Hero MotoCorp’s fight to survive at the top of the Indian two-wheeler market is likely to get tougher.
According to a Business Standard report, its friend-turned-foe Honda Motorcycle and Scooter India (HMSI) is planning to take on the country’s top two-wheeler maker in its home turf, the entry level segment.
With an eye on the 70 percent market share Hero enjoys in the segment, HMSI is planning to roll out a bike priced between Rs 30,000-Rs 40,000, the report said.
This is going to the cheapest product from the HMSI. As of now, Honda Dream Yuga priced about Rs 44,000 is its cheapest model.
The competition in the Rs 30,000-Rs 50,000 segment has been hotting up.
Bajaj Auto had earlier this month launched Discover 100T, its new 100 cc model, in direct competition with with Honda Dream Yuga and Hero Passion Pro. The Discover 100T is priced at Rs 50,000.
As rivals eye the mass market segment, Hero’s fight to remain the most popular brand is getting tougher.
The company has already been under pressure after its split with Honda.
The split has created uncertainty over Hero’s research and development capabilities and the company has to now spend more on marketing products and in brand building, a Firstpost article had earlier said.
This is impacting its margins.
In December 2012, Hero’s EBITDA (earnings before interest, tax, depreciation, tax and amortisation) margin declined 305 basis points on year to 12.6 percent.