Honda to Launch a new Dream Yuga 100cc against Splendor

Honda Motorcycle and Scooters India (HMSI), the second largest two-wheeler manufacturer in India, is eying the No.1 spot, which is being enjoyed by erstwhile partner Hero MotoCorp. Hero MotoCorp's most of the sales come from the 100cc commuter segment due to its iconic Splendor motorcycle, and now, Honda is planning to launch a new 100cc bike against the Splendor.

There are reports that Honda will launch another 100cc motorcycle in the next couple of months. The bike will be a part of the 'Dream' commuter series and will sit under the Dream Yuga 110 bike. Some sources report that the new bike is code named 'K23', and will use the Dream Yuga's platform. We have already seen the experiment in Bajaj Discover series, where both Discover 100T and 125ST use a similar platform.

News agency Economic Times talked to a person close to the development, who said, "The new 100cc offering is the value-engineered version of the existing 100cc bike and will be priced aggressively so it can be positioned straight at the Splendor segment. Yet again, the company is striving for higher fuel economy as the USP."

HMSI has already announced their 20 million sales plans by 2020 and to achieve this hefty goal they will launch 4 new two-wheelers every year. In a step towards the goal, Honda is planning to achieve a 6 lakh units sales of this new 100cc bike in FY14, where Hero MotoCorp sells 2.1-2.2 million units of Splendor family, which includes Splendor , Splendor Pro, Splendor NXG and Super Splendor. HMSI plans a commutative sales of 1.2 million units of its Dream series, which will include the Dream Yuga and yet to be launched 100cc Dream Yuga bike, making it around 30% of the company's overall sales in FY14. Honda Motorcycle is eyeing an overall sales of 3.93 million units in FY14.

VG Ramakrishnan, MD, Frost & Sullivan (South Asia), says, "Splendor has been one of the most successful models in the Indian two-wheeler space for decades. But that also shows it has been around for decades and needs revamping." "Honda is in an aggressive mode, whereas Hero is the one defending. History has shown that the one on the defensive starts losing. So, Hero is bound to lose market share to Honda. The answer lies in flanking the Splendor family with an additional model that is not only aggressively priced but offers value on par with Honda, if not better," adds Ramakrishnan.

When contacting Mr. Yadvinder Singh Guleria, VP (sales & marketing) at HMSI denied to comment on the project, says: "The 100-110cc motorcycle market is a very large market and with our existing product portfolio we have a limited representation there. We have said this before, we would be expanding the Dream series going ahead and we will be launching new products there. We can't comment more than this at present."

Honda Dream Yuga is available for Rs. 44,000-48,000, while the new 100cc bike is expected to be around Rs. 40,000-45,000 making it equivalent to Hero Splendor. In FY13, HMSI's market share has shot up almost 400 basis points to 18.64% compared with 14.85% at the end of FY12. Market leader Hero saw its share falling to 43.01% in April-February of FY13, from 45.17% in FY12. If Honda achieves its sales target in FY14 it will get a significant market share from Hero MotoCorp. According to data from the Society of Indian Automobile Manufacturers (SIAM), Hero's total sales stood at 54.61 lakh units between April 2012 and February 2013, while HMSI sold 23.67 lakh units for the same period, making it second largest two-wheeler manufacturer. And the new 100cc commuter motorcycle will add a good number to its sales, claiming Honda's future plans to be a reality soon.

"Today, the market is almost 1.4 crore (units) in India. So, if (it) remains (at the) same level, no growth happening, we may become No.1 in 2015 or 2016," Honda Motor Cos Operating Officer Shinji Aoyama had said on the sidelines of a press conference on March 11 to launch CB Trigger, a new 150cc bike.