Slow Sales Force Honda To Scale Back Two-Wheelers Production in India

• Published On: 28 June 2019
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Honda decides to cut production of two-wheelers in India amid sluggish demand.

It is not just the car industry that has seen a period of slow sales, but leading bike maker in India, Honda Motorcycles and Scooters India (HMSI) has also gone through a rough patch in sales lately. The sales slump has seen the Japanese bike maker cut down production of units. In order to avoid stockpiling, the company has now scaled down the manufacturing by around 15-20 % for the first quarter of the financial year 2019-20.

The Japanese maker says that the scale back in manufacturing is based on the prediction that the sales will remain a bit slow in the months to come. Reasons cited by the maker are that the ongoing elections, the overall rise in prices due to the enforcement of latest norms, and higher insurance premium plus a general slump in demand has led to the sales seeing a period of slowdown.

Honda spoke on the recent manufacturing scale down to a leading daily and stated,

Increased insurance premium in September 2018 dampened the festival sentiments, and pre-festival stock buildup was converted into high inventories for the two-wheeler industry. Recognizing this situation early, we realigned our supply with the domestic demand to correct inventories and support our business partners. Green shoots of demand pickup are not visible. A tough quarter ahead.

Honda Activa scooter still remains the cash cow for the Japanese maker. The presence of a lot of choice in the Activa range along with various pricing options makes the scooter range a hit among customers in India. Honda Activa provides the underpinnings for many of the brand’s offerings in the market that start from the low-priced Cliq and go up all the way to, Dio, Aviator, and the top end Grazia.

Activa scooters see the most sales from the 110cc Activa 5G and Activa-i. Higher priced models such as Activa 125, Grazia and Aviator see moderately good sales and bring in good numbers for the company. Honda Activa locks horns with Hero Pleasure, Hero Maestro, TVS Jupiter, Suzuki Access and the Yamaha  Cygnus Ray in the Indian market.

Not just the scooter segment, Japanese bike maker Honda also has a large portfolio when it comes to commuter segment bikes in India. This range includes CB Dream 110, CB Shine 125 and Unicorn 150 among others.

Apart from the regular commuter segment offerings, the Japanese bike maker also offers some premium options in the entry level performance segment in the form of Honda CBR 250R and the newly launched naked street Honda CB 300R. Not just entry level sports bikes, the company also sells high-end bikes such as CBR 600R, Africa Twin, and the Goldwing in India.