Honda Motorcycles and Scooter India (Pvt) Ltd (HMSI) kickstarted its presence in the country with the launch of Honda Activa, a mid-sized four-stroke scooter designed exclusively for India. The company also announced its intention to launch a new model every year.
The mid-sized scooter, according to Honda, would offer the latest in technology and design and is powered by a 102cc engine with automatic transmission. The south zone launch today will be followed by launches in the west and north zones in July and August.
On Honda's decision to launch a product in a rapidly declining market segment vis-a-vis motorcycles, HMSI president and CEO Haruo Takiguchi said the decline was brought about by no new offerings and no endeavour on the part of scooter manufacturers to offer products that reflected the changing lifestyle of consumers.
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He said that despite the overall shrinking of the scooter market, automatic scooters have grown by almost 20 per cent during 2000-01.
The company which has invested close to Rs 200 crore in its plant in Haryana, said it had achieved 97 per cent localisation in the Activa and this enabled it to sell the vehicle at a very competitive price. The on-road price of the Activa is below Rs 40,000 across the country and the company expects to sell about 40,000 units in the first year.
The plant at Gurgaon in Haryana has an installed capacity of 1 lakh units and the company also plans to export some units of the Activa to neighbouring countries such as Nepal and also examine opportunities in markets like Turkey.
HMSI has entered into an agreement, valid till 2004, with Hero Honda that will see the company not venture into motorbike production and similarly the agreement restrains Hero Honda from entering the scooters market till 2004.