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March 23, 2011
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Honda Motorcycle & Scooter India Pvt Ltd (“HMSI”), the Indian subsidiary of Japan’s Honda Motor Co. Ltd (HMC) projects to sell 2.1 million units in fiscal 2012, up 27% from an expected sale of 1.65 units by the end of fiscal 2011. According to Honda Motor, the Indian two-wheeler market is likely to reach 12 million units by 2012.
HMSI intends to become the #1 two-wheeler manufacturer in India within the next decade. With this objective in mind, Hondo Motor recently sold its 26% stake in India’s Hero Honda Motors to its Indian joint venture partner Hero Investments in order to concentrate on its fully-owned Indian subsidiary.
Consequently, the company has announced the launch of a range of motorcycles, including those in the mass segment of 100cc. Alongside, HMSI has also declared the introduction of its global ‘road-sport' bike ‘CBR 250R’ next month, marking the company’s entry in the high performance 250cc segment. CBR 250R will be available in two versions, one being the standard variant priced at INR 1.43 lakh ($3,116) and the other being the C-ABS variant priced at INR 1.68 lakh ($3,661).
To meet the production needs, the company plans to set up its third plant in India. The second plant, which will begin operations by July-August, is situated at Tapukara in Rajasthan and is expected to take the total annual production of HMSI to 2.2 million units.
Honda Motor’s performance in the third quarter of fiscal 2010 deteriorated significantly from its year-ago quarter. Net income fell 40% to $995 million or 55 cents per share while revenues dropped 6% to $25.9 billion, reflecting deteriorating business in Japan itself. However, performance in the Asian countries, particularly in the motorcycle segment, has improved considerably.
Currently the shares of Honda Motor hold a Zacks #3 Rank (Hold rating) in the short term.
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