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Honda plays it safe, eyes 80,000 bike sales

28-May-2004
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Honda plays it safe, eyes 80,000 bike sales

Honda Motor Scooter India has set a conservative target of manufacturing and selling 80,000 bikes in the first year of its operations.

The subsidiary of the Japanese two-wheeler major will debut in September in the premium segment dominated by Bajaj Auto’ Pulsar. The Pulsar sells around 25,000 units a month, whereas Honda will attempt to put 6,500 vehicles on the road every month.

“Honda is very conservative in its approach which was apparent even at the time of Activa’s launch. The company’s expectation was very low and they decided not to flood the market with their product at first instance,” said a source close to the company.

At an annual analysts conference about a fortnight back, Rajiv Bajaj, joint managing director of Bajaj Auto, when questioned about the imminent threat from Honda, said its entry would help grow the segment but the Pulsar did not see any immediate threat as Honda was looking at selling only around 6,500 units a month in the first year.

The Japanese giant virtually resurrected the domestic scooter market with its debut vehicle Activa. Honda sold over 3,10,000 units last year (April 2003-March 2004) with its three offerings — Activa, Eterno and Dio.

Industry watchers say Honda could be replaying its Activa strategy by soft-pedalling the product and in the process create a huge demand and long waiting list for it.

Honda produced only around 55,000 units of Activa in its first year (production began in April 2001, while the vehicle was available in the showroom from July 2001), 1,66,000 units during April-March 2003 and 3,40,000 units in April-March 2004.

Honda has bought 26 acres of land adjacent to its scooter plant in Gurgaon to manufacture motorcycles. The plant has a capacity of around 1.5 lakh to 2 lakh units a year.

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