The history of HMCL could be traced back to 1946, when Soichiro Honda, a mechanical engineer, established the 'Honda Technical Research Institute' in Hamamatsu, Japan. The idea was to develop and later produce small two-cycle motorbike engines. Honda's first product, an A-type 50cc bicycle engine, was produced in 1947. In 1948, HMCL was incorporated with a capital of one million yen. Soon, the company started to design and produce lightweight motorcycles. Honda's first motor cycle, D-type two strokes 98cc, was produced in 1949. In the early fifties, the headquarters of the company was shifted from Hamamatsu to Tokyo and the company got listed on the Tokyo Stock Exchange. In 1959, the American Honda Motor Company Inc. was established in Los Angeles.
Honda Came into India in 1984 with a joint venture between the Hero Group and Honda Motor Company. They established a new entity in 1984 as the Hero Honda Motors Limited at Dharuhera India.
After coming out of the joint venture with KEL, HMCL planned to introduce its own two-wheelers in the market. In October 1999, in a major strategic initiative, HMCL established HMSI. The company made an initial investment of Rs 3 bn to establish a plant with an annual production capacity of 200,000 units.
Launched in 2001, Honda Activa was the first scooter model of HMSI for the Indian market. A 102 cc scooter, Activa was specially designed keeping in view the needs and preferences of Indian consumers who expressed that the conventional Indian scooter was too big and difficult to handle and that the scooterette was too small and similar to a moped.
In September 2004, Honda Motorcycle and Scooters India Limited (HMSI), the wholly owned subsidiary of the Japan-based Honda Motor Company Limited (HMCL),1 launched its first 150cc motorcycle named 'Unicorn.' Priced at Rs 50,043 (ex-showroom price, Delhi), Unicorn had a four stroke 13.3 bhp engine with five gears. The new bike was available in five colours and was designed to achieve a speed of 0 to 60 kmph in five seconds. Unicorn was promoted with the caption "Be a wing rider." (Refer Exhibit I for a visual of Unicorn). Targeted at youth, Unicorn looked sportier than all the existing motorcycles in the premium segment and was pitted against Bajaj Pulsar, the leader with 75 percent market share in that segment. The other bikes in this segment were TVS Fiero, LML's Graptor and Hero Honda's CBZ (Refer Exhibit II for a comparison of leading motorcycle models in India). HMSI expected sales of 56,000 units of Unicorn in the first year of launch.
Questions:
1. Critically Examine the Marketing Strategy of Honda in India.
2. Compare and contrast the marketing strategy of Honda with other leading players in the Indian two-wheeler industry including Bajaj Auto and Hero Honda Motors.
