Honda Product and Market Analysis
Honda takes pride in being the second largest two-wheelers’ manufacturers in our country. The company has an extremely good brand image in the Indian two-wheelers’ market and hold of Honda in the country is quite strong. This is evident from the fact of the huge preference of Honda products by the Indians. Activa which is the First model Honda has gained a lot of popularity in the Indian two-wheelers’ market. Something that is even better for the company is that Activa has become the household name in almost all the Indian cities as well as the villages. In the scooter segment, Activa is basically the largest selling model. Activa is very well known for its simplicity in design, trouble-free performance, great mileage and lastly a service friendly vehicle. These are the ultimate reasons as to why it is ruling the Indian market. “Unicorn” is Honda’s first motorcycle in the country after its break up with “Hero”. This is the first commuter bike with “Mono Suspension” in India was very well received by the consumers in India. Most importantly, “Unicorn” was the best-preferred bike in the 150cc category in the Indian market.
It is true that Honda is known for a few “First”, wherein the introduction of several new features in the models which are as follows:
- Mechanism of bonnet lifting in the Activa models making the serviceability much easier
- Unique braking system referred to as “Combi Brake” where both brakes are initiated at the same time once the rear brake is applied. This eliminates the risk of skidding and certainly makes the brake more efficient in nature.
- The introduction of “Tuff up” tube in the OE scooter models helps in the sustaining of the adverse road conditions. It helps in keeping the tire inflated in case of a puncture.
Honda in its later stage has lost the strong grip on the motorcycle market of India and the only model that still lies within the top ten selling motorcycles in the country is “CB Shine”. This model which ranked fourth in the largest selling bike in the Jan 2017 came down to the eighth position in the Dec 2018. This drop in the ranking was due to the volume of sales by about 17,543 units. However, CB shine sold more than 7 million vehicles by end of 2018. Honda has still not been able to re-grip its motorcycle business despite launching a number of other different models because of the fierce competition from Bajaj, Yamaha, and Royal Enfield. The new models Hornet and X-Blade was not able to fulfill all the expectations of the customers did not live up to the expectations of the customers. But on the other hand, other similar models with the same capacity by the other manufacturers such as Bajaj and Yamaha were able to increase their share in the market in this category. The customers had a clear idea in their mind that the Honda products are fuel efficient in nature and the ones who are in search of power, their choice would certainly be Bajaj or Yamaha. However, the ones who are looking forward to a Cruiser bike will be inclined to go for Royal Enfield.
The dealers of Honda are very well equipped in terms of infrastructure as well as manpower. Almost all the dealers are permitted to open their own outlet within the allotted territory for the purpose of extending the reach and each of the branches is running as a separate profit center. Adequately trained and vastly experienced manpower is available throughout the branches along with a centralized customer support team who are in the main office taking full control of all the grievances of the customers. This makes it quite clear that the Customer Satisfaction Index or the CSI process is implemented at its best and working in its full swing. Most importantly, the overall process under constant monitoring from the head office. Despite this, there still exists some unsatisfied customers of Honda. One of the main reasons behind this might be due to the fact of huge volumes where the reach is still not a hundred percent.
The relation between the company and dealership is completely in the business terms where everything is simply cash and carry. Honda expects all its dealers to completely adhere to the policies and guidelines of the company. However, in case of any kinds of deviation will result in the termination of the dealership. Now, due to a very high volume of sales, the dealers are at the receiving end thereby making themselves self-aligned with the policy which in turn gives highly successful results.
Dumping of the vehicles is a very common practice which is followed by almost all the manufacturers in this field and it simply cannot be avoided where mixing up the models are existing largely. After the initial craze for the models like CLIQUE and NAVI, it drastically came down. At present, there are a very few buyers and the inventory are slowly getting liquidated with the help of the dealers. Honda might be taking a call on the further manufacturing of these models. One more similar example is the CBR 150 model of Honda. This is one of the premium models of Honda which find a lot of difficulties in getting the desired numbers. Though the product is a great one and all of the customers give good feedback about the product, the numbers seen on the road is quite less. The dealers of Honda are of the viewpoint that this segment is not running behind the volumes. With the “CBR 300” being launched, we need to wait for seeing the segment into which Honda is looking.
Now, if we have a look at the spare parts from Honda, they set a very good example by keeping its prices on the lower side as compared to the price of the local market. This is to make sure that the customers necessarily visit their nearby service center for the requirement of spare parts or for servicing their vehicles after the free service is over. Due to volume limitations, a number of customers still visit the local garages but make sure that the spare parts are genuinely from Honda itself.
ACG has done customer and Dealer study with leading firm Brand Koncept to know the rating of Honda Two Wheeler business