Honda plans to become the #1 two-wheeler maker in India by 2020. Will it be able to do so?

Honda has had a long association with India. In alliance with its erstwhile partner Hero (then Hero Honda), Honda has been operating in the Indian two-wheeler business since the 1980s. However, it was only in 2001 that the company launched its standalone subsidiary Honda Motorcycles & Scooters India (HMSI) with a view to expand its presence in the domestic circuit. Now that Hero & Honda are all in the solo drive mode after the JV broke up in 2010, HMSI is gunning for the #1 spot in the Indian two-wheeler market by 2020. According to HMSI officials, the company plans to take the India contribution from 13% currently to 30% by the end of 2020. However, it is easier said than done.
Undeniably, HMSI has learned a lot about the Indian market with Hero but it still has to work on building a strong dealer network in India. HMSI currently has 1,500 touch points in the country and plans to expand it to 2,000 at the end of 2012. This is not even half of the market leader Hero MotoCorp's 5,000+ touch points. Additionally, the recently launched Dream Yuga is still expansive than its close rivals like Splendor by Hero and Discover by Bajaj Auto (second largest 2-wheeler maker).
While HMSI has been able to close in the gap with Bajaj Auto for the #2 position and even became the second largest for a month in March but the #1 position is still far from sight. The only opportunity HMSI has if Hero is unable to get the technology arrangements right post the transition phase for Honda end in 2014 (which is a rare chance considering the huge cash reserves with the company). Honda will certainly be able to give a tough chase to both Bajaj Auto and Hero MotoCorp but the #1 position by 2020 is still too much to ask for.

Fiat to part ways with Tata Motors for car sales, Finally!

While the Italian auto major, Fiat has always been desperate in gaining a decent ground in India for the past many years, sales and service has been one of the major hurdle in its growth. Be it its alliance with Premier Automobiles during the 90s with products like Uno, 1100 and 124, its attempt to go solo or its recent alliance with Tata Motors, Fiat has struggled to keep the consumer happy and create a large enough loyal consumer base in the country. However, the company is finally taking the much-needed corrective measures.


As per a joint statement from Tata Motors and Fiat, the duo are ending their distribution agreement, while the manufacturing accord will continue. For the record, the marketing agreement between Tata and Fiat allowed the Italian auto maker to use the Indian firm’s distribution network in the country. However, as per the recent announcement, distribution will now be handed over to a separate Fiat group-owned company which will be headed by Enrico Antanasio.


The reason for such a move is obvious. For the past many months, there has been dissatisfaction both from Fiat's and Tata's end regarding the performance of the JV. In addition, the sales haven't been able to challenge the allegations either. For FY 2011-12, Fiat sold 16,073 units falling by  23.87%  as compared to the last fiscal. 


To start with, Fiat will encourage the 178 existing Fiat-franchised Tata dealers in 129 cities to build a strong foundation for this future network but it is expected that it will take close to two years to bring this network on its feet. It may be noted here that the company has not shared the exact dates of this transition phase but it is expected that it will start very shortly.


Clearly, it is the need of the hour for Fiat but will these independent showrooms be able to solve its woes in the Indian market? Certainly not alone. The company will also need a more aggressive product line-up to back the dealers. Hopefully, this time Fiat will be able to change the consumer perception. But obviously, it is easier said than done. 

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Hyundai's domestic sales up 10.9% for April 2012

Hyundai Motor India Ltd (HMIL), the country’s second largest car manufacturer today reported a 10.9% growth in domestic sales for the month of April 2012. For the record, Hyundai registered domestic sales of 35,070 units last month as compared tot he 31,636 units sold in the corresponding month last year. It may be noted here that the aggregate sales touched 54,606 units (52,057 units) up 4.9 % for the same period.

Commenting on the April domestic sales, Arvind Saxena, Director, Marketing and Sales, HMIL said, “Consumer confidence continues to be weak, prices went up following the excise hikes in the Union Budget and interest rates are yet to come down. Given the present conditions it’s a challenging market.”

HMIL Sales	April 2011	April 2012	Growth%
Domestic	31,636	35,070	10.9
Exports	20,421	19,536	- 4.3
Cumulative	52,057	54,606	4.9

The segment-wise cumulative sales for April 2012 are: A2 segment 44,891 units (Eon, Santro, i10, i20); A3 Segment  9,579 units (Accent and Verna); A5 segment 66 units (Sonata); SUV 70 units (Santa Fe).