The Indian market for motorcycles is incredibly, almost unbelievably, large. In fact, it is so expansive that Honda Motor Company has decided to continue with two primary sales channels for their powered two-wheelers under two separate manufacturer-distributors.
When Honda first began selling into the Subcontinent, they created a joint venture (JV) with Hero Group, at the time makers of all sorts of Indian two-wheeled transportation. This JV has been good to both companies and they have enjoyed
ever-increasing profits under the Hero Honda Motors Limited banner. However, once Honda set up Honda Motorcycle & Scooter India (HMSI), many believed that the huge Japanese factory would divest itself from the Indian partnership. As it turns out, Honda Motors of Japan is quite happy in their arranged marriage with Hero Group; it has been very successful for decades now and they have pulled down significant revenue from selling Hero Honda branded motorcycles – and the market continues to grow.
As the most recent agreement between Hero and Honda Japan will soon end, the rumors began to fly again that the two may part ways. However, that was all put to rest once it became obvious that Honda Japan will continue to be deeply involved in the business of producing Hero Honda motorcycles. The JV is starting work on its fourth Indian factory which should increase capacity by about 5 million units a year. Even HMSI, wholly owned by Honda Japan, is being expanded – a new production facility will add about 2.2 million bikes to their inventory.
India, as many of us now know, is an enormous motorcycle market and it’s only getting larger. Honda knows this very well and does not want to risk upsetting the good arrangement they already have in the South Asian nation. Times are good for the motorcycle industry in India, and they are great for Honda.
