Sunday, December 12, 2004
Honda to continue support for Indian bike unit
Reuters New Delhi, December 10
Japan's Honda Motor Co will continue to provide its top-ranked Indian motorbike unit with latest technology and foresees more robust growth for it in the future, its chief executive said on Friday.
Analysts had feared Honda's interest in its 26 percent-owned Indian subsidiary, Hero Honda Motors Ltd, could dip after another fully-owned local Honda unit also began making bikes earlier this year.
But Japan's third-biggest automaker has said it will use both firms to launch new models in India and expects the two together to grab half the share of the Indian two-wheeler market, the world's second-biggest.
India's Munjal family, which owns a clutch of companies including Hero Cycles, the world's larger bicycle maker, holds another 26 percent stake in Hero Honda.
New Delhi-based Hero Honda, which mainly competes with No. 2 Bajaj Auto Ltd. <BJAT.BO> and third-ranked TVS Motor Co Ltd as a dominating 52.7 percent share of the local market with its sturdy, fuel-efficient bikes.
"Honda will continue to provide Hero Honda with full and latest technological support and we look forward to an even more robust growth for our company," Takeo Fukui, Honda's chief executive, said in a statement at Hero Honda's 20th anniversary.
"We have already worked out the new product strategy (for both companies) till 2008," Fukui said.
Honda Motorcycle & Scooter India Pvt Ltd, Honda's wholly owned unit, has been making scooters in India since June 2001 but launched its first bike, the 150cc Unicorn, in September.
Hero Honda, which makes best-selling models like the Splendor and Passion motorcycles, reported a 29.5 percent rise in sales in the first eight months of this business year that ends in March to 1.71 million units.
It has sold nearly 20 million bikes in the past 20 years.
Indian companies are expected to sell over 6.2 million two-wheelers, including scooters, motorcycles and mopeds, in 2004/05 (April-March).
Hero Honda's shares ended 1.65 percent lower at 480.6 rupees on Friday at the Bombay Stock Exchange, whose benchmark index finished 1.12 per cent lower.
© HT Media Ltd. 2004.