Honda launches 'Dream Yuga', its cheapest bike

NEW DELHI Tue May 15, 2012 7:51pm IST

Keita Muramatsu (L), president of Honda's India unit, and Bollywood actor Akshay Kumar mount on newly launched 110cc Dream Yuga motorbikes in Gurgaon on the outskirts of New Delhi May 15, 2012. REUTERS/B Mathur

Keita Muramatsu (L), president of Honda's India unit, and Bollywood actor Akshay Kumar mount on newly launched 110cc Dream Yuga motorbikes in Gurgaon on the outskirts of New Delhi May 15, 2012.

Credit: Reuters/B Mathur

Stocks

   

NEW DELHI (Reuters) - Honda Motor Co launched the lowest-cost motorbike in its line-up on Tuesday for sale in the India market, aiming to double India's share of its motorcycle revenue by the end of the decade while racing to catch up with rivals in fast-growing emerging markets.

Honda, the world's largest motorcycle manufacturer and Japan's third-biggest carmaker, has struggled to make major inroads in high-growth, price-sensitive markets such as India, where a former joint venture deal once excluded it from the key commuter motorbike segment.

Honda's 110cc Dream Yuga motorcycle will start at 44,642 rupees and will compete with Hero's Splendor brand, India's biggest-selling bike.

Commuter bikes account for around 70 percent of India's motorcycle market, which grew 14 percent over the last financial year to 10 million sold and is second only to China.

"It's very positive for Honda that they can finally compete in the mass market here," said Vineet Hetamasaria, automotive analyst at PINC Research in Mumbai.

"The pricing is in the right area ... and given Honda's brand equity, the bike is definitely going to make a dent in the market shares of others."

The motorcycle is Honda's cheapest worldwide, Keita Muramatsu, president of Honda Motorycle & Scooter India, said at the bike's launch in New Delhi.

Honda, the top seller of scooters in the Indian market but lagging in larger commuter bikes, has been steadily raising production and sales across the two-wheeler segment since it ended a 26-year joint venture with Hero MotoCorp (HROM.NS) in March of last year in an $851 million deal.

It has since announced fresh investment worth 20 billion rupees as it looks to chase down Hero, its former partner and the current market leader in commuter motorcycles.

The Japanese company is constructing its third two-wheeler factory in the country and overtook Bajaj Auto as the country's No. 2 in two-wheeler sales in March.

PRICE-SENSITIVE MARKETS

Honda expects India to account for 30 percent of its global motorcycle revenue by 2020, up from 13 percent now, Muramatsu said.

The Japanese automaker, which also builds cars in India, has been less aggressive than global rivals such as General Motors Co (GM.N) and Volkswagen AG in targeting emerging markets such as India and China.

It abandoned a one-size-fits-all global parts sourcing approach in its car business in 2010 to search for local suppliers for its global plants to help it reduce costs.

Dressed in a Honda T-shirt, Bollywood acting heart-throb Akshay Kumar unveiled the 110cc Dream Yuga motorcycle on Tuesday, touting the advantages of a motorbike over a car on the clogged roads of India's cities.

Sales of motorbikes, a family vehicle for millions of Indians, outstripped car sales by five to one in the last financial year, partly helped by high interest rates and fuel costs that pushed up the price of automobile ownership.

"India will be the most important market and will continue to be in focus for the next 10 years," said Yadvinder Singh Guleria, marketing head for Honda India. He added that Honda expected to boost exports from India to 150,000 two-wheelers in the year to March 2013 from 111,000 the year before.

Globally, two-wheelers accounted for about one-sixth of Honda's revenue in the latest financial year to March 2012.

Other Japanese motorcycle makers are also ramping up capacity and targeting volumes in India.

Yamaha Motor Co this week announced a new $280 million factory in India to nearly triple capacity to 2.8 million motorcycles by 2018, while Suzuki Motor Corp, which will likely launch a mass-market offering this month, is building a new factory to take its India capacity to close to 1 million motorcycles by 2014.

(Writing by Henry Foy; Editing by Aradhana Aravindan and Edmund Klamann)

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage