Honda seriously exploring sub-Rs 40,000 slot for bikes

Recently the idea of Honda launching low priced (Rs 27,000) bike in India and China was made public by the Honda officials. Honda agreed that the idea behind the move is to stand against the tough competition created by low cost bikes produced in Indian and Chinese markets.

With a moto of withstanding the competition created by the low cost bike, Honda is planning to open a slot of low cost bikes in its portfolio. With this segment Honda will try to fight its major rivals in market. This big launch is declared in China next year but its just a part of the big plan. The major actions will be taken once it parts away from Hero group.

Now Honda is getting serious on the high competition thrown by its rivals. Some of the major products, performing really good in Indian markets include Passion and Splendor. It makes a monthly sale of around 2.8 Lakh units. With this high sales unit, Honda becomes one of the largest selling bikes in India.

At present Honda is relishing largest sales of Splendor and Passion but now Honda wants to head for the next price group. By inventing sub Rs 40000 unit in bikes, Honda clearly want to target the stiff competition in Indian and Chinese markets. According to the company officials, Honda want to deliver high class product at extremely low fares in order to increase the scope of target market encircled under Honda. Now the major focus of Honda is going to be on the model which would bear minimum cost and can have a sporty look as well.

Clearly, Honda want to increase its sales at a rapid rate through this strategies. But here the question arises that will this strategy land up the company on the right way?

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Chief Executive Officer, Mr Takanobu Ito, said "it must not only maintain the high attractiveness and quality of products but also further improve cost competitiveness to match the low prices of these competitors."

An auto industry official said "There is actually little option for Honda given the kind of competition it is up against from Bajaj Auto in particular.

Once it is on its own without the Hero group and the products, it will have to make up four million units annually.

The only way to do this is through incredible bargains,"