Hero Honda's scooter launch in next fiscal

Motorcycle major Hero Honda Motors today launched its new 125 cc bike Super Splendor priced at Rs 42,231 (ex-showroom Pune). The Super Splendor launch will be followed by 'few' other launches including that of its first ever scooter in the next financial year, said company executives.

Though it has a number of launches lined up for 2005-06, the company is yet to firm up plans for its third plant. Hero Honda currently has a capacity to manufacture 24 lakh bikes between its two plants in Dharuhera and Gurgaon. The company has sold 23.89 lakh units in April-February 2005 and sees a 15 per cent growth for the two-wheeler industry in the next financial year.

Pawan Munjal, managing director, admitted that the company was facing constraints in meeting the demand during some months and is augmenting capacity at both its plants now.

As for the third plant Brijmohan Lall Munjal, chairman, said as various state governments were offering the company different concessions and incentives the new facility plans will be deferred further.

Brijmohan Lall Munjal also said that the Hero Honda's scooters, which will hit the roads in the third quarter of 2005-06, will be manufactured at one of its two existing plants.

"Not having our third plant ready will not put off our scooter project, the scooters will be ready to be rolled out in the third quarter of the 2006 fiscal," he said. Munjal refused to divulge the project cost involved in the launch of scooters.

Super Splendor, which comes fitted with a new Honda 'Quantum Core' engine, was engineered at a project cost of Rs 80-100 crore. Hero Honda claims that the 'Core' engine will give the Super Splendor a fuel efficiency of five more kilometres per litre over the 100cc Splendor.

Atul Sobti, executive director, business operations at Hero Honda is confident the new bike will not cannibalise on the 100cc Splendor's sales. Sobti said that 100cc bikes will always have a 30-35 per cent market share in India.