Mumbai: Honda Motorcycle and Scooters (HMSI) is setting up a "rural vertical" in a bid to flank market leader Hero MotoCorpBSE 0.62 % which boasts of a deep rural distribution network.
ETlearns that Honda plans to spruce up its 100cc bike segment and create a new entry point for HMSI in India even as it builds its distribution network by adding 1,000 sales points within a year, of which 70% will come from the fast growing hinterland markets.
Y S Guleria, VP, sales & marketing, HMSI says the new rural vertical will be a key lever of growth going ahead.
"It is a new direction. With a dedicated rural vertical we will be able to achieve more. This vertical will not only take care of rural network but also rural communication, and give key feedback to R&D. Its approach will be completely different from the urban markets. There will be close to 15 people who will oversee the strategy, communication and implementation," Guleria says .
For HMSI, currently, the rural markets contribute about 30-33% of its overall sales. With the addition of rural vertical Guleria says, aim is to take up the rural share to 45% over a period of time. The aggressive network expansion is the need of the hour, claims Guleria. He says as against the competitors 5,500 to 6,000 touch points, HMSI has just reached the half way mark to 2,850 touch points, which will grow to almost 4,000 by end of FY15.
The mass market foray with Dream Series for HMSI so far has not matched the high expectations of the company. In the span of 18-24 months, the Dream Series (Neo and Yuga) has managed to sell a cumulative of 7.5-8 lakh units.
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