Will Honda's new 100 cc bike ride into Hero Honda's forte

Honda Motorcycle And Scooter India is thinking 100 cc. The company will invest Rs 800 crore to set up a new plant and ride into the volume game. CNBC-TV18 reports that scooters may not get too much attention.

Margin pressure is not the only worry that market leader Hero Honda has to contend with - competition is intense, and this time, closer home. Honda Motorcycle and Scooters India will soon ride into the 100 cc segment, which is Hero Honda's stronghold. The company will set up a second plant with an investment of close to Rs 800 crore to play the volume game. But what about cannibalisation?

"There is enough room in the market for both players to co-exist," informs Yukihiro Aoshima, President & CEO, Honda Motorcycles and Scooters India.

HMSI is targetting sales of over a million units by 2010. The company will focus on the motorcycle market, even though its Unicorn and Shine have not seen much success. Scooters may also be put on the backburner though it plans to introduce one new scooter this year. HMSI will also hit the market with high performance bikes in the 500 cc plus segment.