaj is also gearing up to launch its most powerful bike yet. The Pulsar 375 will debut before the end of the year and will be much more powerful than the existing Pulsar 220. Though the Pulsar 375 will not generate high volumes, it will strengthen the Bajaj and the Pulsar brand image further.
"This billing gap (between Bajaj and Honda) will widen significantly in October and November as we continue to chase demand for a new product in a festive season", adds Bajaj.