Honda is angling for a bigger piece of the emerging markets transport business — and heading off low-cost local competitors — with a cheap motorcycle.
The new $600 bike is aimed at China, Latin America and West Africa, where currently Honda’s (HMC, quote) cheapest offerings are approximately 15% to 25% more expensive.
While motorcycle sales in North America and Japan plunged last year, they are still climbing in the world’s emerging markets as relatively vast populations move into the cities and join the global middle class. Motorcycles in particular are considered an “entry-level” vehicle and so cost is critical in this space.
HMC executives note that their company “needs to be right there” at the low end in order to compete with Chinese and Indian rivals like Mahindra & Mahindra, which are ramping up sales as fast as they can pump out bikes.
Tactics like this demonstrate that HMC is still a great global auto and transportation play — true emerging markets potential, only based in Japan. (And, of course, the ADR trades in the United States.)