Honda’s initial ride in India was concentrated in urban areas on the back of its automatic scooters but with the launch of its mass segment bikes, YS Guleria, Vice President, Sales & Marketing, Honda Motorcycle & Scooter India Pvt. Ltd(HMSI) says that the company is focussed on upping its game in Tier II and Tier III towns
By Simran Sabherwal
Though Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI), a 100% subsidiary of Honda Motor Company Ltd, Japan, started its Indian ride with the launch of its operations in May 2001, Indian consumers were introduced to the brand courtesy their joint venture with Hero MotoCorp, (erstwhile Hero Cycle) – Hero Honda. With the termination of the nearly three-decade long JV, Honda has been on an aggressive journey in the country and has notched up impressive growth along the way and even outperformed the industry average. From a market-share of just 1% in 2001-02, HMSI commanded a market-share of 22% in 2013-14. While the entire automobile sector hit a roadblock during the recent economic downturn, HMSI bucked the trend and clocked growth of around 30% even during that period. Says YS Guleria, Vice President, Sales & Marketing, HMSI, “This shows that there is an increased propensity of the customer towards Brand Honda and its products and services. We grew even when the market was in recession, now we are confident that Brand Honda will do better as the natural flow of the customer is there and sentiments are positive.”
Re-establishing Brand Honda
Honda started its Indian ride with the Activa, an automatic scooter. It found acceptance in the urban and semi-urban market, helping Brand Honda gain leadership in this segment. Guleria says that the growth of automatic scooters is almost double the industry growth rate and Honda is the leader in this space.Honda soon followed up with launches in the niche premium segment–the 150cc motorcycle CB Unicorn, 125cc CB Shine and 110cc CB Twister. What was missing in the portfolio was a mass segment bike and this impacted its expansion in the rural areas which also had limited representation.
This changed with the launch of Dream Yuga (110cc) in 2012 which provided the impetus to Honda to expand its footprint in the rural market.Now, there are three motorcycles in the Dream series (CD 110 Dream, Dream Neo and Dream Yuga).
While Honda’s entry in the urban centres was smooth, confusion about the brand prevailed in the smaller markets. To overcome this, the brand formulated Wave 1.0 of its marketing strategy, 3Cs – Create products for rural, Communicate about the brand in their language and Connect with them by engaging with consumers. While the Dream series catered to the needs of this market, Honda signed on actor Akshay Kumar as a brand ambassador. Reasons Guleria, “Akshay connects strongly, especially in Hindi-speaking markets (HSM) and he is seen as a role model. We felt that he would be able to take our communication in a much better way to the large market.”The brand has also associated with a reality show with the actor, Dare2Dance on Life OK.
Honda also communicated its global slogan, ‘The Power of Dreams’, with its India-specific brand slogan, ‘Sach KardengeSapne’ to connect with customers in their language.
Print: A Tangible Benefit
Talking of Honda’s media mix, Guleriasays that HMSIallocates the highest percentage of its marketing spends to Print. “Currently, our spends in Print would be in the range of 45-50% of total spends. One good thing is that you can clearly assess tangible returns from Print. You can measure the number of enquiries that come in post a Print campaign,” says Guleria. “Print is very specific, the dates are clear, the medium, partner and publication is known and which day it was carried and the responses after the Print release. This makes it tangible,” he adds.Honda also places strong emphasis on activations at the ground level where consumers get an opportunity to touch and feel the brand.
Revving Up Growth & Penetration
Though Honda is well spread, the majority of sales in terms of volume comes from the urban and semi-urban areas,and almost 50% of the sales come from the South and Western regions. Remarks Guleria, “Seven States of the country make up 50% of the two-wheeler business. That is the balance or imbalance that’s existing from the potential point of view.” Though Uttar Pradesh is one of the largest markets for Honda, after Maharashtra and Tamil Nadu, Guleria believes that North, Central and Eastern regions are still relatively less penetrated. Calling Uttar Pradesh “a tough nut to crack” Guleria says that the State was not an automatic scooter market and it took Honda five to six years to build this segment and get good representation and penetration.He adds, “This market was not too open to new ideas. It was a traditional and conservative market, dependant on word of mouth and reference on advice from elders. This is a peculiarity of this market.”
Looking ahead,Guleria says, “The North, Central as well as East have a long way to go and there is a lot of untapped potential for Brand Honda there. A challenge, particularly inCentral and places like Bihar, is that the market is fairly spread and not a concentrated market. We need to develop a network over a large geography but there is a limit as to how much you can build in a year.” However, Honda has taken this challenge head-on with an aggressive network development target, adding 500 new touch-points last year and planning to add 1,000 this year.
The Honda aggression is not just limited to its marketing and network development but also in its portfolio. The company started this financial year with the launch of Activa 125 which was followed by its most affordable bike CD 110 Dream, priced at Rs 41,110 to strengthen its position in the mass segment and rural areas. The company is gearing up for the festival season with new editions of CB Shine and Dream Neo. Guleria adds, “Next quarter we will be launching a new 160 cc motorcycle and that will be followed by some more launches both as variants as well as some totally new products.”
