Chennai: While two-wheeler manufacturers in India continue to demand a larger cut in the excise duty, Gurgaon-based Honda Motorcycle and Scooter India Pvt Ltd (HMSI) has decided to reduce the prices of its models.

Passing on the benefit of the four per cent excise duty cut to the customer as announced by finance minister P Chidambaram in his 29 February budget speech, HMSI has decided to cut the prices across its motorcycle and scooter models by Rs800-Rs1600, according to N K Rattan, divisional head-sales and marketing.

Launching the Aviator, the company's latest premium scooter model, Rattan said this fiscal HMSI would reach a turnover of Rs30 billion ($742.76 million), selling 880,000 units (610,000 scooters and 270,000 motorcycles).

'Our target for the next fiscal is one million units, with a sales mix of 700,000 scooters and 300,000 motorcycles,' said Shinji Aoyama, president and chief executive officer of the company.

The company is targeting 100,000 units of Aviator sales next fiscal. The 102cc automatic geared scooter comes in two variants. The standard variant features a drum brake, and deluxe version sports a disc brake.

The scooter is available in five colours – 'Rebel Red Metallic', 'Berry Purple Metallic', 'Space Silver Metallic', 'Monsoon ray Metallic' and 'Pearl Igneous Black'. It is priced between Rs43,000 and Rs47,000.

Rattan said, ''There is a decline in the sales of 100cc bikes while we are experiencing good growth both in the motorcycle and scooter segment.'' He added that banks and other institutions had no problems in lending for purchase of higher-powered bikes, comprising 125cc and above.

The HMSI product portfolio consists of four scooters (Activa, Dio, Eterno and Aviator) and two motorcycles (Unicorn and Shine). The company sells around 17,000 units of Shine and 9,000 units of Unicorn every month.

Rattan also opined that the arrival of small cars priced at the Rs100,000 level would not impact high-powered two-wheeler sales. ''The on-road price of Tata Nano will be around Rs130,000, which is two to three times the price of a motorcycle. Further, there is the issue of mileage and rising fuel cost. The demand for two wheelers will be there,'' he said.

Rattan said that the 100cc segment comprises nearly 50 per cent of the total two-wheeler market, and that HMSI would surely enter this segment. Adding to that, Aoyama said the company would launch a new motorcycle during the first half of the next fiscal, though declining to elaborate on the model specifications.

HMSI will also expand its distribution network, adding 40 more main dealers to its existing number of 300. ''Our main dealers have sales branches. Taking the branches into account, our total sales network now is around 500 outlets and this would go up to around 650 soon,'' Rattan said.