"We want to stamp our presence in rural India": YS Guleria, Honda Motorcycle & Scooter India

Honda Motorcycles & Scooters India (HMSI) recently launched its 163cc CB Unicorn motorcycle targeted at urban consumers between 25 and 35 years of age. The tagline for the product is: 'Looks good...is good.'

Priced at Rs 69,350 (standard variant), the motorcycle is HMSI's effort to strengthen the 150-180cc segment. Recording 37.2 lakh units of sales in 2013-14, the company is aiming to touch 45 lakh units in 2014-15. Currently, India contributes 25 per cent of Honda's global business. Within India, between April and September 2014, the rural market contributed 28 per cent of the company's overall sales.

afaqs! recently caught with Yadvinder Singh Guleria, vice president, sales and marketing, Honda Motorcycle & Scooter India (HMSI), to understand HMSI's communication strategy, focus on rural India, and its brand's ongoing perception battles. Edited Excerpts:

Edited Excerpts

We cannot avoid cannibalisation in the segment. But while designing this product we kept in mind the untapped 150-180cc segment, which we define as 'stylish youth'. This TG does not want to compromise on mileage yet wants to own a stylish bike. With increased displacement (163 cc) there is higher degree of power and pick up with no compromise on the mileage. Today, within motorcycles, the largest growth (in terms of percentage) is taking place in this segment.

India is not a homogeneous market. Hence, our sample comprises people across the region. This leads to a wide range of preferences in style and colour. We then cross check the initial findings of our surveys by going back to the market. We also study the perceived demand or the need of the consumer, based on which our research team works on the design board to create sketches. They are then taken to the market again to gauge the acceptance of the styling and the willingness of consumers to pay for the models.

On an average, we sell a total of 3.6 lakh units a month, of which 2.2 lakh come from scooters. In 2013, our business was fairly balanced with 53 per cent coming from scooters and 47 per cent from motorcycles.

In 2014, while the auto industry grew by 12 per cent, the scooter segment continued to grow at 28 per cent. Honda's scooter business is growing at 36 per cent. We have increased our market share from 51 to 54 per cent. Our scooter capacity is full. Almost 70, 000 of our customers are waiting for Honda scooters in markets today.

But we have not forgotten about our motorcycle segment. It is crucial for us to have a foundation and representation across this segment too. Either we create a market for our motorcycles by trying to grab share from others, or increase the capacity to produce more scooters for our customers who are waiting. Our strategy has been to start producing more scooters to cater to the unprecedented demand.

We have a total of five Scooters - Activa, Activa I, Activa 125, Dio and Aviator. In the scooter segment, Activa (with which we entered the scooter market in 2001) is still our best-selling product. We are selling 1.8 lakh units a month.

We are new in the mass segment (100-110 cc) motorcycles. In this segment, factors that determine the success of a brand include those like penetration and brand recall. Honda's penetration in the rural markets is relatively limited and there's confusion on that front. It will take some time for Honda to be recognised by its 'wing' (logo) mark.

Changing perceptions, especially in rural India, is time consuming. In this region there is limited media reach. Therefore, besides TV and print, we also have mobile vans targeted at Tier III cities, to educate consumers in small villages about brand Honda.

Our network is new in these towns, the oldest one being only a year old. In 2014, we added 600 new sub-dealers/service centres to our network. Last year we had 2,800 outlets, which by the end of this financial year will be increased to 3,800.

Honda's physical presence needs to be beefed up. Also, there has to be an increase in the 'running population' (that is, consumers riding the Honda motorcycle with the wing mark on it) in these areas.

We want to connect with rural consumers. For the past eight to nine years, Honda has spoken only to urban consumers. We are now aiming to engage with the rural community by talking to them in their language, providing them with a touch-and-feel of the product. We won't bore them with talks of our legacy. Retaining consumers and expanding our presence in the automatic scooter market are priorities.

Motorcycles still contribute 68 per cent of total volumes sold in the market and 44-45 per cent of this comes from the mass segment motorcycle targeted at rural India. So the plan is to stamp our presence in the rural market to create a base for the future.