Hero Honda raises sales target by 5%

Encouraged by impressive sales volume in the first eight month of this financial year, two-wheeler market leader Hero Honda Motor Ltd (HHML) has revised its annual sales volume growth to 20 per cent from 15 per cent set at the beginning of the year.

HHML expects to close the current financial year with a sales of nearly 2.5 million units and lap up half the market by March 2005.

HHML's total sales of two-wheelers in the first eight months stood at 17,05,230 units, recording a growth of 29.45 per cent over the same period last year (13,17,248). Exports during the period grew by 63.82 per cent to touch 38,000 units, while domestic sales grew by 28.83 per cent to 16,67,238 units.

Though the average growth in sales for the first eight months was almost 30 per cent, the overall growth for the year is pegged at 20 per cent only.

"This is more due to the 'lower-base' factor in the first half of the previous financial year. Even a 20 per cent overall growth for this financial year would be an impressive one," HHML's executive director (business operations), Atul Sobti, said.

The company's growth in this year is still far ahead of the market average. According to the monthly flash report from Society of Indian Automobile Manufacturers released today motorcycle sales in the eight months of the fiscal were up 15.39 per cent to 3,207,515 units against 2,779,806 units sold in April-November 2003.

Discussing the company's short term and medium term plans, Sobti said that the company's plans to enter the scooter market was 'on course' and is its products will hit the roads in the next two years.

"Our plans to enter the scooters market is to ensure that we get new customers (for scooters) who are not visiting our show rooms at all. We plan to add more (new) customers, through these products, under the Hero Honda fold," he said. He added that HHML will be present in both scooters and scooterette market.

He said that the new dynamics drive the two wheeler market every year. In the last two year, two-wheeler sales recorded impressive growth with a slew of new products launched by major manufacturers at very competitive prices.

"The markets also grew despite the fact that these two years did witness any extraordinary monsoon," Sobti said.

He added that growth in the current financial year, that has exceeded the most bullish prediction made in the beginning of the year was possibly due to high replacements happening in the market.

"This trend is still not confirmed. The volumes in the last three months of this financial year will possibly confirm this," he added.