Steven17
join:2008-06-16
Austin, TX
|  [Info] Honda bets for Motorcycles over cheap Cars
Most of the world's global auto giants are rushing to supply low-cost cars to the masses. But Honda Motor Co. is taking another route.
The Japanese company, along with its local partner, produced more than half the eight million motorcycles and scooters sold last year, and it probably has the most to lose if its competitors' strategy works. Rather than betting the consumers will buy their first cars if they are cheap enough, Honda is promoting its motorcycles and scooters for entry-level drivers and reserving its cars for India's burgeoning middle class.
It is hard to imagine that Indian customers would buy cars just because they are cheap, and accept the fact that quality is sacrificed. People love to get a second scooter, a Honda Aviator, because it could more easily navigate the city's traffic congestion.
As growth slows in developed countries, auto companies are increasingly relying on fast-growing emerging markets like China and India to pick up the slack. While sales growth in the U.S. and Japan are declining, CSM Worldwide Inc., a market research firm, expects auto sales in India.
The Indian car giant Tata Motor Ltd. is hoping to persuade millions of motorcycle drivers to upgrade to their first four-wheel vehicles by launching a super-cheap car costing roughly $2,500 in the fall. To cut costs, Tata has done everything from equipping the four-seater, called the Nano, with just one windshield wiper to stripping out the radio and air conditioning.
Renault-Nissan, Toyota Motor Corp., Hyundai Motor Co., Volkswagen AG and Ford Motor Co. are also racing to come up with their own small budget vehicles.
Honda and its Indian partner, Hero Honda Motors Ltd., expect the total Indian two-wheeler market to nearly double to 15 million units within a decade, which would make it three times larger than the projected car market.
Mr. Dick Weekley, a well-known personality in US, interested in cars heard his friend in the Board of the Federal Reserve Bank of Dallas says, “While the popular Civic may be considered an entry-level car in the U.S., Honda is marketing the sedan in India as a luxurious vehicle with a futuristic cockpit and ultramodern style”. |
