Honda car, bikes all-set to steal the show in 2013

Bertrand D'souza, deputy editor, Overdrive, shares his view on how the auto industry will move in 2013. He also talks about players in both the four-wheeler and two-wheeler segment who may ride the year in driver seat.  

Also read: Huge discounts fail to boost auto sales in Dec

Below is the edited transcript of his interview to CNBC-TV18.

Q: The competition is heating up in the 100 CC segment and it is becoming difficult to attract customers. How will individual players pan out? Do you think Mahindra will be able make a mark in this segment and Bajaj can hold the price as mentioned by Rajiv Bajaj or will Honda come and eat everything?  

A: Honda is making a big step and is gunning for this segment because ultimately this is a bread and butter segment. Bajaj is doing phenomenally well with Discover in the market. Recently, we saw that the sales of Discover have overtaken sales of Hero Honda Splendour which was the leader in the segment from over a decade.

Mahindra is the last player in the segment and they have entered the segment very late. Last year, Mahindra launched Stallio in the market but it did not do well and was not properly received by the customers. Mahindra took a very brave step, they pulled back the motorcycle, went back to the drawing board, re-engineered the product and now they are out with a new package, the new 100 CC motorcycle the Centuro and the Pantero. I hope that boards well for them. It just makes the market a little more interesting in terms of choice. The consumer at the end has much wider choice.

Q: Who will prevail and in what fashion?

A: In the long run players like Bajaj, Hero Motocorp and Honda will prevail in the segment. They are established players and have old legacy. These players also have engineering legacy in terms of 100 CC motorcycles. Essentially, the scope is limited for innovation and expansion in this space. Mahindra is trying its bit; they have given the central locking system for the 100 CC motorcycle a feature which is never heard of.  This small innovation might appeal the tier-II or tier-III towns.     

Q: Between Bajaj Auto and Hero MotoCorp which company is more strongly positioned? Year to date FY13, Hero MotoCorp has gained the maximum number of market share. Do you think that trend will continue or will other players get aggressive and try to hold where Hero is?

A: The other players will get aggressive. Honda is getting very aggressive in the segment. Honda is a market leader in 150 cc segment and scooter segment. Honda is targeting this segment with 100 CC Dream Yuga which they have launched few months back. Honda is doing good business in this segment and the company will focus their attention in that segment for the next 1-2 years.    

Q: Honda has been able to prevail in the car market; do you think they will be able to therefore capture the two-wheeler market especially in this segment where price is a big player?

A: Yes, because the relationship they have enjoyed with Hero Motors for years. So, Hero Honda as it was known previously and so they have got that legacy with them. So people are aware that Honda provided engineering, technology and innovation whereas Hero provided the backend support.

Q: Honda was not a price player in its segment in cars. Can it prevail without being a price player?

A: Not necessarily. Many consumers in the segment are looking at Honda as the manufacturers of car and they are not expecting any fallback from there on to the two-wheeler segment. Honda has already shown to the consumer that they are capable of very good engineering, very good product lineup, innovative as well. 

People look at them in the sense that they manage to reinvent the entire scooter segment. There was a time when scooter segment died out in the market and Honda managed to revive the entire segment with Activa, Dio and Aviator and today we are seeing a massive influx of scooters in the market. So people are looking at them for that kind of innovation and they are delivering on that as well.

Q: What about macro picture. What feedback do you get from dealers in terms of all of these players having to push their sales or there is a gradual pickup?

A: Dealers have to push sales as more players are coming into the market and the competition is getting aggressive. With Mahindra's entry we may see some price cuts in the near future. Mahindra is renowned for being a people player and they always address the masses and the products they had in jeep segment especially have touched the masses. So they are hoping some of that is a fallback on to the two-wheeler segment as well.

Q: It could be tough for Rajiv (Bajaj) to keep his word. He may have to bow to competitive pressures?

A: He will probably have to bow down to peer pressures.

Q: What are the other interesting segments in the two-wheeler space where you are seeing too much competition or where you are seeing a run away winner either ways?

A: Now we are not seeing a run away winner any more. The 125 CC segment has caught the fancy of many consumers. This segment has more power gains compared to 100 CC, a few efficiency gains, bit more comfort and styling. Another segment which is seeing lot of action is the 200 CC segments where the Pulsar came in, Bajaj Auto bought KTM Duke in the market.

We hope to see lot of action in this segment in the near future. Honda, HeroMotoCorp and Yamaha all plan to come up with their products in this segment. Yamaha has been a smaller player in this entire battle in the two-wheeler industry. Yamaha has been coming out aggressively in future with a new product line up and that will make things a lot more interesting.

Q: Which car company will you watch out for in 2013?

A: Honda would be the company to be watched out for in 2013. Interestingly, they did not had diesel cars in their portfolio yet they were able to stand strong with their petrol product line. Though their sales dropped given the high petrol price.

But people appreciated them for the quality and features. Honda is all set to launch Amaze, the first diesel car, in next few months. Amaze is an extension of Honda Brio hatchback. This car marks the beginning of Honda's diesel plan for India and they are going to go along way with that.

Q: Finally, is the worst over for TVS or the battle still continues and we are going to see the worst for the company?

A: We will see the worst for the company, they do have plans. However, the strategies have never been in place. They have always been the last players to enter the segment and they have sort of gage the waters and waited and seen how things have developed in the market before launching their own product, though in most cases they have had a product ready in the pipeline or rather just waiting for someone else' launch in the same segment and then we will come in at a latter stage once everything is established by everybody else, which was sort of a wrong strategy.

They needed to attack the market, you had a product ready, you should attack the market early on, got first-mover advantage and that hast not happened. Hopefully, they will change that and come out with a product line-up that will surprise everybody.

Q: So we are in for interesting times?

A: Yes. This year should be a big year.