India: Honda cuts outlook on motorcycle unit image

Japan’s Honda Motor, which is the world’s largest motorcycle producer, has decided to tone down its internal view of the market in India, as the economy cool down affects all automotive industry branches.

According to Shinji Aoyama, operating officer in charge of motorcycle operations, India’s two-wheel market is set to expand to just 20-25 million units by 2020, down from the previously forecasted 30 million unit, which could affect Honda as the company’s operating profit last fiscal year was made up by motorcycle sales by more than 20%.

“We thought about three years ago the Indian market could reach 16 million to 18 million units by now,” Aoyama said at Honda’s headquarters in Tokyo. “The market is not growing as fast as we expected, even though Honda sales are in line with our own projections.”

With the carmaker planning to open a fourth motorcycle manufacturing facility in India next year, Honda’s last fiscal year sales in the country grew 37% to reach 3.6 million units, which made the Japanese company the second biggest seller in the country, after former local partner Hero MotoCorp Ltd.

Honda’s global motorcycle business is also earning more money for the company than the car making business – at a 10% operating margin, compared to 4.4% for the latter, the two-wheel division brought home 165.6 billion yen last fiscal year in operating profit.

Via Bloomberg