Honda two-wheelers plans to double used two-wheeler network

Honda Motorcycle & Scooter India (HMSI), inaugurated its 100th Best Deal outlet in Mumbai today, and sees strong potential of used vehicles in the two-wheeler industry in India. This is because the replacement cycle of two-wheelers, it says, has come down to three-five years from seven-eight years within a decade. The highly unorganised market is estimated to be around eight million units a year – half the number of new two-wheelers sold in India.

The latest outlet in Mumbai is Best Deal, the brand name for Honda's used two-wheeler business. owned by an existing dealership, Jhaveri Honda. The growth of the Best Deal business, which started off five years ago as a pilot project, has been slow so far. But HMSI wants to up the speed now on. The plan is to open the 200th outlet by March 31, 2018. “One of the biggest barriers we found was the lack of transparency in the system like vehicle history, ownership, maintenance. Selling isn't a problem in the market, but buying is because of the lack of transparency. Considering these challenges, we worked our own 'To do' list. Very clearly, it has to be organised. To make it organised, we made a separate vertical within the sales and marketing division at Honda. We took support from the after-sales team also so that we can work out the checklist points", says Yadvinder Singh Guleria, senior vice-president (sales & marketing), HMSI.

From eight-ten used two-wheelers a month during the first year of starting the Best Deal business, Guleria says the current average monthly sales is around 2,500 two-wheelers a month. He also adds that during the April-June quarter of this year, the business saw a 25 percent growth over the same period last year. Best Deal outlets cover 70 cities in 19 states. All outlets are owned by Honda dealers of new two-wheelers. Till date, 45,000 two-wheelers have been sold through the Best Deal network.

 As for the new two-wheeler business, HMSI is looking to report another 'all time high' in terms of sales during this year. The second production line, recently commissioned in its Gujarat plant, is helping the company reduce the waiting period for the Activa, and thereby reducing the risk of losing customers to other brands. Guleria won't divulge any figures, but he says there's some challenging target for this year's festive season which he is confident of being the best-ever for HMSI.