Honda bets big on recovery of rural demand, upcoming festive season

Rural sales are around 23 per cent of overall sales, which is around the same as pre-Covid times.
Honda Motorcycle & Scooter India (HMSI) is betting big on recovery in rural demand and increase in sales from the festive season.


A top executive of the company on Friday said rural demand has almost recovered to what it was last year.


“We were not getting volume uptick till Unlock 3.0, but now with unlock happening in the urban areas as well, close to 95 per cent of our network is open. Almost similar contributions from urban and rural areas are coming, like before the pandemic. So, we are not seeing much of a difference in urban and rural sales,” said Yadvinder Singh Guleria, director, sales and marketing, HMSI.


Rural sales are around 23 per cent of overall sales, which is around the same as pre-Covid times.


The company recently reported domestic wholesale sales of 5,00,887 units in September this year, a 10 per cent growth compared to 4,55,896 units in the same month of 2019.


HMSI’s rival Hero Motocorp also witnessed a growth of 16.11 per cent year-on-year in its domestic wholesales for September to 6,97,293 units.


This is due to robust recovery in sales of entry-level motorcycles in rural and semi-urban markets after the easing of lockdown measures.


In contrast to other automakers, that said people are preferring more entry-level products, Guleria said HMSI has seen a steady growth of the premium portfolio.


“Even in the recently-concluded sales period, the percentage contribution of premium models far beats that of the affordable version. For instance, in Activa, it’s a more premium model which is being preferred by customers,” Guleria said.


Entry level two wheelers (75 cc to 125 cc) make up almost 75 per cent of the total sales of Indian two wheeler companies.


The company recently announced its entry into the middle-weight motorcycle segment – 300 cc and above – with Highness CB 350. This new offering will compete with market leader Royal Enfield’s Classic 350 and others in the segment.


Guleria said the company will use its BigWing dealership chain to market the product and also bet on a loyalty club.


In order to make the mid-segment 300cc-500cc products more accessible, the company plans to push the ‘BigWing’ dealership count to 50.


Honda is also planning to come up with three more premium products soon which will sell alongside the existing premium line-up of motorcycles.


“The motorcycling community in India is growing day by day and they are a set of customers who look for more premium products and need a personalised approach. We will have an exclusive portfolio for them,” Guleria said.


Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel