HMSI expects 2-wheeler sales to dip after 2020

By: |
New Delhi | Published: April 11, 2018 4:18:31 AM

Honda Motorcycle and Scooter India (HMSI) on Tuesday said it is looking to improve production efficiency in FY19 as it expects conservative growth after new regulations kick in from next year.

HMSI , scooty, autonobile sectorHMSI sold 6.1 million units in the last financial year, up by 22% vis-a-vis 2016-17.

Honda Motorcycle and Scooter India (HMSI) on Tuesday said it is looking to improve production efficiency in FY19 as it expects conservative growth after new regulations kick in from next year.

The government has mandated new braking rules — ABS (anti-locking braking system) from April 2019, followed by the introduction of BS VI fuel norms a year later.

“We expect two-wheeler sales of the entire industry to dip after 2020. We will look to improve efficiency and productivity of our existing plants. Our key struggle would be to convince customers to pay for additional cost after new regulations. We are very conservative and watchful about the forecast,” HMSI president and CEO Minoru Kato said at the unveiling of company’s FY 2018-19 plans.

This will significantly bump up the costs for manufacturers leading to reduction in volumes post 2020. India’s largest scooter manufacturer, Honda has an annual capacity to produce 6.4 million units each year from its four production plants.

“We aim to grow in double digit in 2018-19 by fully utilising our capacity,” Kato said, adding that he expects demand to be back after the industry stabilises with regulatory changes. “After 2020, we can add production capacity. But it is still under consideration.”

HMSI sold 6.1 million units in the last financial year, up by 22% vis-a-vis 2016-17. The company will invest `800 crore this year for upgrading facilities for BS VI technology, new products and expansion of sales network.

“We have a potential to grow because we haven’t reached the last mile. We will continue to focus on rural markets. A normal monsoon as predicted by Skymet is a good sign,” senior VP — sales & marketing — Yadvinder Singh Guleria said.
HMSI has plans to launch a new product apart from upgrading existing 18 products during this year.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.