Back in the 1980s when the Hero group, makers of the then ubiquitous Hero cycles and the Pacer and Panther mopeds tied up with Honda to make motorcycles, they announced the collaboration as the dawn of a “Brave New Horizon”. The collaboration was path breaking in many ways. The world’s no.1 in motorcycles had collaborated with the world no.1 in cycles. For the first time ever in India a 100cc four stroke engine featured in a motorcycle and put to rest all suspicions about its efficacy that came into being because of a notoriously unreliable 350cc four stroke engine in a motorcycle called the Enfield Bullet. It also ushered in the previously unheard of mileage figure – 80 kmpl. It kick started a new version of the Indian obsession with fuel consumption. Nothing less than 80 kmpl was acceptable anymore. The Hero Honda CD100 had arrived and how. It had styling that could be credited to someone who failed all the examinations in a design school. It sounded like a Deepavali ladi, had no visible frame and the engine looked like it could fall off any moment. But it was anything but all that. Despite its ungainly appearance, it was bullet proof (pun not intended) and more importantly kept its promise about mileage.
When talking about Maruti people claim that it is the car that put India on wheels. I disagree. It was the Hero Honda CD100, a product of a collaboration made in heaven, that really put India on wheels and offered to the common man an affordable alternative to the erratic public transport system that existed then and continues to exist even today. The fill it, shut it, forget it ad campaign became the new mantra that was chanted by every aspiring motorcycle rider and he went straight to a Hero Honda dealer and got himself one. The appearance of fragility of this light motorcycle actually belied a ruggedness and hardiness. Hero left all the technology and design work to Honda and concentrated on marketing and since their forte was always the rural areas (their expertise in rural marketing was a result of their selling of cycles and the Panther and Pacer mopeds which were sold mainly in the rural hinterland) they took care to see that they had as much rural penetration as they did in urban markets.
Then the launch of the Splendor and later the Passion created history, albeit slowly and gradually. The Splendor and the Passion were the two motorcycles that ensured that sales of the Hero Honda company went through the roof and left competition far, far behind. There was only one instance for a couple of months when Bajaj overtook Hero Honda in motorcycle sales. That galvanized Hero Honda into pushing their products forward and the competition backward in the market place. The city slickers and boy racers mocked Hero Honda. They said Hero Honda was sticker company and that their sense of aesthetic was absolutely favouring the garish and unsightly. That did not seem to deter Hero Honda buyers, both urban and rural, from buying Hero Honda motorcycles. Today the company which is renamed Hero MotoCorp but sells the same brand of motorcycles sells the double the number of motorcycles per month than does its competitor Bajaj. Some years ago Hero Honda did the unthinkable and the unforeseeable, which is it overhauled Honda as the largest motorcycle manufacturing company in the world. So why did this JV come to an end? We will come to that, but a small detour first. This detour will help us understand the Honda story and mindset better.
At the same time when Honda entered into a joint venture with the Hero group, it also entered into another joint venture with Kinetic Engineering to make scooters which were two strokes and featured a gear less CVT transmission. It introduced to India the first proper scooter that had the twist and go feature. While the macho men (especially up North) thought this scooter was for sissies, the Kinetic Honda (as the scooter was called) achieved another first. It put more and more of India’s young women on wheels. A centrally mounted engine made for ease of balance, the CVT meant ease of driving and like all Honda’s it also had ease of maintenance. These qualities slowly started drawing even men especially when they were reaching middle age towards the Kinetic Honda. Honda’s JV with Kinetic was slightly different from the one with Hero. Honda’s equity in the JV was higher than in Hero Honda. Towards the end of the last century, Honda held nearly 64% of the Kinetic Motor Company. It had more people on the Board of Governors. It looked as if Honda was all set to take over Kinetic. Just then Honda did the unthinkable. It sold its share to Kinetic and exited the joint venture.
Two years later in the new millennium it set up its own subsidiary in India, the Honda Motorcycles and Scooters India. It had an agreement with Hero Honda. As per this agreement Honda would not make motorcycles for at least three years. But it would make scooters. In doing so Honda yet again did a first. It introduced the Activa, a four stroke 100cc scooter with CVT and all metal body, the rear of which could be lifted for easy access to the engine. More importantly it did not look feminine. India’s burgeoning economy increased the size of the middle class considerably and this meant that more and more people were buying their own private vehicles, leading to increased traffic and as a consequence chaotic roads. This in combination with no driver etiquette and lack of adherence to road rules (because most drivers and riders procured licences without passing any driving test or any test for that matter) meant that traffic snarls and crawls were becoming increasingly the order of the day. At this time a four stroke scooter with a CVT and decent mileage made more and more sense. And so at a time when everyone thought that the scooter segment had died and when the traditional scooters were no longer being bought, Honda single handedly revived the scooter market.
Bajaj tried to hit back with the Sapphire and later the Wave and failed miserably. A little earlier TVS tried launching a 150cc geared four stroke scooter called the Spectra, an excellent product that just did not take off. The Activa began the process of putting Indians, especially men, back on scooters. Even women who contributed in great measure to the success of the TVS Scooty range started moving to the Activa. The result; long waiting lists. Honda also launched a plastic bodied and sporty scooter featuring the same mechanicals as the Activa and called it the Dio. It did not do as well as the Activa but sold in decent numbers. Honda then decided to attack the cow belt with the Eterno, a 150cc geared, all metal bodied scooter featuring a four stroke engine. The scooter did well in the markets it was meant for but Honda pulled the plug on this scooter in a few years. It saw no point in making scooters for a small number of people when there were long queues building up for the Activa. Honda also introduced a 110cc scooter which looked and felt more upmarket than the Activa and called the Aviator. It continues to do well in the market. A couple of years ago, the Activa was upgraded to the same 110cc engine and demand continues to be unabated with waiting periods stretching up to 9 months.
Once the three year period where Honda promised it would not make motorcycles was over, it launched its first motorcycle, the 150cc Unicorn. The motorcycle had all the Honda traits. A silky smooth engine, bags of torque, decent power, a monoshock suspension and rugged looks all contributed to its bullet proof reliability. This introduction of a 150cc motorcycle was for two reasons. One to not compete with Hero Honda’s products and two to take on Bajaj that was going great guns with the Pulsar 150. Later on Honda introduced the 125cc Shine. Strangely a year and a half ago, Honda added the CB prefix to all its motorcycles. The Unicorn was CB Unicorn, the Shine became CB Shine and it also introduced an upmarket 110cc CB Twister and then a variant of the Unicorn called the CB Unicorn Dazzler. People were mystified by this until the beginning of 2011, when the pieces of the jig saw puzzle started falling into place. Honda was exiting the Hero Honda JV. It wanted to keep the CB and CD as its trade marks and it was in preparation for this that the CBising was happening.
This means that Honda, after March 2014, will prevent its erstwhile JV partner Hero from using CBZ and CD Dawn and CD Deluxe branding on their motorcycles. At the Auto Expo Hero MotoCorp showed all its offerings sans the Honda name and the CBZ Xtreme was shown as just Xtreme and the CD Dawn was shown as HF Dawn. And talking of the Auto Expo, let us see what Honda did at the Auto Expo 2012. After all this series of articles is about what can be inferred from the activities of companies at the Expo. Honda’s display of cars was almost pathetic. No new cars, no new launches, no concepts, nothing. This was due to the fact that Honda suffered badly once because of the tsunami in Japan and the second time because of the floods in Thailand that destroyed its plants and reduced their vehicles to junk. But when it came to two wheelers Honda at the Expo was aggressive and unstoppable.
Hitler would have been proud of Honda’s efforts at the Expo. Honda simply blitzkrieged competition with a dazzling array of products from the humble scooter to its flagship and updated for 1012 CBR1000RR Fireblade. Last year Honda issued a serious warning to Bajaj and Hero. It launched the CBR250R at a price that was half that of the Ninja250R’s and it also provided it with ABS. The CBR250R had runaway bookings which were triple that of the number of Ninjas that Bajaj moved in one year. Out of the blue at the Expo, Honda showed the CBR150R and announced its intention to launch this motorcycle by March. This is a warning to both Bajaj and its arch rival the world over Yamaha. If the pricing of the CBR250R is anything to go by, the 150cc version will be well under the R15 that Yamaha makes. But this is not all. Honda has shown that it is now ready to go for the jugular of the Indian two wheeler market. It showed its first major update for the Dio scooter which now looks even more gorgeous and sporty. It has also unveiled its first mass market commuter the Dream Yuga and displayed it alongside the first motorcycle that Honda every built, the Dream.
A lot of people have pooh poohed the name Dream Yuga. Behind what seems to a ridiculous name lies the ambition and intent of the company. Yuga can have many translations in English. But Honda seems to be using it to convey the idea of an era. The original Dream motorcycle started the Honda domination in the world. Honda is probably looking at the Dream Yuga starting the Era of Honda in India – read that as Honda becoming number one in India. It has no other option. After ending its JV with Hero and with Hero deciding to build its own brand without waiting for the end of March, 2014 it is obvious that the world’s largest motorcycle manufacturer in the world, for the first time in many decades will not be Honda nor will it be one with the Honda name appended to it. So Honda’s becoming number one in India is not just about India. Hero had overtaken its old partner in sales to become number one in the world. Honda has to become number one in India in order to reclaim its status of world number one in motorcycle sales. Honda knows that it has capacity constraints and therefore is in the process of setting up new manufacturing plants in different locations in India so that not only will there be more capacity but also distribution from factories and logistics will become simpler and more efficient. What Honda wants, Honda gets, so ladies and gentlemen whether you like it or not, get ready for the Honda Era or the Honda Yuga. How nice for Honda that it coincides with the new century and the new millennium.