Honda Motorcycle to up capacity, unveils Rs 53,000 bike

Honda Motorcycle & Scooter India (HMSI), on Wednesday, announced plans to invest Rs 500 crore towards increasing capacity over the next three to five years.

The on-going expansion at Manesar (Haryana) facility will see to the total capacity increasing to 600,000 units per annum from the present 450,000 per annum.

Sales for the current financial year is projected at 530,000 units, which will be 56 per cent more than the previous year's sales of 340,000 units. The company has drawn up plans to increase its capacity to one million units by 2006-07.

HMSI, yesterday, launched Unicorn, a newly developed Honda four-stroke, 150cc engine motorcycle. The launch of Unicorn marks HMSI's foray into the Indian motorcycle market.

The company had so far focussed only on the scooter market with products like Honda Activa, Dio and Eterno.

The Unicorn will cost Rs 52,950 on road in Delhi. The Unicorn will compete with Hero Honda's 'CBZ' as well as Bajaj Auto's Pulsar.

HMSI executives said that along with Hero Honda the total market share in Indian two wheeler market was targetted at 50 per cent by the next five years.

Unicorn will be launched first in South and East and later extended to north, west and central India. The monthly volume to start with would be 3000 units and scaled to 12,000 units by the end of this fiscal.

Honda, which entered the scooter market four years ago and emerged market leader, however, clarified that its joint venture with Hero, the domestic leader in motorcycle market, would continue at least for the next 10 years.

HMSI has has invested Rs 500 crore since its inception four years ago, had wiped out accumulated loss early this fiscal and would make net profit this year. Company officials however did not share details of the loss or profit.

The wholly-owned subsidiary of Honda aims to register 70 per cent rise in sales turnover during 2004-05 at Rs 1700 crore over Rs 1,000 crore last fiscal due to increasing sales of its three scooter models and anticipated good response of the newly launched motorcycle.

HMSI also announced that it will be making its Indian operations an export hub for Asia.

Crisil MarketWire adds: HMSI Wednesday said its foray into the motorcycle segment would not affect its existing technical and equity alliance with Hero Honda Motors Ltd. "We will co-exist," president and chief executive officer Haruo Takiguchi said.

"We (Honda Motorcycle and Hero Honda) will both expand the market and give better choices to the customer," Takiguchi said.