Two Wheelers: Hero Honda Motors Ltd expects sales to continue to grow, India

Hero Honda sees growth in tough 2009/10

Hero Honda Motors Ltd expects sales to continue to grow in the 2009/10 fiscal year, in spite of a tough economic and financing environment.

Hero Honda, 26-per cent owned by Japan's Honda Motor Co, expects revenue growth to slow in the fourth quarter of the 2008/09 fiscal year, from 11 per cent in April-December to "high single digits" for the full. The firm is looking to maintain growth and continue to gain market share in the fiscal year starting in April by focusing on the rural market and continuing to carry out an aggressive marketing campaign.

One of the biggest problems Hero Honda faces is banks' unwillingness to lend to people who purchase two-wheelers. Hero Honda reported a forecast-beating 7.1 per cent rise in net profit for the December quarter, helped by falling commodity prices, a cut in excise duties and sales in rural areas.

The company does not plan to cut staff or, conversely, to invest in new capacity. It will continue to target rural markets.

January 31, 2009
Source: Economic Times
URL: http://economictimes.indiatimes.com/News/News_By_Industry/Auto/Two-wheelers/Hero_Honda_sees_growth_in_tough_200910/articleshow/4057746.cms