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Honda to unveil one new scooter model each year

The Indian scooter making unit of Japan's Honda Motor Co, which began operations last month, said on Monday that it would launch a new model each year to help lift the country's sagging scooter market.

It also said it expected exports to contribute about 20 per cent of its sales in the next two to three years.

"We plan to do one new model every year...and hope to excite the scooter market," Rajiv Pruthi, deputy planning manager at Honda Motorcycle & Scooter India Pvt Ltd, said.

Pruthi declined to comment on the features of the new models or the timing of the launches.

Honda launched the Activa, a 102cc four-stroke scooter with automatic transmission, in south India on July 1 and will launch it in western India on July 21 and north India on August 17.

The firm has entered the Indian scooter market at a time when sales have been shrinking due to shifting consumer preference to motorcycles that are considered sturdier, more fuel-efficient and have higher resale value.

India's scooter sales fell 28.1 per cent in the last year to March to 901,877 units. They accounted for about 24 per cent of the country's total sales of 3.75 million two-wheeled vehicles in 2000/01, down from nearly 47 per cent in 1994-95.

Honda, fully owned by its parent, makes scooters at its plant at Manesar in Haryana.

Pruthi said the company expected to export scooters to Mexico, Argentina, Turkey and neighbouring Nepal and Sri Lanka, the marketing for which would be handled by the parent's international marketing network.

The company has set a sales target of 50,000 scooters in the financial year to March 2002 and expects to increase that to 120,000 in 2002-03.

It plans to more than double its plant capacity to 250,000 in 2003-04 from 100,000 units a year and has begun a feasibility study for a further increase in capacity to half a million units in 2004-05.

Pruthi said the expansion to half a million units would depend on the growth of the company's sales and the behaviour of the country's two-wheeler market.

He said that once the firm's capacity touched 250,000 it would then expand to other product categories such as step through motorcycles, mopeds and motorcycles.

The scooter venture also has the option to begin making motorcycles after 2004.

Honda already has a joint venture with India's Munjal group, Hero Honda Motors Ltd, that is the country's largest motorcycle maker. It holds 26 per cent stake in the venture.

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