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The Launch

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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.

The Indian two-wheeler industry, traditionally considered a scooter market, witnessed a gradual migration towards motorcycles from the 1990's. When HMSI was incorporated in late 1999, the Indian motorcycle market was booming, compared to the scooter market.

Still, SI announced that it would initially concentrate only on the scooter market and would enter the motorcycle market in 2004, the year when the HMCL joint venture agreement with the Hero Group2 was due for revalidation. HMSI was credited for reviving the scooters market in India. Within three years of commercial operation, HMSI emerged as the market leader in the scooters segment.

The company's scooter models included Activa, Dio and Eterno. Appreciating the efforts of the company, Veeshal Bakshi, an analyst with Financial Express, a leading business daily in India, said, "Honda has stirred the Indian automobile markets in many ways. Its wholly owned subsidiary Honda Motorcycle and Scooter India (HMSI) single handedly revived the two-wheeler scooter market, at a time when even the likes of Bajaj were unable to prevent the slide in scooter sales."3Background Note

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.

HMCL planned to introduce its own two-wheelers in the market. power generators and several new models of motorcycles and motor scooters. Soon. In 1959. was produced in 1947. In 1963. Honda's first motor cycle. D-type two stroke 98cc. American Honda launched the "You meet the nicest people on a Honda" advertising campaign. UK. Malaysia and cumulative motorcycle production reached 10 mn units by 1968. Honda's first product. The American venture started modestly with a staff of six and sales figure barely touching 200 motorcycles. out board motors. Indonesia and Brazil. In October 1999.The idea was to develop and later produce small two-cycle motorbike engines. Activa Launched in 2001. which revolutionized the US motorcycle industry. HMCL was incorporated with a capital of one million yen. an A-type 50cc bicycle engine.. in a major strategic initiative. New production units were started in Thailand. A 102 cc scooter. In 1948.. A few years later. compact cars. Honda Activa was the first scooter model of HMSI for the Indian market.. HMCL entered the Philippines. During the 1970s. was produced in 1949. The company made an initial investment of Rs 3 bn to establish a plant with an annual production capacity of 200. During the 1960s.. After coming out of the joint venture with KEL. HMCL established HMSI. Honda established motorcycle assembly plants in Germany and Belgium. the company started to design and produce lightweight motorcycles. In the early fifties.000 units. the American Honda Motor Company Inc. Activa was specially designed keeping in view the needs and preferences of Indian consumers . the headquarters of the company was shifted from Hamamatsu to Tokyo and the company got listed on the Tokyo Stock Exchange. HMCL expanded its product line by introducing light trucks. was established in Los Angeles.

Hence. novel promotional campaigns and developing an extensive distribution network. COO and MD. Dio Dio was launched in 2002 as the first motoscooter in the Indian market.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.. Confirming this. HMSI said. Lower cost competitors Economic slowdown        .. Looking Ahead After the launch of Unicorn... We would like to have full line-up covering right from the entry level low-cost motorcycle to a motorcycle for people with strong taste and fun elemeSTRENGTHS       Quality and customer satisfaction High R&D like Hybrid Technology Innovation Market share leadership Strong brand equity Unique products WEAKNESSES High Price (latest technology being used in Honda products it is difficult to keep the prices low. rather than putting major efforts into brand building.. 'Honda' was already a household name in India. "The Unicorn is just the beginning. Mid segment economical small Cars. HMSI announced plans to introduce a 135cc motorcycle in 2005.) Reputation for being underpowered. THREATS Too many competitors in automotive industry... Yukihiro Aoshima.. HMSI's marketing strategy emphasized on offering innovative products at competitive prices. OPPORTUNITIES Progressing low emission vehicles and alternative power sources. The Marketing Strategy Thanks to the success of its joint venture with Hero Group and KEL..We do not want to restrict ourselves to any specific category..

  Expanding market size of compact cars ( currently it is around 76% ) Regaining the lead of low emissions is a risky proposition as other companies are .