At $11,760, Honda’s CB1000R may seem pricey—until you adjust for inflation. A 1970 CB750 would have run you $1,500, which is about $9,000 in 2012 dollars—not much less than the CB1000R, and it’s heavier, less reliable and a lot slower. So how much performance can you expect out of a bike that would have cost $140 in 1970 dollars—a time when the average wage was $3 an hour?
Meet Honda Motorcycle India’s Dream Yuga, which at 44,642 Indian Rupees has got to be the cheapest Honda ever built, correcting for inflation. That’s about $810, not much more money than even the shoddiest 50cc scooter from the most fly-by-night scooter importer in the USA. As you would expect, it’s a simple machine, with a 109cc air-cooled, carbureted, four-stroke single, good for 8.5 horsepower, but it still has motorcycle styling, a small windscreen, electric start and a real clutch and gearbox. Honda claims a staggering 170 mpg (72 kilometers per liter). Basic transportation at an affordable price point—just what a developing economy demands.
Honda Motorcycles and Scooters, India (HMSI) seems to be working feverishly to catch up to its old business partner, Hero Motors. That’s because Honda Motors (which wholly owns HMSI) and Hero’s joint venture ended recently after 27 years. The Dream Yuga is HMSI’s first foray into the low-cost commuter market, competing with even cheaper products like Hero’s $770 Splendor NXG or Bajaj Auto’s Passion Pro.
So what’s at stake? A market that’s orders of magnitude larger than the USA’s. According to the Wall Street Journal, motorcycle and scooter sales in India grew 14 percent in 2011 to 13.44 million units; 30 times the USA’s 2011 numbers of 440,000 reported by the Motorcycle Industry Council. Hero dominates that vast market with 6 million units sold, and Bajaj sold 2.5 million, but HMSI passed 2 million units and is coming up fast. The company operates two factories in India now, with a capacity of 2.8 million units, but a third factory—with an initial capacity of 1.2 million vehicles—will begin operation next year.
So why should we care? We’ll never see a bike that cheap from American Honda, true. But if you’re wondering why Honda seems to not be putting the effort into selling bikes to you and me like it did in the old days—when there were a myriad of models in each category, not just a few—think of the relative profitability of the two markets. Would you rather make three million nickels or 100,000 dimes? If you’re waiting for the old days to return, don’t hold your breath.