Hero Honda eyes larger LatAm, Africa spoils

The models for export markets are likely to be from the 100cc and 125cc platforms.

Hero Honda Motors, the two-wheeler market leader, is eyeing a larger pie of the Latin American and African markets by exporting fully built vehicles and completely knocked down (CKD) units.

The company's CEO and managing director, Pawan Munjal indicated that the models for export markets are likely to be from the 100cc and 125cc platforms.

The company's technology partner Honda Motors already has presence in these markets through vehicle assembly facilities and/or dealer networks.

"Each of these is an independent venture of Honda. We need to work in close partnership with each of Honda's ventures in these markets," Munjal added.

He, however, ruled out any plans to go overseas for setting up greenfield ventures or even being part of a joint venture outside the country.

"We don 't really see any reasons for going there (abroad). We would rather work with Honda to explore markets abroad." he said.

The company's main competitors Bajaj Auto and TVS Motor have already indicated plans to invest in join ventures or greenfield production facilities abroad.

Though historically exports constituted a small portion of the company's sales, Munjal said, going forward, exports may gain momentum. In volume terms exports grew to 64,015 units in 2004-05 from 39,254 units in 2003-04, recording a growth of nearly 65 per cent.

In value terms too total exports improved to Rs 182 crore in 2004-05 from Rs 118 crore in 2003-04, a growth of 54 per cent. Munjal said, in the current financial year the company hopes to post significant growth in exports.

Exports in May nearly doubled to 9,101 units from 4,670 units in May 2004. Sales, including exports, during April and May grew 13 per cent to 461,494 units against 408,201 units in the corresponding period last year. This included 17,516 units of exports in April-May 2005, against 7,986 in April-May 2004.

Total two-wheeler exports from India during 2004-05 had improved to 366,724 units from 265,052 units in 2003-04, recording a growth of 38 per cent.

Bajaj Auto Ltd was the single largest exporter of two-wheelers from the country in the previous financial year with a share of 36 per cent of the total exports of two wheelers from the country.