Honda 2007 Annual Report Download - page 16

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Motorcycle Business
14
8,000
6,000
4,000
2,000
0
50
40
30
20
(Thousands of units) (%)
01 02 03 04 05 06
Other companies
Hero Honda
Honda Motorcycle and
Scooter India
Honda’s share
Source: Honda
(Reference) Units sold on a wholesale basis
Overall Indian Market and
Honda’s Market Share (Year)
Initiatives in Emerging Markets
800
600
400
200
0
50
40
30
20
Apr.
06
May Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan.
07
Feb. Mar.
* Units sold on a wholesale basis
(%)
Monthly Sales and Market Share over the Past Year
Source: Honda
(Thousands of units)
Other companies
Hero Honda
Honda Motorcycle and Scooter India
Honda’s share
CBZ Extreme
CD Deluxe
1. India—Honda’s Largest Market
Ongoing Market Expansion, but Increasingly Challenging
Competition
Against the backdrop of overall robust economic performance, the size of
the Indian market continued to expand since motorcycle makers launched a
number of highly competitive models. Honda’s unit sales* in fiscal 2007 rose
13.3%, to 3,930,000 units, from the previous fiscal year. This total represents
the combined sales of Hero Honda Motors Limited (Hero Honda), an affiliate
accounted for under the equity method, which saw an 11.4% increase in
sales from the previous fiscal year, to 3,239,000 units, and Honda Motor-
cycle and Scooter India Private Limited (Honda Motorcycle and Scooter
India), a consolidated subsidiary, which experienced a 23.0% rise in sales to
691,000 units. From the second half of fiscal 2007, sales benefited from the
November 2006 launch of the new CBZ Extreme and the December intro-
duction of full model change versions of CD Dawn and CD Deluxe, which are
two of the core models, spurring a recovery in Honda’s market share.
* Wholesale units sold locally
Boosting Production Capacity to Meet Growing Demand in the
Long Term
Demand in India continues to expand for motorcycles, which are an essen-
tial mode of transportation in this market. Consequently, by approximately
2010 total demand is expected to rise to the 12,000,000-unit level. To meet
this growing demand, Hero Honda is adding to the annual production
capacity of 3,900,000 units at its two existing plants by building a third plant
with an annual production capacity of 500,000 units. In September 2006,
Honda Motorcycle and Scooter India also raised its annual production
capacity to 1,000,000 units.