Honda Launches Dream Yuga in IndiaNews | May 25, 2012
HMC or Honda Motor Co. recently launched 110cc Dream Yuga for India, & it is their cheapest motor bike ever. This move was trigged by the goal of the company to double their revenues that were generated from motor cycle sales in India & to compete along with Hero MotoCorp. Limited.
This company will now focus on market of India for next ten years with expected export increase to 150,000 motor bikes by the year 2013 from about 111,000 bikes in the last year. This company expects about 30 percent of the revenues from the motorcycles to get generated from India by the year 2020 as compared to current level of 13 percent. This new bike is priced @ INR 44,642 (or US $819) in showrooms of New Delhi. This company expects sale of 300,000 units for Dream Yuga in the year 2012.
Motorbikes are preferred most in India due to the fuel efficiency & low cost. 2 wheeler sales had shot up by 14 percent to 13.44 million units in last fiscal year for India. The other motor cycle makers too are expanding in to emerging lucrative markets including India. For example, Yamaha Motor Co., will be starting construction of the new motor cycle factory at Tamil Nadu. With the new factory, which will start operating from 2014, Yamaha will be having production capacity of about 2.8 million units by 2018 for India.
Suzuki Motor cycle also recorded improvement in the sales to about 30,635 units for April 2012 as compared to about 29,362 units in the year April 2011. This company has plans for setting new factories for increasing capacity of the bikes in India to one million by the year 2014.
Honda Motor Company is the leading maker of automobiles & largest maker of motorcycles in world. Honda is internationally recognized for their expertise & leadership for developing & manufacturing huge products variety which incorporate the internal efficient technologies of combustion engine ranging from the small engines general purpose to the sports specialty cars. It’s the 2nd biggest auto maker in Japan, after Toyota Motor Corp.
Honda Motor retains currently Zacks #2 Rank, which translates in to short-term (1 – 3 months) rating of “Buy”. This automaker expects revival in the sales & profits in the year 2013, based on te higher revenues, model favorable mix & effective reduction measures of cost. But, it is facing some difficulties for obtaining parts from the suppliers because of disaster in Japan & flood in Thailand. Considering all these factors account, we have currently long-term (above 6 months) recommendation of Neutral on stock.