Despite a late entry into the market, Honda Motorcycle & Scooter India Pvt. Ltd is one of the leading two-wheeler companies in India. Months after bringing out the Honda CB Hornet 160R, Yadvinder Singh Guleria, Senior Vice President – Sales & Marketing, of Honda Motorcycle & Scooter India Pvt. Ltd., talks about the various initiatives the brand has undertaken to multiply sales and increase customer engagement
By NEETA NAIR
Q] You recently announced a tie-up with Induslnd Bank. Can you please tell us what Honda Motorcycle & Scooter India gains from it?
It is a pan India tie-up which makes Induslnd Bank the preferred retail finance company for Honda. We are increasing our product portfolio and production capacity in addition to adding more footprints in the rural areas. It is imperative for us to be in a position to provide better and easy finance options to our preferred customers so that they can own their dream vehicle. In the past five years, the percentage of customers who have opted for a two-wheeler finance compared has increased by almost 40% and 80% of automobiles are sold on loan and finance. Earlier, this trend was not prevalent in two-wheelers because of their ticket size, but now that has changed.
Q] You recently launched an app through which the consumers can book a bike, what kind of response has that received?
When we launched our CB Hornet 160R in Goa last December, we thought of facilitating bookings through an app, which is a first in the industry for two-wheelers. And since then, there have been more than 1.1 lakh downloads of the app. It gave us an opportunity to engage with our customers because most of them have this app on their smartphones. During the initial days, beyond the downloads, we received more than 2000 bookings in a month through the app.
Q] You launched the Raw, Real and Ripped campaign for the Honda CB Hornet; what was the insight behind that?
The target audience for it is the urban youth who are looking at their bikes as a reflection of their own persona. So, raw power stood for their ownership of the bike once they hit the road. The second aspect is that it should not be a gimmick. Third is ‘Ripped’, which is associated with the performance of the bike, the initial acceleration will rip apart the competition. We have tried to draw a parallel between the making of a bike and a man working out.
Q] What is the marketing mix for the campaign?
We first started with Print and Outdoor and then followed it up with a TVC which was well-timed with the buying season for college-goers. A core starting point was, however, the digital campaign along with the app which helped us record a good number of bookings before the vehicle was actually available in the market. And the timing of the TV commercial is just before the buying season for the college starts.
Q] In the 150cc offering, your earlier models Honda CB Dazzler and CB Trigger didn’t really do well. Why?
This is one question I can never avoid. As far as these two products are concerned, their performance, durability and quality can be vouched for by any auto expert. Where they could not hit the bull’s eye is perhaps in styling. Where we lacked in the previous two models we tried to make up with CB Hornet. Our R&D team took care of the styling and that’s why the campaign of Raw, Real and Ripped. There is more aggression in the style of the vehicle.
Q] Every bike company tries to cultivate a loyal following by creating biking clubs and organizing road trips. Is Honda doing anything to that effect?
Not pan-India, but yes, in some places like Kolkata, Bangalore and Chennai, we already have CBR riders clubs. What we are doing differently is organizing the ‘One Make Race’, which has only Honda bikes racing in the tracks, like at the Madras Motor Sports Club. We give an opportunity to people to get registered, arrange the license to race and provide them with bikes. We also get expert riders to come and train them to better their performance. Additionally, at the Asia Dream Cup and Asia Road Racing Championship, we sponsor good talent from India and take them to race against the best in Asia. This year, we also started a track racing driving school in Bangalore. Lastly, why should boys have all the fun? We were the first in the industry to train women riders to race in Chennai, we would be taking that forward again this year.
Q] Honda has around 55% marketshare in scooters, but only 14% in motorcycles; why the huge difference?
We have 56% market-share in scooters now. Honda started business in India in 2001. We were in a JV with Hero, which didn’t allow us to make motorcycles for the first three years of our partnership. So, from 2001 to 2004 October, Honda only made scooters. Post that, we entered the motorcycle market but there were conditions - we couldn’t enter segments where Hero was present. So we came up with only the 150cc Unicorn way back in 2004. The maximum volume of bikes sold in the country are in the 100cc-110cc category, i.e., around 42% of the market, which we were not allowed to enter. It was possible only after we parted ways with Hero in 2012. So, we are very young as far as the motorcycle market is concerned. However, in 125cc, we are leaders, because the first 125cc Honda bike was launched in 2005. Within 10 years, we are the leaders in the 125cc segment while in 150cc, we are already plugging the holes. Now it’s time for us to deliver in the 100cc-110cc category, but there is a long way to go because the rural market is very conservative, it takes a new entrant a lot of time to get through and we are prepared for that.
Q] How differently do you approach Tier II and Tier III markets? You said it’s difficult to penetrate the rural segments…?
The first and foremost thing is to physically have your network in Tier II and Tier III markets which will take time. We have been building our network step by step, adding approximately two new touch-points every day. HMSI expanded its network to 4,500 outlets and added 850 new touch-points in FY’2015-16, across semi-urban and rural markets as well. This year again, we will be aggressively pushing our touch-points and add another 850 or so. But it is still far behind our friendly competitor who has been operating for almost three decades. Another key feature of Tier II and Tier III towns is that these markets are conservative and most of the sales happen as word of mouth and because of relationship-building exercises, in addition to the product. I am not saying the product doesn’t have any role to play, but relationship and engagement have a bigger role to play. Our network in the rural areas is just two years old, so customers have just experienced our local representation in their town. Now that they have got their own customer base, word of mouth will follow, and that is when we will be able to multiply our volume. So, this year is a real test for us to find out how well our network has done to increase customer engagement and develop a relationship with them.
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