70% of 5,500 outlets are semiurban: Honda

Mumbai: Honda, on a neck-and-neck race to become no. 1 player in the over 17-million units a year domestic two-wheeler market, is increasing its focus to the hinterland for network expansion, which has crossed 5,500 now.

In the current financial year alone Honda Motorcycle & Scooters India (HMSI) has added 300 dealerships opened and will be opening 200 more through the rest of the year.

With 5,550 sales and service outlets, this is biggest and fastest network expansion in the country's two-wheeler market, the company claimed.

Most of this expansion has comes happened since FY14 when it had only 2,700 outlets.

"During the past 2.5 years, we have added as many as 2,800 outlets, more than doubling its footprint to 5,500 outlets," HMSI president & chief executive Minoru Kato said.

"Increasing our penetration in the hinterlands in line with our product strategy is a critical part of our strategy," Kato said, adding, "we have now shifted gears to rural and semi-urban areas. In fact, 70 percent of the new touch points have come up in rural followed by semi-urban areas."

Kato today opened the 5,500th showroom at Kachhwa Bazaar in Mirzapur, Uttar Pradesh.

In the first 14 years, Honda expanded its network to only around 2,700 outlets ending FY14.

In the past couple of years to meet the increasing demand, Honda has invested close to Rs 9,500 crore in new plants, multiplying capacity four times from 1.6 million units in FY11 to 6.4 million units by August this year, he said.

This expansion is supported by new motorcycle and scooter launches ranging from 110-cc to 1800-cc engines, he added.

During the current financial year alone, it will add 500 new networks, of which nearly 300 outlets have already been done.

It can be noted that Honda has been closing the gap with its estranged partner and market leader Hero Motorcorp since early this year and in August it has narrowed to just about 52,000 units.

In May 2016, its flagship Activa scooter had overtaken the Hero's Splendor to become the largest selling two-wheelr in the country.