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Honda Motorcycle and Scooter India (HMSI) today launched its cheapest motorcycle in the mass commuter segment the 110 cc Dream Neo to take on former partner Hero MotoCorp’s flagship model Splendor.
The Dream Neo is priced at an aggressive Rs 43,150 (ex-showroom, Delhi). The Hero Splendor family has three models with an engine capacity of 97.2 cc – Splendor+, Splendor NXG and Splendor Pro - priced between Rs 42,250 and Rs 47,150.
Super Splendor tagged upwards of Rs 50,650 is trapped with a 125 cc engine. On an annual basis, Hero sells an average of over two million units of the four products in the Splendor family.
Keita Muramatsu, president and chief executive officer, HMSI said, “Dream Neo is Honda’s next big leap towards creating deep inroads into the Indian commuter segment.” Developed specifically for the Indian customers, the Dream Neo is powered by a 110 cc engine and the company claims that it will give a mileage of 74 kilometre per litre of petrol.
The mass commuter segment accounts for around 65% of overall motorcycle sales in the domestic market. HMSI's product interventions in the category attain significance in the light that the company wants to overtake Hero MotoCorp to become the number one two-wheeler maker in the country by the end of the decade.
Currently, HMSI with two products, CB Twister and Dream Yuga has a market share of 4.9% in the mass commuter category. The Dream Yuga is priced between Rs 45,101 and Rs 48,619. Hero’s market share in the segment stands at a strong 69%.
To boost volumes, Muramatsu hinted HMSI is looking at developing additional motorcycles at lower price points at its Technical Centre in Manesar for the Indian market. “Our R&D team is continuously considering how to reduce costs, improve mileage without compromising on power and adding value to products. In future, we will look at more entry-level products”, Muramatsu informed. With the Neo in its portfolio, HMSI aims to increase volumes by around 150% to sell 800,000 units of the Dream series in FY14.
"Overall, we are confident of customer demand for Honda two-wheelers and eye 43% growth with 3.93 million unit sales in FY'14," Muramatsu said. The growth is sales would be aided by a concurrent expansion of its dealer network, specially in tier II and III cities in the country.
HMSI has plans to put in place about 2,500 sales outlets by the end of this fiscal from 1,950 outlets in FY'13.
The company will commission its third facility in Karnataka by the end of next month. It will have total installed capacity of 4,00,000 units once the unit becomes operational. HMSI is scouting for locations to set up a fourth facility but a location has not been finalised.
The company today said it has raised the prices of its entire range of two-wheelers by up to Rs 800, mainly to offset the impact of hike in diesel rates.
Y S Guleria, vice-president (sales & marketing), HMSI said, "We have hiked the prices of all our models by Rs 200-800 from April 1. It was done mainly to offset the impact of diesel price increase in recent times.”
Post-hike, HMSI's three scooters Dio, Activa and Aviator are priced between Rs 44,718 and Rs 53,547. The company's current range of eight locally manufactured motorcycles is now priced between Rs 45,101 and Rs 1.77 lakh.
