Rural Vertical to help Honda boost sales in India

Honda Motorcycle and Scooters (HMSI) plans ‘rural vertical’, a new strategy with which they hope to embark on a new direction to flank market leaders Hero MotoCorp. Hero MotoCorp has a deep rural market distribution setup which has stood them in good stead and Honda would also like to follow the same path to success.

honda activa 125 launchHonda has extensive plans afoot for the year ahead. HMSI intends to boost its 100cc bike segment and increase its dealer networks by adding new sales points in the coming year of which 70% will be in rural areas across the country. Honda hopes to increase its touchpoints from a present 2,850 to nearly 4,000 by the end of FY 15. This figure is still way off from the 5,500 to 6,000 touchpoints of their competitors.

Concentrating on rural vertical will not only cater to the rural network but also to rural communication and receipt of feedback from this segment of buyers which will in turn be passed on to the company’s R&D. This approach to tackling rural areas is completely different from its urban strategy. The concentration on rural markets is being felt right upto its top level with Global President and CEO of Honda Motor Takanobyu Ito visiting India in early April to open a zonal office in Varanasi. He travelled 150 kms into the rural areas of UP, Varanasi, Agra and Jaunpur as part of this strategy.

Rural markets account for 30-33% over overall sales and with this added concentration of rural vertical, rural share is expected to receive a boost to 45% over the coming months. 15 personnel will be appointed to oversee strategy, communication and implementation of this rural vertical which the company expects to be a key lever of growth in the months ahead.

via Economic Times