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ActivatrumpsSplendor,butHerostillNo1|BusinessLine

ActivatrumpsSplendor,butHerostillNo1
MuraliGopalan

RacingaheadHondaActiva

StayingsteadyHeroSplendorPro

Hondareaffirmssupremacyinscootersthoughmotorcyclesremainahead

Itwasreferredtoasthecompetitionmotorcycleinthepressreleasebutitwasalltooclearthatthemodelinquestion
wasHeroMotorCorpsSplendor.
Earlierthisweek,HondaMotorcycle&ScooterIndia(HMSI)madeitknownthatitsActivascooterhademergedthe
topsellingtwowheelerbrandof2016.BetweenAprilandJune,ithasconsistentlysurgedaheadofitsnearestrival,
Splendor,withitsnettallyforthesixmonthsbeing1.33millionscootersagainst1.23millionmotorcycles.
HMSIwentontostatethatthismarkedanendtothe17yearlongmonopolyofmotorcycleswiththeActivanow
gainingleadasIndiasmostpreferredtwowheelerforcommuting.Whatwasequallysignificantwasthefactthatit
addedaphenomenal1,97,295unitsoverlastyearinjustsixmonths(JantoJune,2016)tobeontop.
TherearenotwowaysaboutthefactthatHMSIhashitthebullseyewithActivawhichhasgrownfromstrengthto
strengthsinceitwaslaunched15yearsago.Today,monthlysalesaverage2.3lakhunitsandarepoisedtogroweven
furtherwiththecommissioningoftheallscooterplantinGujarat.ItisquitelikelythatHMSIcouldevenbeproducing
threelakhscooterseverymonthfromnextfiscalifgrowthcontinuesatthisfreneticpace.
Closecall
Whatcannotbedisputedeitheristhewaythecompanyhasgrown..Itisbarelyfiveyearssincethetwocalleditquits
witheachotherandatthatpointintime,HMSIoperatedoutofasingleplantinHaryanawithanannualcapacityof1.6
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ActivatrumpsSplendor,butHerostillNo1|BusinessLine

millionunits.
Thishasnowgrownto5.8millionunitsacrossfourfacilitieswithKarnatakabeingthehighestat1.8millionwhile
GujaratandRajasthanaretiedat1.2millionunitsapiece.Haryanacontinuestorollout1.6millionunitsannuallywhile
thefollowingfiscalwillseecapacityatKarnatakabeingenhancedfurtherto2.4millionunits.Clearly,thepriorityfor
HMSIismarketleadershipexceptthatitsformerally,Hero,isnomoodtogiveupitscrowninahurry.Sure,Splendor
mayhavelostouttoActivabutinoverallnumbers,theMunjalspromotedcompanycontinuestobethemonarcheven
whileHMSIhasbeensteppingonthegasaggressively.
TherewereenoughscepticswhowerecertainthatHerowouldberelegatedtothesidelinesafteritsdivorcewithHonda
butnothingofthekindhashappened.Thecompanyhasmadeitamplyclearthatitintendstobeinthereckoningfor
someyearstocomeevenwhilecompetitivepressureiscominginfromallends.
EvenrivalsgrudginglyconcedethatitwilltakesomedoingtobetterHerowhenitcomestocustomertrustespeciallyin
smallertownsandvillageswhereitliterallyrulestheroost.AndevenwhileHMSIhascrackeditwithActiva,ithasjust
notbeenabletoreplicatethesamemagicinitscommutermotorcyclebusinessexceptforShinewhichisdoingbrisk
numbers.ItisherethatHeroiscomfortablyaheadwithmodelslikePassionandGlamourevenwhileSplendorhaslost
outtoActivainrecenttimes.
ThereisasectionofindustrywhichbelievesthatHMSIwillneedtothinkofsomethingverydifferentinmotorcyclesif
itneedstotakeonHero.Mostofitsmodelsareprettymuchonthesamelinesofthemarketleader.Thereisreallyno
compellingreasonforacustomertothinkofaHondabikeinthecommuterspace,saysarivalcompanyexecutivewho
doesnotwishtobenamed.
Yet,itwouldbeprematuretowriteofftheJapanesebrandwhichisaformidablenametoreckonwithintheglobaltwo
wheelerbusiness.ItisastrongNo2inIndiarightnowandwouldalsobethefirsttoadmitthatitisupagainststrong
localcompetition.Withfourplantsalreadyinitskitty,itwillbeinterestingtoseeifHondawillstilladdacouplemore
bytheendofthisdecadeinitsendeavourtobetheleaderofthepack.
Scootersvsmotocycles
Theotherinterestingmarketrealityisthegrowingcomponentofscootersintheoveralltwowheelerarena.Whatwasa
minusculecomponentatthetimeoftheActivasentry15yearsagohassincegrownto30percenttoday.Willscooters
eventuallytakeoverfrommotorcycles?Tosome,thismayseemplausiblebutwithruraldemandpoisedtopickup
momentum,thismaynothappeninahurry.ItispreciselyitsfaithinmotorcyclesthatpromptedBajajAutotoexit
scootersevenwhileHMSIisrewritingthescriptwithActiva.
Itisdifficulttopredictwhatkindofascenariowilleventuallyemergeinthecomingyears.HMSIsettheballrollingin
scooterswhichhasledmanyotherstofollowsuit.ItsclosestchallengersareHeroandTVSwhileYamahaandSuzuki
havealsothrowntheirhatsintothering.Withrapidurbanisation,moreandmorecustomersareoptingforscooters
thoughmotorcyclesarestillsoughtafterforpowerandmileage.
(ThisarticlewaspublishedonJuly21,2016)

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