Honda Dream Yuga: Will Chinese production thwart Japanese expansion in India?

06 January, 2012

As Japanese automobile giant Honda scooters plans to compete its former partner of 27 years Hero Motors in India in two-wheeler segment, will Chinese production dampen the company's aggressive expansion plans?

AT THE ongoing Delhi Auto Expo 2012 it was not just the concept cars and the much awaited minis that stole the show. Another showstopper at the event was the 110 cc Chinese manufactured bike called ‘Dream Yuga’ from the sheds of the Indian subsidiary of Honda Motors. Honda motors, which split with its partner of 27 years Hero MotoCorp. With this move, Honda is clearly taking on its former partner that has a massive share of 46 per cent in the Indian two wheelers market.

Honda, which is looking forward to tap the Indian market with its low cost two wheeler, the Dream Yuga will be launched in May 2012 and was one amongst the seven variants that was unveiled at the Delhi Auto Expo 2012. Officials from the company have reportedly told The Economic Times that the planning of tapping the Indian market with its cheap scooters is on.

But the actual game changer is something else. The Japanese giant, which operates in India through wholly-owned subsidiary Honda Motorcycle & Scooter India (HMSI), hopes to sell 125cc made-in-China models with an ex-showroom price in Delhi of a little over Rs 30,000 - almost Rs 4,000 cheaper than the CD Dawn and Rs 17,000-18,000 cheaper than the Super Splendor, as reported by the Economic Times. Through this move, they hope to tap the lucrative market in the range of relatively small engines and low price bikers.

However, what needs to be taken into consideration is; will Chinese made Honda scooters really click with the Indian populace? Chinese products, which do not have a good reputation in the country may jeopardise the future of Honda and its stature in India. The Japanese firm that has aggressive expansion plans for the Indian market will be taking a huge risk notwithstanding the fact that its production capacity cannot be questioned.