Honda launches Dream Neo to overtake bike ex-partner Hero

Honda Motorcycle and Scooter India is continuing its push into the entry-level commuter bike segment with new launches as it seeks to overtake its former partner Hero MotoCorp in in market share over the next three years.

After launching the 110cc Dream Yuga last year, it today announced the launch of another 110cc bike, the Dream Neo.

Honda officials said the Neo will compete with Hero MotoCorp's largest-selling motorcycle, Splendor. It is priced just about on par with the Splendor at Rs43,150 (ex-showroom, Delhi).

Honda aims to sell 3 lakh units of the Dream Neo this year. Its overall target for all 'volume segment' models, including the Dream Yuga and the CB Twister, is eight lakh units for this fiscal.

As the competition between the two former partners hots up, Hero MotoCorp has recently come up with a five-year warranty on all its vehicles.

''It is very unusual for Hero to come out with a scheme in the middle of the month. It could probably be a counter-measure before the launch of the Neo,'' said a Hero MotoCorp dealer. 

''In the two-wheeler segment, a shift in choices can happen even with a price difference of Rs1,000-1,500. We are not saying that cannibalisation won't happen, but it wouldn't be drastic,'' said Y S Guleria, vice-president of sales and marketing at HMSI.

Honda is expected to launch one new two-wheeler model every quarter. It is confident of selling 39.30 lakh units this fiscal, up from 27.5 lakh units last fiscal.

''Our booking numbers jumped almost 50% this Gudi Padwa compared to last year,'' said Guleria.