HMSI’s (Honda Motorcycle and Scooter India Ltd) performance in the two-wheeler market is steadily declining and HMSI would lose its market share to competitors, Bajaj and Hero Honda in the coming months.

Shinji Aoyama, President and CEO, HMSI -

Because of the production constraints, we are losing market share and even the Indian market is growing faster than expected.

The two-wheeler company is facing troubles with its production capacity. With the two-wheeler market growing by leaps and bounds post-recession, HMSI can’t boost its production to cater to growing market. The domestic two-wheeler market grew by 26% (YoY figures) but HMSI grew only a 19% (YoY) which is an indication of the company’s inability to keep up with the market.

Honda Motorcycle India’s best sellers are the Unicorn and the gearless scooter Activa. The Honda Shine, CB Unicorn Dazzler and the CB Twister are other bikes also which manage decent sale numbers. The waiting period for the Unicorn and Activa is around 2 – 3 months and for the other models is between 1 – 2 months.

Long waiting periods are the biggest turn offs for the consumers. In this highly competitive market where bike buyers have myriads of good options to choose, Honda just can’t afford to lose its customers to Hero Honda, Bajaj and TVS.

HMSI recently added an new assembly line in its Manesar plant in Haryana to boost its annual capacity to 16 lakh units, but even then the demand of the market can’t be met.

Honda Motorcycle and Scooter India Ltd  is now building a second factory at Tapukara in Rajasthan with an investment of Rs. 500 crores. The new plant is scheduled to become operational in the second half of 2011 with annual capacity of 6 lakh units.

Would the second plant be the solution to HMSI’s production woes or should HMSI develop a market oriented manufacturing approach like Hero Honda and Bajaj?

Source: mydigitalfc