SUMMER TRAINING REPORT

ON

MARKETING STRATEGIES OF HERO MOTOCORP

Submitted in the partial fulfillment of degree of

Bachelor of Business Administration (2014- 2017)

Under the guidance of:

Sushma sharma

Submitted by:
Saurabh chaudhary
00519201714
BBA V Semester

LINGAYAS LALITA DEVI INSTITUTE OF MANAGEMENT AND

SCIENCES
Affiliated to Guru Gobind Singh Indraprastha University, Delhi.
Mandi road New Delhi- 110037
 STUDENT DECLARATION

I hereby declare that the project entitled Marketing Strategies of Hero Motocorp under the
guidance of Mrs Sushma Sharma submitted in the partial fulfillment of degree of bachelor of
business administration (BBA) from LINGAYAS LALITA DEVI INSTITUTE OF
MANAGEMENT AND SCIENCES. This is my original work and this project work has
not formed the basis for the award of any Degree to the best of my knowledge.

SAURABH CHAUDHARY

00519201714

Signature of student

Place: _______

Date: __/__/____

2
 CERTIFICATE

This is to certify that project title Marketing Strategies of Hero Motocorp is the original
work of SAURABH CHAUDHARY of BBA 5th Semester and has been duly completed under
my guidance and supervision up to my satisfactory level.

This work has been done in partial fulfillment of the requirement for the award of the degree of
BBA from (LINGAYAS LALITA DEVI INSTITUTE OF MANAGEMENT AND SCIENCES,
GGSIPU) and has not been submitted anywhere in any other university for the award of any
degree.

Signature of the Guide

3
 ACKNOWLEDGEMENT

It is pleasure to acknowledge many people who knowingly and unwittingly helped me, to
complete my project. First of all let me praise god for all the blessings, which carried me through
all those years.

I am particularly indebted to Director , which inculcated in me utmost respect for human values
and groomed me up in the field of software technology to take on the challenges of the
competitive world.

First & foremost, I would like to express my regards to Mrs Sushma Sharma for her constant
encouragement and support. I would also like to express my immense gratitude towards all the
lecturers of our college for providing the invaluable knowledge, guidance, encouragement
extended during the completion of this project.

I extend my sincere gratitude to all my teachers and guide who made unforgettable contribution.
Due to their sincere efforts I was able to excel in the work entrusted upon me.

Last but not the least; I am grateful to my parents, my sister, my brother, my friends and all well-
wishers for their moral support and encouragement during the entire period of time.

Signature of the student

4
 EXECUTIVE SUMMARY
The Indian automotive industry consists of five segments: commercial vehicles; multi-utility
vehicles & passenger cars; two-wheelers; three-wheelers; and tractors. With 7,822,963 units sold
in the domestic market and 753,591 units exported during the first nine months of FY2012. The
two-wheeler sales have witnessed a spectacular growth trend since the mid nineties. India is the
second largest producer and manufacturer of two-wheelers in the world. Indian two-wheeler
industry has got spectacular growth in the last few years. Indian two-wheeler industry had a
small beginning in the early 50s. The Automobile Products of India (API) started manufacturing
scooters in the country. Bikes are a major segment of Indian two wheeler industry, the other two
being scooters and mopeds. Indian companies are among the largest two-wheeler manufacturers
in the world. Hero Honda and Bajaj Auto are two of the Indian companies that top the list of
world companies manufacturing two-wheelers. The two-wheeler market was opened to foreign
companies in the mid 1980s. The openness of Indian market to foreign companies leads to the
arrival of new models of two-wheelers into India. Easy availability of loans from the banks,
relatively low rate of interest and the discount of prices offered by the dealers and manufacturers
lead to the increasing demand for two-wheeler vehicles in India. This lead to the strong growth
of Indian automobile industry

This research work is also based on comparative study of two-wheeler industry. The title of this
study is Marketing Stratigies of Hero MotoCorp. The main objective of this research is to
perform the comparative analysis of Hero MotoCorp with other industry players. Researcher has
used the both primary and secondary data to accomplish all the research objectives. Researcher
has done the questionnaire survey to gather the primary data. The interviews were conducted
with the customers of two-wheelers. This study is descriptive in nature as it includes the
questionnaire survey, which is an attribute of descriptive study.

5
 TABLE OF CONTENTS

1. EXECUTIVE SUMMARY...................................................................................4

2. INTRODUCTION ................................................................................................6

3. COMPANY PROFILE........................................................................................20

4. RESEARCH OBJECTIVE & METHODOLOGY..............................................30

5. LITERATURE REVIEW....................................................................................31

6. PRIMARY FINDING AND ANALYSIS............................................................46

7. RECOMMENDATIONS.....................................................................................63

8. CONCLUSION & IMPLICATIONS..................................................................64

9. BIBLIOGRAPHY...............................................................................................66

10. COPY OF THE QUESTIONNAIRE...................................................................67

6
 INTRODUCTION

Indian Two-Wheeler Industry

The Indian two-wheeler (2W) industry recorded sales volumes of 3.4 million units in Q3, 2011-
121, a growth of 11.0% (YoY) but flat (QoQ). Although the YoY volume growth of the industry
remained in double digits, the pace of growth during the last quarter was at its lowest gear in the
last three years. The deceleration in growth was contributed mainly by the motorcycles segment
which grew at a much lower rate of 9.2% (YoY) in Q3, 2011-12; even as the scooters segment
continued to post 20%+ (YoY) expansion. Overall, ICRA expects the domestic 2W industry to
report a volume growth of ~13% in 2011-12 as we expect growth to fade further in Q4, 2011-122
due to base effect.

In an environment where the northward movement of inflation, fuel prices and interest rates has
been the nemesis of the Indian automobile industry at large, the 2W industry has been the most
resilient reflected in its healthy volume growth of 15.0% (YoY) in 9m, 2011-12. The growth has
been supported by various structural positives associated with the domestic 2W industry
including favourable demographic profile, moderate 2W penetration levels (in relation to several
other emerging markets), under developed public transport system, growing urbanization and
expected strong replacement demand, besides moderate share of financed purchases. ICRA
expects these strengths, coupled with the OEMs thrust on exports, to aid the 2W industry to
report a volume CAGR of 10-12% over the medium term to reach a size of 21-23 million units
(domestic + exports) by 2015-16.

7
Trend in Sales Volumes of the Indian 2W Industry

Although the YoY volume growth of the industry remained in double digits, the pace of growth
during the last quarter was at its lowest gear in the last three years. In an environment where the
increase in inflation, fuel prices and interest rates has been the archenemy of growth in the Indian
automobile industry at large, the 2W industry has been the most tough and was reflected in its
vigorous volume growth.

A look on the volumes of major 2-wheeler OEMs -

There seems to be an early mix shift underway - favoring scooters over bikes (beneficial to
Honda) and favoring executive segment over premium (benefits Hero over Bajaj) has been seen.
While growth in scooters appears structural (driven by appeal of the scooter as a vehicle that cuts
across gender and age biases), while the growth in executive segment appears cyclical as
consumers baulk at high fuel prices and downshift to more fuel efficient products. A long-term
trend of consumers preferring premium bikes should resume volumes should recover, though
timing will remain uncertain - maybe in FY14, but potentially after that too.

8
To understand deeper on the available segments (Motorcycles) and the respective offerings -

1) Economy Segment -

2) Executive Segment -

9
3) Premium Segment -

Even though the number of offerings in the premium segment seems high, maximum volume
churners still remain the products in executive & economy segments. With an aggressive pricing
for Pulsar 200 NS & Duke 200; Bajaj plans to gain strategically in terms of volumes over the

10
period of time. Bajaj's dominance in Executive segment is the the primary reason for its high
operating margin and thus emerge as one of the most profitable 2-wheeler OEMs.

Profile of the Indian 2-wheeler companies -

HeroMotoCorp is now worlds largest manufacturer of two-wheelers. The company has

benefited from the demand shift to motorcycles, as it focuses solely on this product segment
(although has a product called Pleasure in Scooter segment). With fuel efficiency and riding
comfort as the main selling points, HMC has been able to address a wide market and post robust
sales growth even after its separation from the Japanese major Honda.

Bajaj Auto is well positioned in the motorcycle segment as the 2nd largest player with around
30% market share. Over the last decade, the company has successfully changed its image from a
scooter manufacturer to a two-wheeler manufacturer. Its product range encompasses scooterettes,
scooters and motorcycles. Though the company is miles behind Hero in terms of sales volumes,
it is now Indias most profitable two-wheeler manufacturer.

TVS Motor Company Limited is the third largest two-wheeler manufacturer in India. It is the
flagship company of the parent TVS Group employing over 40,000 people with an estimated
15 million customers. It manufactures motorcycles, scooters, mopeds and auto rickshaws. TVS
Motor is credited with many innovations in the Indian automobile industry, notable among them
being the introduction of India's first two-seater moped, the TVS 50cc. The company became the
leader in its category of sub 100 cc mopeds, having sold 7 million units. It also introduced
the TVS Scooty, which is India's second largest brand in the scooterette segment. The TVS Jive
launched in November 2009 became India's first clutch-free motorbike aimed at a stress-free
rider experience. But the growth in F12 was dismal and seems to lose ground against
competition.

Honda Motorcycle and Scooter India, Private Limited (HMSI) is the wholly owned Indian
subsidiary of Honda Motor Company, Limited, Japan. Founded in 1999, it was the fourth Honda
automotive venture in India, after Hero Honda, Kinetic Honda Motor Ltd and Honda Siel Cars
India. The entry of Honda into the Indian market as HMSI began with the launch of the Honda
Activa, a 100 cc scooter. A slightly modified trendier version of the Activa was soon launched, as

11
the Honda Dio. Honda Eterno was launched thereafter to add to the portfolio of HMSI's scooters.
The Honda Unicorn was the first motorcycle released by HMSI. The Honda Shine has since been
released.

India Yamaha Motor, IYM (officially India Yamaha Motor Private Limited) is
an Indian subsidiary of Yamaha Motor Company, formed in 2008 as a joint venture
with Mitsui. It produces a range of motorcycles for domestic consumption and export. Yamaha
motors in India have been present in the market of low range economy bikes for a long time. All
bikes in their store were designed for mass market, but with the introduction of FZ-16, FZ-
S, Fazer, and R15 they have made an impression on the mid range bike market in India.

Suzuki Motorcycle India Pvt. Ltd. is a subsidiary of one of the world's leading two-wheeler
manufacturer Suzuki Motor Corporation. The companys products include motorcycles and
scooters. The company was incorporated in 1997 in India.

Mahindra Two Wheelers Limited (MTWL) is backed by the Mahindra Engineering Services
(MES), the Italy-based design house, engines engineering and Taiwans Sanyang Industry
Company Limited (SYM). In 2011 Mahindra became the first Indian two-wheeler manufacturer
to enter the Moto Grand Prix Championships. This two wheeler maker formally entered the two
wheeler industry by acquiring with the successful acquisition of business assets of Kinetic Motor
Company Limited.

Market Share Trends

The Indian motorcycles segment continues to be dominated by Hero MotoCorp which has
maintained its market share at over 55% in the domestic motorcycles segment over the last five
quarters. The top three players accounted for 89.5% of the industrys volumes in Q3, 2011-12
(92.0% in 2007-08), with Honda Motorcycles reclaiming its spot as the third largest player, a
position which it had lost out to TVS in the previous quarter after having retained it since Q4,
2009-10. In the 75-125cc segment of motorcycles (that represented 71% of total motorcycles
sales volumes in 9m, 2011-12), Hero MotoCorp continues to be a strong market leader with a
share of 74.2% in 9m, 2011-12 (70.4% in 9m, 2010-11). In the >125cc segment of motorcycles,
while Bajaj Auto continues to account for nearly half the segments volumes (49.1% in 9m,

12
2011-12), Yamaha has been the fastest growing having improved its market share from 8.1% in
9m, 2010-11 to 10.1% in 9m, 2011-12.

13
Trend in Market Share in Motorcycles Segment (Domestic)

Sales Volumes Analysis - Scooters

Barring Q1, 2011-12, the growth in scooter segments sales volumes has generally outperformed
that of the motorcycles segment, partly due to the formers smaller base. In Q3, 2011-12 too, the
sales volumes of the domestic scooters segment at ~660,000 units recorded a growth of 21.6%
(YoY), higher than the 9.2% growth in motorcycle sales. With this, the share of the scooters
segment in the total domestic two-wheeler volumes increased to 19.4% in Q3, 2011-12 from
17.6% in 2010-11.

14
Trend in Quarterly Sales Volumes of Scooters (Domestic)

Market Share Trends

Overall, Honda Motorcycles continues to maintain its leadership position in the scooters segment
through its flagship brand Activa (besides Aviator and Dio) enjoying a market share of 50.7% in
Q3, 2011-12. While capacity shortfall at the companys plant at Manesar (Haryana) had
restricted its volume growth in the recent past, the company began commercial production at its
new plant at Tapukara (Rajasthan) in July 2011. This has allowed the company to consolidate its
market position over the last two quarters. However, Hero MotoCorps demonstrated success in
improving market share (through its sole brand Pleasure) coupled with new scooter models
proposed to be launched by Hero MotoCorp, TVS and Yamaha over the short to medium could
imply shrinkage of market share gap between the market leader and others over time.

15
Trend in Market Share in Scooters Segment (Domestic)

Hero MotoCorp

Trend in Financial Performance of Hero MotoCorp

Revenues: In Q3, 2011-12, Hero MotoCorps revenues at Rs. 5,983.6 Crore grew by 16.9% YoY
and 3.4% QoQ, supported by 11.3% YoY and 2.9% QoQ increase in sales volumes and 5.0%
YoY and 0.5% QoQ increase in average realizations. Till 2010-11, exports accounted for 2.5% of

16
the companys sales volumes. Although since the time Hero MotoCorps JV agreement with its
erstwhile partner Honda (Japan) ceded in Dec 2010, the company has been unable to scale up its
exports much; it is likely to get more aggressive on the exports front as and when its fourth
manufacturing plant gets established (for which the company is mulling a location near one of
the ports).

Operating Profit Margins (OPM): Hero MotoCorps OPM at 15.0% in Q3, 2011-12, declined
marginally by 15 basis points (bps) QoQ but increased by 454 bps YoY. The YoY expansion in
HMCLs core EBITDA margins, however, was relatively lower at 194 bps YoY on exclusion of
the estimated royalty payments made by HMCL to its erstwhile partner Honda Motor Company
(HMC, Japan) in Q3, 2010-11. Going forward, HMCLs ability to sustain the scale required to
absorb the additional expenses being incurred for creating a new corporate brand, introduction of
new models, building of R&D capability and exploring overseas markets will govern its
profitability.

Net Profits: Hero MotoCorps Q3, 2011-12 PAT at Rs. 613.0 Crore grew by 42.9% YoY and
1.6% QoQ. Overall, the companys revenues and PAT touched a record high in Q3, 2011-12.

Bajaj Auto

Trend in Financial Performance of Bajaj Auto

Revenues: In Q3, 2011-12, Bajaj Autos revenues at Rs. 5,063.2 Crore grew by 21.2% YoY but
declined by 3.9% QoQ) led by continued strong exports growth in both the 2W as well the three-
wheeler (3W) segments; increase in average realization due to both price increase as well as
favourable change in product mix; and favourable currency movement on exports. The company
managements outlook on exports (~32% of 2W volumes in Q3, 2011-12) remains robust with a
target to achieve export of 1.5 million units in 2011-12E, reflecting a growth of 25% over 2010-
11.

17
Operating Profit Margins (OPM): Bajaj Autos OPM improved to 21.0% in Q3, 2011-12,
higher by 63 bps YoY and 89 bps QoQ. The improvement in margins was supported by relatively
higher realizations from exports, operating leverage benefits and rationalization of spends on
sales promotion. The DEPB benefits were discontinued post September 2011; however, BAL has
undertaken price increase on export models (besides price increase on domestic models), which
should allow the company to sustain its margins going forward.

Net Profits: In Q3, 2011-12, while Bajaj Autos OPBITDA growth at 25.0% (YoY) was robust,
the companys PAT at Rs. 795.2 Crore grew at a relatively lower rate of 19.2% (YoY). This was
due to the exceptional MTM loss of Rs. 58.9 Crore recorded by the company in Q3, 2011-12
related to the valuation of forward exchange contracts. This is a notional loss and would get
reversed on maturity of the underlying contracts (assuming the companys actual exports remain
in line with its budgeted estimates during the term of the contract).

18
TVS Motor

Trend in Financial Performance of TVS

Revenues: In Q3, 2011-12, TVS Net Sales at Rs. 1,762.2 Crore grew by 7.0% YoY but declined
by 11.5% QoQ. While the companys total 2W volumes in Q3, 2011-12 grew by 0.9% YoY and
total three-wheeler (3W) volumes declined by 11.0% YoY, the revenue growth was much higher
by virtue of favourable change in product mix. Thus, notwithstanding the increase in proportion
of low-ticket mopeds in TVSs domestic 2W sales volumes from 39% in Q3, 2010-11 to 41% in
Q3, 2011-12, the increase in proportion of >100cc scooter (Wego) and >125cc motorcycles
(mainly Apache RTR family) in its sales mix enabled it to improve its average realization YoY.

Operating Profit Margins (OPM): TVS OPM at 6.5% in Q3, 2011-12 was 44 bps higher YoY
but 40 bps lower QoQ. While the companys product mix in Q3, 2011-12 was in its favour on
YoY basis, its relative deterioration on QoQ basis accordingly translated into movement in OPM.

Net Profits: While TVS recorded OPBITDA growth of 14.6% YoY in Q3, 2011-12, the
companys PAT growth at 1.4% YoY was much lower on account of higher tax rate and lower

19
other income. Also, the companys PAT in Q3, 2011-12 declined by 26.1% on QoQ basis both
due to negative revenue growth (QoQ) as well as decline in OPM on QoQ basis.

Facts about India's growing two-wheeler market

According to industry body, the Society of Indian Automobile Manufacturers, the Indian two-
wheeler industry is expected to post an annual growth of 11-12 per cent, and the market is
expected to double every four years till 2020. According to data from Nomura and Crisil, as
many as 10 million two-wheelers were sold in India 2011-12. Vehicles in the executive
segment formed the bulk of sales at 6.5 million, followed by the economy segment (1.8
million) and premium segment (1.7 million).
The recent series of hikes in the price of petrol have played a significant role in the sale of
two-wheelers, according to SIAM, as most first-time four-wheeler buyers in rural India and
tier II and tier III cities have deferred their purchases. Two-wheelers account for a whopping
76 per cent of market share in the automobile sector in Asias third-largest economy.
Passenger vehicles account for 16.25 per cent.
Barely 18 months after Indias most successful two-wheeler marriage ended, Honda made its
ambitions clear by launching the 110cc Dream Yuga, its first low-cost motorcycle meant to
target the budget market ruled by Hero and Bajaj. The Dream Yuga comes at an
attractive Rs. 44,642, and will compete with Heros Splendor, which costs Rs. 42,950. The
Splendor is Indias top-selling bike.
Other two-wheeler companies such as Yamaha and Suzuki, too, are steadily focusing on the
mass-market segment in an attempt to dislodge the two giantsHero and Bajaj. Yamaha last
month announced a new $280 million factory in India to nearly triple its capacity to 2.8
million motorcycles by 2018, while Suzuki Motor, which is expected to launch a mass-
market offering soon, is building a new factory to take its India capacity to close to one
million motorcycles by 2014.
Hero has a market share of around 56 per cent in the overall domestic two-wheeler market.
At 25.5 per cent, Bajaj comes a distant second, but maintains a healthy lead over Honda and
TVS, which have 7.5 per cent and 6.2 per cent market share, respectively. In terms of volume
growth over the previous fiscal year, Hero leads with 16.5 per cent, followed by Honda (13.6
per cent), Bajaj (7.4 per cent) and TVS Motors (minus 0.3 per cent). Top brands from each
stable are as follows: Hero Passion, Splendor and Pleasure (scooter); Bajaj Pulsar and

20
Discover; Honda Unicorn, Twister and Activa (scooter); TVS Flame, Apache and Scooty
(scooter)

21
 COMPANY PROFILE

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest manufacturer of
two - wheelers, based in India. In 2001, the company achieved the coveted position of being the
largest two-wheeler manufacturing companyin India and also, the 'World No.1' two-wheeler
company in terms of unit volume sales in a calendar year. Hero MotoCorp Ltd. continues to
maintain this position till date.

Vision

The story of Hero Honda began with a simple vision - the vision of a mobile and an empowered
India, powered by its bikes. Hero MotoCorp Ltd., company's new identity, reflects its
commitment towards providing world class mobility solutions with renewed focus on expanding
company's footprint in the global arena.

Mission

Hero MotoCorp's mission is to become a global enterprise fulfilling its customers' needs and
aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts
its customers into its brand advocates. The company will provide an engaging environment for
its people to perform to their true potential. It will continue its focus on value creation and
enduring relationships with its partners.

Strategy

Hero MotoCorp's key strategies are to build a robust product portfolio across categories, explore
growth opportunities globally, continuously improve its operational efficiency, aggressively
expand its reach to customers, continue to invest in brand building activities and ensure customer
and shareholder delight.

22
Manufacturing

Hero MotoCorp two wheelers are manufactured across three globally benchmarked
manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are located in
the state of Haryana in northern India. The third and the latest manufacturing plant is based at
Haridwar, in the hill state of Uttrakhand.

Technology

In the 1980's the Company pioneered the introduction of fuel-efficient, environment friendly
four-stroke motorcycles in the country. It became the first company to launch the Fuel Injection
(FI) technology in Indian motorcycles, with the launch of theGlamour FI in June 2006.

Its plants use world class equipment and processes and have become a benchmark in leanness
and productivity.

Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to innovate and
develop cutting edge products and processes

Products

Hero MotoCorp offers wide range of two wheeler products that include motorcycles and
scooters, and has set the industry standards across all the market segments.

23
24
Distribution

The Company's growth in the two wheeler market in India is the result of an intrinsic ability to
increase reach in new geographies and growth markets. Hero MotoCorp's extensive sales and
service network now spans over to 5000 customer touch points. These comprise a mix
of authorized dealerships, service & spare parts outlets, and dealer-appointed outlets across the
country.

Brand

The new Hero is rising and is poised to shine on the global arena. Company's new identity "Hero
MotoCorp Ltd." is truly reflective of its vision to strengthen focus on mobility and technology
and creating global footprint. Building and promoting new brand identity will be central to all its
initiatives, utilizing every opportunity and leveraging its strong presence across sports,
entertainment and ground- level activation.

2010-11 Performance

Total unit sales of 54,02,444 two-wheelers, growth of 17.44 per cent

Total net operating income of INR 19401.15 Crores, growth of 22.32 per cent Net profit after tax
at INR 1927.90 Crores Total dividend of 5250% or INR 105 per share including Interin Dividend
of INR 70 per share on face value of each share of INR 2 each EBIDTA margin for the year
13.49 per cent EPS of INR 96.54

Milestones

1983

Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
Shareholders Agreement signed

1984

Hero Honda Motors Ltd. incorporated

25
1985

First motorcycle "CD 100" rolled out

1987

100,000th motorcycle produced

1989

New motorcycle model - "Sleek" introduced

1991

New motorcycle model - "CD 100 SS" introduced

500,000th motorcycle produced

1992

Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder Managing
Director, Mr. Raman Kant Munjal

1994

New motorcycle model - "Splendor" introduced

1,000,000th motorcycle produced

1997

New motorcycle model - "Street" introduced

Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated

1998

2,000,000th motorcycle produced

26
1999

New motorcycle model - "CBZ" introduced

Environment Management System of Dharuhera Plant certified with ISO-14001 by DNV
Holland
Raman Munjal Memorial Hospital inaugurated - A Hospital in the memory of founder Managing
Director, Mr. Raman Kant Munjal

2000

4,000,000th motorcycle produced

Environment Management System of Gurgaon Plant certified ISO-14001 by DNV Holland
Splendor declared 'World No. 1' - largest selling single two-wheeler model
"Hero Honda Passport Programme" - CRM Programme launched

2001

New motorcycle model - "Passion" introduced

One million production in one single year
New motorcycle model - "Joy" introduced
5,000,000th motorcycle produced

2002

New motorcycle model - "Dawn" introduced

New motorcycle model - "Ambition" introduced
Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh and Zaheer Khan
as Brand Ambassadors

2003

Becomes the first Indian Company to cross the cumulative 7 million sales mark
Splendor has emerged as the World's largest selling model for the third calendar year in a row
(2000, 2001, 2002)
New motorcycle model - "CD Dawn" introduced

27
New motorcycle model - "Splendor +" introduced
New motorcycle model - "Passion Plus" introduced
New motorcycle model - "Karizma" introduced

2004

New motorcycle model - "Ambition 135" introduced

Hero Honda became the World No. 1 Company for the third consecutive year.
Crossed sales of over 2 million units in a single year, a global record.
Splendor - World's largest selling motorcycle crossed the 5 million mark
New motorcycle model - "CBZ*" introduced
Joint Technical Agreement renewed
Total sales crossed a record of 10 million motorcycles

2005

Hero Honda is the World No. 1 for the 4th year in a row
New motorcycle model - "Super Splendor" introduced
New motorcycle model - "CD Deluxe" introduced
New motorcycle model - "Glamour" introduced
New motorcycle model - "Achiever" introduced
First Scooter model from Hero Honda - "Pleasure" introduced

2006

Hero Honda is the World No. 1 for the 5th year in a row
15 million production milestone achieved

2007

Hero Honda is the World No. 1 for the 6th year in a row
New 'Splendor NXG' launched
New 'CD Deluxe' launched
New 'Passion Plus' launched
New motorcycle model 'Hunk' launched
20 million production milestone achieved

28
2008

Hero Honda Haridwar Plant inauguration

New 'Pleasure' launched
Splendor NXG lauched with power start feature
New motorcycle model 'Passion Pro' launched
New 'CBZ Xtreme' launched
25 million production milestone achieved
CD Deluxe lauched with power start feature
New 'Glamour' launched
New 'Glamour Fi' launched

2009

Hero Honda GoodLife Program launched Hunk' (Limited Edition) launched

Splendor completed 11 million production landmark
New motorcycle model 'Karizma - ZMR' launched
Silver jubilee celebrations

2010

New model Splendor Pro launched

Launch of new Super Splendor and New Hunk

2011

New licensing arrangement signed between Hero and Honda (Hero Honda is renamed as Hero)
Launch of new refreshed versions of Glamour, Glamour Fi, CBZ Xtreme, Karizma
Crosses the landmark figure of 5 million cumulative sales in a single year

29
SWOT Analysis of Hero MotorCorp

Strength

1 Ability to understand customers needs and wants.

2 Recognized and established brand name.
3 Effective advertising capability.
4 Its after sales service
5 Maintenance cost is low
6 Resale value is high
7 Companys name is synonymous with fuel efficient bikes and connectivity.
8 Huge brand equity and one of the biggest players in the two wheelers Indian
market
9 Huge variety of products in every segment
10 Excellent distribution, over 5000 dealerships and service centers
11 Good advertising and excellent rebranding from Hero Honda to Hero Moto
Corp

Weakness

1 Market share in premium segment is low.

2 People are concerned after brand migration regarding technology.
3 Spare parts availability issues.

Opportunities

1 Global expansion in countries of Africa and South America.

2 Expansion of target market (include women, male scooter and trans road bike).

30
3 Scooter market is increasing thus they can be Indias leader in scooter market.
4 Financial help easily available to customers.
5 Relatively low rate of interest and the discount of prices offered by the dealers
and manufacturers lead to the increasing demand for two wheeler vehicles.
6 Large market for the high performance segment which is increasing with the
upliftment of the lifestyle of people.
7 Purchasing power has increased of customers.
8 Strategic alliance with EBR and AVL for technology transfer.

Threat

1 Honda motorcycles and scooters India has become aggressive and launching
products for mass market in 100cc eg. Dream yuga
2 Bajaj motors is a strong competition in premium segment
3 FDI announced in automobiles is 100%
4 Petrol prices are increasing thus sale of premium segment bikes may decrease
5 Aluminum and steel prices will increase.
6 Strong competition from Indian as well as international brands
7 Dependence on government policies and rising fuel prices

31
 RESEARCH OBJECTIVE AND METHODOLOGY

OBJECTIVE:

a. To do the comparison in two wheeler industry with special reference to Hero Motorcop

b. To identify the market position of Hero Motorcorp

c. To analyze the current competition scenario of Two Wheeler Industry

d. To explore the challenges and opportunities in Two Wheeler Industry

e. To identify the consumer preference towards Two Wheeler Companies

RESEARCH METHODOLOGY:

Secondary data: Company website, newspaper, magazines, books, articles and online journals

Primary data: It will be collected through questionnaire survey.

Tool Used: A Structured Questionnaire will be used

Sampling Method: Random Sampling Method

Sample Size: 100

Target Audience: Marketers

32
 LITERATURE REVIEW

Comparison between April-May 2012 and April-May 2013

Indian two wheeler industry saw a slight growth of 1.04% during the April-May period of 2013
compared against the same period of 2012. A total of 2,374,253 units were sold during the period
as 2,349,814 units were sold in April-May 2012.

Hero Motor Corp is the biggest manufacturer in Indian market who sold 1,035,823 units during
April-May 2013, thus registered a 3.54% decline in sales as against same period the previous
year where 1,073,815 units were sold. The provision of giving 5 year warranty on every vehicle
didnt pay off well for Hero.

The notable highlight of the period is the flourishing sales of Vespa, as they sold 8280 units
during the period April-May 2013 and posted a growth of 247.02% as against same period last
year. Honda, Yamaha and Royal Enfield had also posted growths while Suzuki sales took a
downturn.

33
The period April-May of 2013 saw the share of Hero came down to 43.63%. Honda gain some
shares and put themselves at second place replacing Bajaj. Honda holds 19.79% share as per
April-May 2013 while Bajaj has now 17.35% share.

Motorcycles

Sales of Hero declined by 7.27% while Yamaha also saw their sales went down by 9.39%.
Apparently Honda registered 21.33% growth. Royal Enfield and Harley Davidson also wrapped
up the month with concrete sales figures.

34
Triggered by the decline of sales Heros share in motorcycle segment came down to 53.60% for
April to May period of 2013. Their former partner Honda with improved share of 11.67% stays
as third place in terms of sales in Indian two wheeler market.

Scooters

The sales of scooter witnessed an encouraging growth by 13.88% in the April to May period of
2013 as compared to same period of 2012. Hero motor Corp had fared an uplifting growth of
44.94% during the period April-May 2013 as against April-May 2012. The newly launched
Vespa has also reassured hopes for Piaggio as 8280 units were sold out in April May this year.
M&M has suffered a steep decline of 48%.

35
Honda remains mater leader in this segment and owns 50.92% of market share. Hero has again
grew in market share for the period April-May of 2013 and now holds 21.07% of Scooter market
share. To recapture the lost market share , Honda has now introduced 110cc Activa-I priced at
around Rs 44,000 and this will provide tough competition to Hero and Suzuki in coming months.

Moped

TVS is the lone player in moped segment. But their sales had declined by 11.45% for the period
April-May of 2013 as against same period the previous year. To increase Moped sales, TVS has
started TV commercial recently.

36
Bajaj Auto Vs Hero MotoCorp

In the current negative sentiment of the Auto sector, SIAM has lowered the growth guidance for
the four wheeler segment but has retained the guidance for the two wheelers. In our latest
analysis in our flagship magazine Dalal Street Investment Journal we have covered comparative
analysis of countries top two wheeler companies named Bajaj Auto and Hero MotoCorp.

Bajaj Auto (BAL) and Hero MotoCorp (HMCL) together have 80% of market share in the
domestic motorcycle segment. Interesting both the companies are also Sensex participants with a
weight of 2.99%. The growth angle to the companies is that they have exposure to the rural
segment where there is the next wave of growth.

The distinctive feature of their business is that BAL has three wheeler categories. BAL also
derives exports revenues which forms a major part of its revenues. HMCL also has exports
revenues but it does not have any three wheeler category.

In the highly competitive market, both the companies have a long list of brands. BAL has a top
brand Pulsar while HMCL also has brands like CBZ, Karizma, and Splendor etc. Over the years
HMCL has played volume game while BAL has placed most of its brands in the premium
segment. BAL also markets foreign brands in India. HMCL on the other hand is also expected to
enter in the premium segment and has sourced the high end technology in partnership with a US
based company Erik Buell Racing (EBR).

On the financial front HMCL has shown a volume as well as revenue growth over the past few
years and in that terms it has outpaced the industry as well as its rival BAL. Bajaj on the other
hand is more profitable and has show a very good margin improvement in last 5 years.

There are also few other factors that we have considered in our analysis such as valuation, the
issues of the inventory pile ups, Capex plans, tax outgos etc and one can read that in detail in the
three page analysis in the magazine.

37
SWOT Analysis of Bajaj Auto

Strengths

Highly experienced management.

Product design and development capabilities.
Extensive R & D focus.
Widespread distribution network.
High performance products across all categories.
High export to domestic sales ratio.
Great financial support network (For financing the automobile)
High economies of scale.
High economies of scope.

Weaknesses

Hasn't employed the excess cash for long.

Still has no established brand to match Hero Honda's Splendor in commuter segment.
Not a global player in spite of huge volumes.
Not a globally recognizable brand (unlike the JV partner Kawasaki)

Threats

The competition catches-up any new innovation in no time.

Threat of cheap imported motorcycles from China
Margins getting squeezed from both the directions (Price as well as Cost)
TATA Ace is a serious competition for the three-wheeler cargo segment.

Opportunities

Double-digit growth in two-wheeler market.

Untapped market above 180 cc in motorcycles.
More maturity and movement towards higher-end motorcycles.
The growing gearless trendy scooters and scooterette market.
Growing world demand for entry-level motorcycles especially in emerging markets.

SWOT Analysis of TVS Motors

Strength

38
1. Huge brand equity and one of the biggest players in the two wheelers Indian market

2. Excellent R&D, and wide variety of products in every segment

3. Excellent distribution and good number of service centers

4. TVS Group has over 40,000 employees and a customer reach of over 15 million

5. Associating itself with celebrity brand ambassadors

6. Scooty as a brand has become a second name for the scooterrate segment

Weakness

1. Absence in the premium bike segment

Opportunity

1. Two-wheeler segment is one of the most growing industries

2. Export of bikes is limited i.e. untapped international markets

Threats

1. Strong competition from Indian as well as international brands

2. Dependence on government policies and rising fuel prices

3. Better public transport will affect two-wheeler sales

39
SWOT Analysis of Yamaha Motors

Strength

1. Excellent branding, advertising and global distribution

2. Yamaha Motor Corporation has over 39,000 employees

3. One of the major brand in motorsport like MotoGP, World superbike etc

4. Yamaha produces scooters from 50 to 500 cc, and a range of motorcycles from 50 to 1,900 cc,
including cruiser, sport touring, sport, dual-sport, and off-road

5.Extremely high Size and reach of company

Weakness

1. Bikes like R15, R1 are quite expensive

Opportunity

1. Two-wheeler segment is one of the most growing industries

2.Export of bikes is limited i.e. untapped international markets

Threats

1. Cut Throat Competition

2. Increasing number of players in the market

3. Rising raw material cost

4. Increasing rate of interest on finance

Demand Drivers for the two wheeler industry

40
On one hand, growing economic well-being reflected in rising per capital GDP is likely to make
2Ws more affordable; on the other, various fundamental drivers such as low 2W penetration (in
relation to several other emerging markets), favorable demographics growing urbanization and
swelling replacement demand are expected to enable the growth momentum to sustain over the
medium term.

Rise in GDP per Capita has increased affordability of 2W

Indias per capita real GDP growth of 7% (CAGR) over the last six years has contributed
substantially towards raising the standard of living of households, which in turn has been one of
the key drivers of growth for the countrys automobile industry. However, income growth is
likely to have been uneven across the different income deciles. Income at the lower end of the
distribution scale, which comprises the 2W target segment, is likely to have grown at a rate
below the overall per capita income growth rate. Yet economic wellbeing has led to a significant
increase in the number of households coming within the 2W target segment over the past few
years. As per NCAERs estimates, the number of households having annual income between Rs.
200,000- 500,000 is estimated to have increased to 22 million in 2015-16, a scale-up by a factor
of 2.5x over 2011-12

Incidentally, this scale-up is almost similar to the expansion in the domestic 2W industry size (by
volumes) during this period. Given that economic and population growth would further expand
the universe of low to middle income earners who have the threshold purchasing future as well.
Also, significantly, 2W purchase prices and operating expenses (inflation power to buy a 2W, the
pattern of healthy industry growth is likely to hold in the foreseeable adjusted) are now around
36% lower than they were a decade back, considering that vehicle prices have not escalated
much over the years, indicating increasing in affordability of 2Ws

41
Under-penetrated market as compared to other emerging markets to provide adequate
headroom for future growth

Although India is the second largest 2W market in the world in terms of sales volumes (after
China), the 2W household penetration level in the country is much lower at around 36% than in
some of the other emerging markets such as Brazil, Indonesia, Thailand and Taiwan. Also, the
penetration rates differ between Indias rural and urban areas, with the rural areas being under-
penetrated by a factor of 3x as compared to larger cities. That said, assuming that households
having annual income less than Rs. 90,000 do not have the ability to own a 2W, the existing
household 2W penetration in India in the addressable income segment of households (i.e. income
greater than Rs. 90,000) is estimated to be around 74%12. Prima facie, this appears to be a large
figure and suggests that penetration-driven growth may be difficult for the 2W industry to
accomplish over an extended time horizon. However, the fact that in absolute terms there are still
28 million households at present in the primary target income segment that do not own a 2W, the
scope for penetration-led future growth continues to be reasonably large. Additionally, the social
trend in favor of nuclear families coupled with expected expansion of the target income segment
pie going forward is expected to further increase the number of households which could be
potential targets for the 2W industry.

Favorable demographic profile to continue to feed the consumption cycle

A large youth population potentially offers a sizeable market for consumer products. India
currently has a very favorable demographic profile with average age of 25 years, which is 9
years younger than China, and more than 12 years and 19 years younger than the US and Japan,
respectively. As per estimates, around 33% of Indias population of 1.2 billion belongs to the age
bracket of 20-40 years. Within this, the population of males, which is the key target segment for
motorcycles, is estimated to be 206 million; and the population of females, which is the key
target segment for scooters13, is estimated to be 189 million, suggesting existence of large size
of the addressable market. On conversion of even 20% of this youth population into 2W owners,
a demand for ~80 million 2W is estimated to get generated over the medium term. Further, with
the youth population estimated to increase to 229 million by 2015E, a cumulative increase of
11% over 2011, the 2W consumption cycle appears strongly sustainable. This age group is also

42
characterized by a combination of earning power and high spending propensity, which would
increase the likelihood of conversion of potential ownership into actual ownership.

Interplay of growing urbanization and rising rural incomes augurs well for domestic 2W
demand

Urbanization has drawn people living in Indias rural and semi-rural hinterland to cities and
towns at a steady pace. The need for mobility in most Indian cities and towns therefore has
increased substantially, yet the proliferation of public transport system has not kept pace. This is
where the utility of a 2W as the most affordable mode of private transport comes to the fore.
Empirical data suggests that there is a strong positive correlation between urbanization and 2W
demand, particularly in the initial stages of economic growth. For instance, 2W penetration in
stateslike Delhi, Tamil Nadu and Maharashtra is much higher than the pan-India penetration due
to the relatively higher degree of urbanization in these states. With urbanization expected to rise
progressively, around 89 million people are estimated to be added to Indias urban spaces over
the next decade (78 million people are estimated to have got added over the last decade), which
could potentially be one of the most defining changes likely to transpire. Especially so, since this
would add fuel to allied drivers, including increase in proportion of working women and rise in
wage and salaried people that is expected to have a strong positive impact on the demand for
consumer durables.

Further, to the extent the rise in urbanization is contributed by migration of people from rural and
semi-rural regions, it would in turn support increase in remittances to the rural markets
enhancing rural incomes. Industry estimates suggest that around 60% of the rural economy now
depends on non-agricultural sources of income, such as remittances from cities, trading, and
employment in the manufacturing sector. While the increase in crop prices during the last three
years has left larger disposable incomes with rural customers, non-agrarian sources of income
have also played an important role in supporting consumption by rural masses. The interactions
between rural and urban centres could be part of a virtuous cycle, as cities have benefits beyond
their boundaries. This is validated by studies which show that rural populations adjoining large
urban centres have around 20% higher income than the rural average. Thus, the legacy of lower
penetration levels in the rural market, scarcity of public transport infrastructure and the rising

43
income levels would be positive triggers for rural 2W demand, going forward. At the same time,
rising salary levels in urban areas, shortening replacement cycles, increasing traffic congestion in
cities would be factors augmenting 2W demand in urban areas.

Replacement demand to be a key contributor to 2W industry volumes going forward

According to estimates, around 50% of the total domestic sales of 2W are now made to first time
buyers, 30% to customers looking to upgrade from their existing vehicle, and 20% to buyers
seeking a second vehicle for the household. The break-up suggests that currently around 50% of
the sales in the domestic 2W market are made to replacement buyers. Industry estimates also
suggest that the 2W ownership cycle has now shrunk to less than five years. Considering that the
industry has sold around 79 million 2W in the domestic market since the turn of the century, the
total replacement demand works out to a fairly large number. Add to this the healthy growth in
sales to first-time buyers in recent years, driven in particular by sales to the rural market, the
replacement opportunity could only increase in the future. From the consumer perspective,
although replacement involves fresh capital spending, the inducement of upgrading to an
improved technology 2W, having better performance, features and more attractive styling;
complemented with increased spending propensity are expected to be the prime ingredients
feeding replacement demand.

Influence of Supply Side Factors and State of Competition

With demand drivers appearing in place to support the domestic 2W industry growth, the supply
side enablers too will have a key role to play in catalyzing the growth process. Amongst various
factors, adequacy of manufacturing capacity; availability of assorted products across 2W
categories suited to diverse customer segments; accessibility of customer touch points and
effective customer communication strategies hold prime importance in complementing the
underlying demand. At the same time it also creates some competition concerns which we need
to analyze.

44
Large additional capacity creation necessary to meet the expected strong 2W demand

The 2W Original Equipment Manufacturers (OEMs) have made regular investments over the
years to meet the consistent rise in demand. The installed capacity of the top three players viz.,
Hero Honda Motors Limited (HHML), Bajaj Auto Limited (BAL) and TVS Motor Company
Limited (TVS), which together command a market share of over 80% in the domestic 2W
market, rose from 8.4 million units in 2005-06 to 12.9 million units in 2012-13 incurring a
cumulative capex of around Rs. 3,700 Crore over this period.

However, barring the 2010-11 and 2011-12 periods, the overall capacity utilization in the
industry has remained healthy. Generally, the variance in production volumes between the
highest and the lowest production month during a year is around 25-30%, which implies that
capacity utilization in the region of 75-80% is the typical industry norm. However, in 2012-13,
the capacity utilization of the top three players at around 87% was the highest in the last several
years, reducing the capacity buffer available. Notwithstanding the above, the primary reason for
the OEMs inability to fully meet the prevailing demand in 2012-13 was the shortage of
components from select suppliers, rather than in-house capacity constraints. Further, in 2012-13,
the industry had to grapple with labor shortage issues due to insufficiency of skilled manpower
which impacted production in labor intensive units particularly. To cater to the expected rise in
future 2W demand, many OEMs have announced capacity expansion plans comprising of both
Greenfield as well as Brownfield investments, which is expected to make capacity utilization
revert to its historical levels. As per estimates, to achieve industry volumes of 21-23 million units
by 2015-16 (domestic and export), the OEMs will need to invest around Rs. 4,500 Crore over the
next five years for expanding their in-house capacity.

45
Distribution network: Unfair trade practices on the part of firms?

To get the best returns from the distribution network, an OEM strategy that balances the
necessity to expand customer touch points while ensuring adequate dealer profitability and
minimal channel conflict is crucial. Ideally, the distribution network of an OEM in a city should
be large enough to provide both sales as well as service convenience to customers; yet it should
be small enough such that every outlet could have optimum capacity utilization. Considering that
the overall 2W market continues to be under penetrated, most OEMs have maintained their focus
on expanding their sales-cum-service outlets especially in the semi urban and the rural areas.
Current established dealers have helped OEMs scale up their networks quickly by setting up
satellite dealerships along with service facilities in the neighboring smaller towns. As per
estimates, the rural market now accounts for around 45% of total domestic 2W sales volumes
elevating their significance in the OEMs business strategies.

Estimated Dealer Margins Comparison Bajaj Auto Vs Yamaha

Price based competition and Vicious circle

The Indian two wheeler market is increasingly becoming a price warfield17. Everyone and their
competitor wants to win the title of the 'World's cheapest bike' and the customer has become the

46
King. But the question remains if this price based competition is good for the health of the
industry? Isn't everyone eating their own margins in the quest for greater market share and
farther market expansion? And where does this leave smaller players like LML (going through
some very tough times as of now), Kinetic (good scooters, questionable field network, trying
hard in motorcycles) and even Yamaha and TVS? A dominant firm like Hero Honda or Bajaj
Auto can arm twist suppliers to deliver parts cheaper, which the suppliers won't mind doing
considering the volumes that these two dominant player offer. Both the Munjal and Bajaj
families are also typical in the way they promote companies run by their brothers, cousins, in-
laws etc. etc. So Bajaj Auto can always ask for cheaper rates from a Varroc or Auragabad
Electricals while Hero Honda can do the same with MAC or Munjal Showa or Omax Auto. But
what happens to LML (still makes a lot of its components, very archaic), Kinetic (mostly
independent suppliers), TVS (Sundram Group suppliers, who anyways act independent, very
professional but is it the best way forward?), Yamaha (independent suppliers) or a new entrant
like Suzuki (they will buy components from anyone except a Munjal family or a Sundram
company)? Without volumes, one is not in a position to get the best prices. Without the best
component prices, the price of the final product goes up. But then these small players have to
fight Bajaj Auto. So they reduce the selling price of the bike which implies the decline in the
margins for these firms.

47
 PRIMARY FINDINGS AND ANALYSIS

For Customers

Q1. How many brand of two-wheeler do you know?

16% respondents know two brands however 33% respondents know four brands

48
Q2. Which type of two wheeler you prefer most?

40% respondents prefer regular motorcycles however 26% respondents prefer step thrus

49
Q3. Which attributes do you like most in your two-wheeler?

28% respondents like stability at higher speed however 21% respondents like mileage

50
Q4. What is your source of finance?

17% respondents collect money from auto loan however 19% respondents collect money through
debit card

51
Q5. What are the external factors that influence you about purchasing bike?

26% respondents mostly influenced by family members however 18% respondents mostly
influnced by social factor

52
Q6. Which brand right now you are having?

20% respondents have Hero Honda however 18% respondents have Bajaj

53
Q7. Should Company go for innovation in context to development of new bike?

79% respondents replied yes that company should go for innovation in context to development of
new bike

54
Q8. While going for the development of new bike which point the company should keep in
mind?

22% respondents replied that company should focus on less fuel consumption however 18%
respondents replied that company should focus on stylish design

55
Q9. According to you which company`s model you like most and why?

21% respondents replied that they like Hero Honda however 18% respondents replied that they
like Yamaha

56
For Retailer

Q1. Do you deal in two wheelers?

100% respondents replied yes that they deal in two wheelers

57
Q2. In which of the following brand do you deal?

22% respondents replied that mostly they deal in Hero Honda however 24% respondents mostly
deal in Yamaha

58
Q3. Which brand is more demanding by the customer?

23% respondents replied that Hero Honds is more demanding by customer however 21%
respondents replied that Yamaha is more demanding by the cutomer

59
Q4. What kind of feature mostly customers demand while they come to purchase two
wheeler?

25% respondents replied that customer mostly demand for good quality two wheeler however
20% respondents replied that mostly customer look for low fuel consumption

60
Q5. Do customers demand for low price vehicle?

67% respondentsn replied yes that customers demand for low price vehicle

61
Q6. Are they ready to buy good quality two wheeler at any price?

51% respondents replied yes that cutomer are ready to buy good quality two wheelers at any
price

62
Q7. Do they prefer brand name while buying a two wheeler?

90% respondents replied yes that they prefer brand name

63
Q8. Do they consider after sale services?

85% respondents replied yes that they consider after sale service

64
 RECOMMENDATIONS

The two wheeler companies should focus on gearless scooters. The market share of
gearless scooters is increasing at a healthy rate. Bajaj is virtually absent in this range that
caters to the needs of women and families. Presently Honda, Hero Honda and TVS are
big players in this segment.

Entry into four wheeler segment Bajaj has entered into a joint venture with Renault-
Nissan in the development of a small car priced at $3000. This is a significant move
because it directly competes with Tata NANO. Bajaj has also displayed its small car
prototype in the recently held auto expo. It promises double the mileage as compared to
any car in the economy segment and is also considering the option of introducing Diesel
and LPG variants. The four wheeler segment will also be able to hedge any risk that
might arise because of the two wheeler industry and would profit from retaining
consumers switching from two wheelers

Scaling Up Service Centers Companies need to scale up its service centers both in
numbers and in capacity. Keeping in line with its growth target for the next 5 years, the
service centers should not only cater to two wheelers but should also be upgraded to cater
to the needs of four wheelers that companies plans to launch.

Focus on Easy Credit Lending

Investment in Research and Development

Focus on Exports and Global Market

65
 CONCLUSION & IMPLICATIONS

Cutomers

16% respondents know two brands however 33% respondents know four brands

40% respondents prefer regular motorcycles however 26% respondents prefer step thrus

28% respondents like stability at higher speed however 21% respondents like mileage

17% respondents collect money from auto loan however 19% respondents collect money through
debit card

26% respondents mostly influenced by family members however 18% respondents mostly
influnced by social factor

20% respondents have Hero Honda however 18% respondents have Bajaj

79% respondents replied yes that company should go for innovation in context to development of
new bike

22% respondents replied that company should focus on less fuel consumption however 18%
respondents replied that company should focus on stylish design

21% respondents replied that they like Hero Honda however 18% respondents replied that they
like Yamaha

For dealers

100% respondents replied yes that they deal in two wheelers

22% respondents replied that mostly they deal in Hero Honda however 24% respondents mostly
deal in Yamaha

23% respondents replied that Hero Honds is more demanding by customer however 21%
respondents replied that Yamaha is more demanding by the cutomer

66
25% respondents replied that customer mostly demand for good quality two wheeler however
20% respondents replied that mostly customer look for low fuel consumption

67% respondentsn replied yes that customers demand for low price vehicle

51% respondents replied yes that cutomer are ready to buy good quality two wheelers at any
price

90% respondents replied yes that they prefer brand name

85% respondents replied yes that they consider after sale service

67
 BIBLIOGRAPHY

Ardiyok, S. Aftermarket theories in Competition Law and Regulation on Motor Vehicles,

International Journal of Business, Management and Economics, Vol. 1, No. 2, 2005.

BAJAJ AUTO LTD- RIDING TOWARDS DARKNESS, : 23rd March 2011 Creating
Successful New Products: Challenges for Indian Industry

Rishikesha T. Krishnan & Ganesh N. Prabhu, 31 July 1999 Government of India. 1980. Sixth
Five Year Plan (1980-85). New Delhi: Planning Commission.

Shapiro, C., Aftermarkets and Consumer Welfare: Making Sense of Kodak, Antitrust Law
Journal, Vol. 63, 1994.

The Evolution and Structure of the Two-wheeler Industry in India: Sunila George (IIM
Bangalore), Raghbendra Jha (ANU, Canberra), Hari K. Nagarajan (IIM Bangalore and
NCAER, Delhi), 2001 The State of Competition in the Indian Manufacturing Sector

T.A. Bhavani and N.R. Bhanumurthy, Institute of Economic Growth, March 2007 TRADE
LIBERALIZATION AND PRICE-COST MARGIN IN INDIAN INDUSTRIES (B.N. Goldar
and S.C. Aggarwal, 2005)

TWO-WHEELER INDUSTRY: GROWTH DRIVERS INTACT, Anjan Ghosh , Subrata Ray,

Jitin Makkar (ICRA), June 2011 Two-wheeler industry in India, enrich.ch-india.com, 07
April 2009

68
 COPY OF THE QUESTIONNAIRE

For Customers

Q1. How many brand of two-wheeler do you know?

One Two Three
Four Five More than Five

Q2. Which type of two wheeler you prefer most?

Step thrus Mopeds and Mokicks
Scooters Regular Motorcycles Enfields
Diesel Bullet

Q3. Which attributes do you like most in your two-wheeler?

Stability at higher speed Pick up
Mileage Fuel Consumption

Q4. What is your source of finance?

Auto Loan Salary
Debit Card Credit Card

Q5. What are the external factors that influence you about purchasing bike?
Family Member Social Culture
Economic Business Need

Q6. Which brand right now you are having?

Bajaj Hero Honda Suzuki Motor
Mahindra Two Wheeler Kinetic Motor LML India
Yamha

Q7. Should Company go for innovation in context to development of new bike?

Yes No Not Sure

69
Q8. While going for the development of new bike which point the company should keep in
mind?
Stylish Design Fast Pickup Less fuel Consumption
Comfortable Easy to drive features
Cost Effective

Q9. According to you which company`s model you like most and why?
Bajaj Hero Honda Suzuki Motor
Mahindra Two Wheeler Kinetic Motor LML India
Yamha

70
For Retailer

Q1. Do you deal in two wheelers?

Yes No

Q2. In which of the following brand do you deal?

Bajaj Hero Honda Suzuki Motor
Mahindra Two Wheeler Kinetic Motor LML India
Yamha

Q3. Which brand is more demanding by the customer?

Bajaj Hero Honda Suzuki Motor
Mahindra Two Wheeler Kinetic Motor LML India
Yamha

Q4. What kind of feature mostly customers demand while the come to purchase two wheeler?
Good Quality Stylish Comfortable
Long Lastic Low Fuel Consumption Easy to drive

Q5. Do customers demand for low price vehicle?

Yes No

Q6. Are they ready to buy good quality two wheeler at any price?
Yes No

Q7. Will they prefer brand name while buying a two wheeler?
Yes No

Q8. Will they consider after sale services?

Yes No

71