Honda Motorcycle sets modest target for FY16

Honda Motorcycle and Scooter India is expecting to sell 4.7 million two-wheelers in 2015/16 compared with 4.45 million in 2014/15, a growth of 5.6 per cent. In the previous financial year, the company had registered a 20 per cent growth in sales.

The modest sales target in the current financial year is because of the company's limited capacity. "We are already operating in full capacity (in three of our existing units), and new unit in Gujarat would only start working from January 2016. Therefore, we have a modest sales growth target next year," sad Keita Muramatsu, President and CEO, Honda Motorcycle and Scooter India at a press conference in New Delhi on Wednesday.

Honda currently has a capacity to manufacture 4.6 million two-wheelers annually and by the end of this financial year, the capacity would increase to 5.8 million after its new Gujarat unit starts operations.

Honda would invest 1,775 crore in the next financial year on capacity expansion and new launches.

The company expects to increase its overall capacity by 39 per cent in next two years to 6.4 million.

HMSI has planned 15 launches in 2015, out of which six have already happened. One of the upcoming launches during the year is its sport bike CBR 650F, which the company may roll out by August this year.

"Initially, we have planned to manufacture two CBR 650Fs every day. Right now our objective is to train and develop local expertise in manufacturing the product," said Yadvinder S. Guleria, Vice President, Sales & Marketing, HMSI.

The company has also planned to launch a product, which would "create a new segment by itself". However, no details were given.

On the impact of sales during the year due to below average monsoon predictions, Guleria said: "We have seen early predictions about monsoon going wrong in the past. Anyway, around 59 per cent of our total sales were scooters, which are mostly sold in urban areas. In case if rural incomes indeed get affected by poor monsoon, scooters sales would account for 65 per cent of our total sales in 2015/16."