Honda launches "motoscooter" in India, aims big


By Narayanan Madhavan

BANGALORE, India July 23 (Reuters) - Japanese automaker Honda launched a two-wheeler billed as India's first "motoscooter" on Tuesday with an aim to more than double sales in two years on the strength of the hybrid motorcycle-meets-scooter vehicle.

Company officials told a news conference in the southern Indian city of Bangalore that the design-rich "Dio" model, coming a year after the launch of the "Activa" model billed as a family scooter, would address trendy "show-off" youths.

Honda Motorcycle and Scooter India Pvt Ltd (HMSI), a wholly owned subsidiary of Honda Motor Company relaunched its scooter business in India last year, two years after ending a joint venture with India's Kinetic group.

Honda aims to sell 155,000 units in the year to March 2003, up from about 54,000 in the previous year, and hopes to capture 59 percent of the market-share of the 100cc mid-sized range of two-wheelers, up from last year's 28 percent, they said.

"With the launch of the Dio, HMSI hopes to energise and drive the growth of the mid-size scooter segment further," Honda said in a statement.

Some 20 to 30 percent of the sales should come from the Dio model, which is expected to hold its share as Honda's total sales surge to 400,000 by 2004/05, company officials said.

Revenue is expected to grow three-fold to 4.5 billion rupees ($92.4 million) in 2002/03 from 1.5 billion in the past year, said Haruo Takiguchi, president of HMS India Pvt Ltd.

The Dio model, set to hit streets in September, has a sleek, fibre body but with the wheels clearly showing. Its price is yet to be finalised, Honda officials said.


Kinetic Motor , Honda's former partner, still has a technical collaboration agreement with the Japanese giant while being its main competitor.

Honda has a separate joint venture, Hero Honda Motors Ltd to make motorcycles and another subsidiary to make cars in India.

Honda officials say the "motoscooter" has no head-on rival but bikes like Bajaj Auto's M-80 and Hero Honda's own Street model fall in the same youthful category that the new hybrid is courting.

Dio is also aimed to be exported to Latin America, the Middle East, Africa and East Asia. About 10,000 units will be shipped out this year, of which 4,000 will be Dio, Honda officials said.

India's two-wheeler market is set to grow to five to six million units by 2004/05 from about 4.3 million in 2001/02, but the mid-sized market is growing the fastest, Honda officials said. The segment grew by 38 percent in 2001/02 to about 195,000.

Honda initially invested two billion rupees in the scooter project. One billion rupees more of investment would come over the next two years following strong sales, Takiguchi said.

(US$1 = 48.7 rupees)



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