Hero Honda Motors, the country's largest motorcycle maker, has expressed confidence of maintaining its industry leadership by achieving double-digit growth in volume and revenue and much higher growth in profits during the next three years.

The company has also outlined a "volatile but positive" outlook for the domestic two-wheeler industry and forecast that the industry would grow by double-digits in the next three years, according to Hero Honda's annual report made available to PTI.

"The next 36 months should witness intense competition in the market place, with new product launches and aggressive pricing being the order of the day. Nevertheless, we are optimistic about our prospects," it said.

Hero Honda said its existing high-selling motorcycles should continue to do well in the market, while the new product launches should enable it "to offer wider choices to the consumers, target hitherto untapped audiences and inject fresh growth momentum into the company".

Besides, thrust on new generation products and technologies should assist in consolidating the leadership in the two-wheeler and motorcycle market, it said.

Hero Honda's sales had grown by 17.7 per cent to 1.67 million units during 2002-03.

While the company posted a 38.4 per cent increase in sales during 2001-02, the sales rose 35.2 per cent in 2000-01. It has already announced a "double-digit" sales growth guidance for the current financial year.

Hero Honda's market share, however, slipped from 48 per cent in 2001-02 to 44 per cent in 2002-03.

Stating that the new product launches are vital to its growth strategy, the company said it would introduce new products and technologies in the next few years.

"We will enter new categories, launch new models in existing categories, unveil upgraded variants of existing models, and introduce products based on new technology platforms," it said.

The proposed rollout would cover the entire spectrum of price, power, fuel efficiency, style, reliability and emission norms, the company said.

Hero Honda also predicted a double-digit growth for the two-wheeler and motorcycle markets over the next three years.

"We expect the motorcycle market to grow by more than 15 per cent during 2003-04. While this is less than the growth experienced by the industry in the last few years, it is important to remember that the volumes in the industry have increased significantly," the company said.

Hero Honda expects the share of motorcycles which presently accounts for 76 per cent of the total two-wheeler market to stabilise at 80 per cent in the next three years.

It is however concerned that the sales realisations and operating margins might be hit by the increasing competition in the industry in terms of new models and undercutting of price by the manufacturers.

This, coupled with a possible slowdown in the domestic motorcycle market and a reduction in import duties in the future could also hurt the market leader.