Hero Honda sales up 9.54% in May 2008

Good looking bike, the Hero Honda Hunk seems to be doing well despite its terrible name...

Hero Honda Motors Ltd (HHML) has reported a 9.54 percent rise in its motorcycle sales in May 2008 at 312,317 units, compared to 285,109 units in May last year. The company attributed this rise to its new bikes, the Splendor NXG and the Hunk 150.

‘While the Hunk has contributed largely to doubling our volume and share in the premium segment, the refreshed Splendor NXG has been driving the volumes in the deluxe segment,’ said Anil Dua, senior vice-president (marketing & sales), HHML.

Honda to re-examine India sales target, will launch Civic Hybrid next month

Expect to see the very high-tech Civic Hybrid in India next month!

Honda, which today launched the 8th generation Accord in India, is all set to review – and perhaps revise – its sales target (90,000 units in FY 2008-09) for the country. This, according to Masahiro Takedagawa, CEO – Honda Siel, is because current market conditions in India are a bit unpredictable.

Speaking about Honda Siel’s new manufacturing facility in Rajasthan, Takedagawa said that it would be ready to make some engine components by September this year, and will start making cars by the end of 2009. The plant, which is being set up at an investment of US$230 million, will be extremely important for fueling Honda’s expansion plans for India.

On the new cars front, Honda will start importing – in very limited numbers, we suppose – the Civic Hybrid by the middle of next month. And by the end of 2009, the company will also be ready to launch its first small car in India.

Work restarts at Hero Honda's Daruhera plant

Hero Honda has announced that work has resumed at the company’s plant in Daruhera, in Haryana. An agreement has been made with the workers, and the strike has been called off. ‘Normalcy has been restored at our Daruhera plant following a mutually amicable resolution of certain concerns raised by some contract labourers due to instigation by external elements,’ a press release from Hero Honda.

Hero Honda management had earlier moved some contract labourers from one work area to another, within the Daruhera plant, which had not gone down too well with the workers. Matters had been compounded given the fact that some workers feared losing their jobs because of Hero Honda’s plans of shifting a large chunk of production to its new plant near Haridwar, in Uttarakhand.

Hero Honda's Daruhera plant closed, workers go on strike

Hero Honda has been hit by a workers' strike, forcing the closure of its manufacturing unit at Daruhera, in Haryana. Work has stopped at the factory since today morning, after a strike broke out – the issue being that Hero Honda management discontinued services of about 50 contract workers. These workers had, apparently, not agreed to be shifted from one production line to another.

According to some reports, Hero Honda workers have been opposing the company's move to shift a large part of its production to its newly opened plant at Haridwar, where the company plans to produce its high volume models like the Splendor and the Passion.

Hero Honda sales up by 9pc in April

Hero Honda: Relentless growth, despite high interest rates and lack of readily available consumer finance

In the month of April 2008 – which marks the beginning of Hero Honda's 25th Year of existence – the company sold 286,252 two-wheelers, as compared to 262,544 units in the corresponding month last year, a growth of nine percent. Notably, this performance comes in the face of high interest rates and lack of readily available consumer finance.

According to a company press release, Hero Honda's new bikes – the CBZ X-treme and the Hunk – have helped the company double its share in the premium segment. Plus, with the company having set up a dedicated ‘rural vertical’ to reach out to potential customers in the rural areas, and a fast expanding distribution network, Hero Honda looks all set for relentless growth.

For the financial year 2007-08, Hero Honda reported cumulative sales of 3,337,142 two-wheelers, surpassing its previous year's tally. On the bottom line, Hero Honda reported a robust EBIDTA margin growth of 53% for the fourth quarter of 2007-08.

Last month, Hero Honda's 25th year got a befitting start with the commencement of production at its new manufacturing plant at Haridwar, Uttarakhand. The new plant has an initial installed capacity of 500,000 units, which will be scaled up to one million units by the end of 2008.

Hero Honda creates rural vertical, wants to expand beyond urban markets

Hero Honda wants to tap the Indian rural market to drive further growth

It seems Hero Honda will finally give in to the wishes of Honda, and let the latter concentrate on the urban/metro markets with bigger, more powerful and more expensive motorcycles, while Hero Honda focuses on smaller towns and cities, and the rural market, with fuel-efficient bikes of smaller engine capacities.

According to some reports, less than 10 percent of rural Indian households own a scooter or a motorcycle, which could mean that rural India could be a fruitful target for the marketing men from Hero Honda. And indeed, Pawan Munjal, Hero Honda MD has said that his company has created a special ‘rural vertical’ which would lead HH’s expansion in the rural market.

As part of its strategy, Hero Honda will use incentive schemes woven around local festivals, village markets, shows and fairs, and special displays to promote HH two-wheelers. Hero Honda will also tie up with local banks and finance institutions to make sure cheap and easy credit is available, to allow people in rural areas to buy HH bikes easily. As reported earlier, Hero Honda is even looking at setting up its own two-wheeler finance division for the same purpose.

Finally, Hero Honda will also expand its sales and service outlets all over the country, specially focusing on rural India, making sure that parts and service availability is not a problem for the rural customer.

Hero Honda plans to get into retail finance to combat liquidity crunch

Hero Honda is getting into retail finance to make sure its two-wheeler sales don't slow down

In recent times, the Indian two-wheeler industry has taken a hit because of high interest rates and the prevailing credit squeeze in the market. To try and remedy the situation, Hero Honda has announced that it plans to enter the retail finance market, and is said to be looking for a JV partner for this new business.

Hero Honda is looking at the non-banking finance company (NBFC) route to get into the retail finance market. This is similar to the approach chosen by other players in this segment, like Bajaj Auto Finance and TVS Sundaram Finance. It’s interesting to note that this move from the country’s largest two-wheeler manufacturer comes at a time when some financial institutions (for example, GE Money, Centurion Bank of Punjab and Citibank) have completely exited the two-wheeler finance market, while some others like ICICI Bank and HDFC Bank have reduced their activity in this sector.

In fact, two-wheeler sales have suffered because of high interest rates and non-availability of finance from banks. Till now, Hero Honda has somehow managed to buck the trend of declining sales, but by setting up its own finance company, HH wants to ensure that its two-wheeler sales don’t suffer too much. And while the new financing arm will take some time to commence operations, Hero Honda is already in the process of tying up with some regional and local vehicle financing partners.

Hero Honda MD, Pawan Munjal recently said, ‘There is strong liquidity crunch in the finance market and we have been looking for tying up with more local and regional financial partners. Some of our dealers have their own financing partners and it should help us to net higher sales.’

Hero Honda: Production starts at Haridwar plant

Hero Honda has completed 25 years of operations, and is all set to keep growing

Reiterating its commitment to support the economic development of Uttarakhand, Hero Honda Motors Ltd. (HHML), has commenced production of its two-wheelers at their new plant in Haridwar. The state-of-the-art addition to the Hero Honda family of manufacturing facilities was inaugurated by Dr Brijmohan Lall, Chairman, Hero Honda Motors Ltd.

‘This is a momentous occasion for the entire Hero Honda family. It has indeed been a very fulfilling journey, which started from Dharuhera in 1985 to Haridwar today. None of this would have been possible without the unstinted support and cooperation of all our stakeholders. I take this opportunity to especially thank our customers who have reposed their faith in us and in our products for all these years. I would also like to thank the Uttarakhand State Government for its support all through the setting up of this plant,’ said Dr Lall.

Pawan Munjal, MD & CEO, Hero Honda Motors Ltd., said, ‘What better time for this to happen than today, the onset of the silver jubilee year of our company. This plant sets new benchmarks in terms of lay-outs, processes, supply chain management, human resource management and most importantly environmental consciousness. This should truly be a center of excellence for the manufacturing industry in the country.’

The new plant will employ flexible production techniques enabling production of different models in the Hero Honda portfolio. In addition to manufacturing for the domestic market, the plant will also cater to export requirements and also contribute significantly to the economic development of Uttarakhand. Hero Honda and its ancillaries have already generated direct employment opportunities for over 2,000 people in the state.

Along with employment, emphasis has also been laid on training and learning. The plant has set up a Gurukul within the complex, which serves not only as a learning centre for all employees who join the plant, but also for their continuous development and upgradation of skills.

As a part of ‘Hero Honda We Care,’ the company’s Corporate Social Responsibility (CSR) program, the company has lined up several initiatives that promise to bring about significant improvements in the lives of people residing in Haridwar and neighbouring areas.

Also, a Hero Honda group company will be setting up a Technology Park, two Industrial Parks and a shopping mall within the plant complex over the next two years. Housing issues will be addressed with the construction of two residential complexes. Accessibility of quality healthcare and education are other priority areas, and accordingly the company plans to set up 200-bed hospital and a school within the plant complex. All this envisions creation of an industrial cluster in Uttarakhand which will multiply generation of wealth and prosperity in the region.