Hero Honda Motors Ltd.

is a result of the joint venture between India's Hero Group and Japanese Honda Motors Company in the year 1983. This joint venture has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide. Hero Honda is globally known of being the most fuel-efficient and the largest CBZ selling Indian motorcycle company. This is a relationship so harmonious that Hero Honda has managed to achieve indigenisation of over 95 percent, a Honda record worldwide. The below chart shows the golden years in the history of HERO HONDA :-

1985 1989 1991 1994 1997 1999 2001 2002 2003 2005

CD-100 SLEEK CD-100 SS Spelendor Street CBZ PASSION DAWN, AMBITION CD-DAWN, SPLENDOR +, PASSION +, KARIZMA SUPER-SPLENDOR, CD-DELUX, GLAMOUR, ACHIEVER

The company is committed to provide the customer with excellence. A rich background of producing high value products at reasonable prices led the world's largest manufacturer of motorcycles to collaborate with the world's largest bicycle manufacturer. During 80s, Hero Honda became the first company in India to prove that it was possible to drive a vehicle without polluting the roads. They company possess three manufacturing units based at Dharuhera, Gurgaon and Haridwar are capable to produce 4.4 million units per year. They introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. The unique features like fuel conservation, safety riding courses and mobile workshops helped the group reach in the interiors of the country. Well-entrenched in the domestic market, Hero Honda Motors Ltd. turned its attention overseas, and exports have been steadily on the rise. Over the years, the Company has received its share of accolades, including the National Productivity Council's Award ( 1990-91), and the Economic Times - Harvard Business School Association of India Award, against 200 contenders. The gross sales of Hero Honda by March end'2008 was 33,371,43 Crores

TWO WHEELERS >> MOTORCYCLES Hero Honda Achiever Hero Honda CD 100 Hero Honda Glamour

Hero Honda CD Dawn Hero Honda CD 100 SS Hero Honda Splendor

Hero Honda CD Deluxe Hero Honda Glamour Hero Honda Passion Plus

Glamour Glamour - FI

Splendor + Super Splendor Splendor NXG Hero Honda Karizma

Hero Honda Sleek

Hero Honda CBZ X-TREME

Karizma ZMR FI

Hero Honda Hunk >> SCOOTERETTES/MOPEDS Hero Honda Pleasure Hero Panther Hero Stepmatic Hero Stepmatic Hero Winner Hero Ankur Hero Puch Automatic Hero Street Hero Puch Automatic Hero Gizmo Hero Sakhti 3G Hero Winner Hero Sakthi 3G

India's Motors On
Recession or not, Hero Honda is still hell on two wheels.

The Wild One: ''We're gunning for growth,'' says CEO Pawan Munjal.

What Pawan Munjal has been up to lately could raise a lot of eyebrows given the current condition of global capitalism. He's bestowing general pay raises while releasing several new products, with a promotional budget to match. His top dealers will be dispatched on a junket to gambling, show and shopping meccas. Pawan himself took off for a week of golf with his buddies that included attendance at the Masters Tournament in Augusta, Georgia. But wait. The Indian company he runs, Hero Honda Motors, is also doing something a little shocking: It boosted sales of its motorcycles by 12% in the latest fiscal year through March--to $2.7 billion--and enjoyed a 32% hike in net income. Shareholders, who've seen their stock outpace the domestic index more than twofold, rising 50% in 2009, are hardly in a mood to question their CEO's moves. India's leading maker of motorbikes, the country's most popular form of personal transport, Hero Honda is a quarter-century-old pairing of the Munjal family's Hero Group and Honda Motor. Each has 26%. These days Honda has a particular reason to be grateful for the link: It has suffered a 77% earnings plunge in a brutal auto market. With a record 3.7 million unit sales, mostly motorcycles, Hero Honda widened its lead over Bajaj Auto, its main competitor. Hero Honda's 57% share of India's motorcycle market makes it look pretty much unbeatable now. "These numbers are mind-boggling, even for us!" declares Pawan. "What's the secret? A lot of hard work and a little bit of luck, I guess, can create magic."

So, whether it's the nine new models launched last year--more are in the pipeline--or the $13 million to cosponsor the hot Twenty20 cricket circuit or the average 8% pay hike just given or the allexpenses-paid trek to Macau and Hong Kong that the 200 best dealers will get in July, Hero Honda's boss is determined to keep the magic alive. "We're gunning for growth in tough times, so we want our entire team to be behind that goal," says Pawan over lunch at Hero Honda's factory in Gurgaon, on the outskirts of New Delhi. The plant, which he visits frequently from the corporate office in South Delhi, is one among Hero Honda's three factories. Producing 1.4 million bikes annually, it's the epitome of Japanese efficiency seamlessly transplanted into an Indian setting. Golf carts take visitors around the impeccably landscaped 70-acre site, geared to churning out a motorcycle every 18 seconds. A factory supervisor, leading a tour of the plant, proudly points to the robots manning the welding line, their cost justified by a speed and accuracy that pencils out better even than Indian labor rates. The shop floor, he boasts, is "Honda clean." Next to the main assembly line is an open space where white-uniformed workers gather every day before their shift begins. In a far cry from Honda's Japan factory calisthenics, the morning ritual involves chanting a popular Indian prayer, which has been modified to include an appeal that Hero Honda remain number one. In what is the world's second-largest two-wheeler market after China, Hero Honda has held the top slot for eight years now. Today every other bike sold in India bears the Hero Honda badge. The Splendor, its mainstay bike, priced at $800, dominates the 100cc motorcycle segment, a category that accounts for two-thirds of all two-wheelers. More than a million Splendors are bought yearly, making it the world's largest-selling motorcycle. Auto analysts say Hero Honda's success formula combines Honda's engineering muscle with the Munjals' market savvy, including a knack for reaching customers in the countryside--which in India, just like in China, is proving to be a source of growth in the current slowdown. Says Hormazd Sorabjee, editor of Autocar India magazine: "You can't go wrong with Hero Honda bikes. Their fuel efficiency, reliability and durability make them so perfect for Indian consumers. The Munjals know the pulse of the market." Pawan's father, Hero group patriarch Brijmohan Lall Munjal, 85, who still chairs Hero Honda, insists the rural touch is nothing new. Hero was founded by him and his three brothers as a trader and maker of bicycle parts. When the group graduated to making bicycles, the bulk of its sales were in rural India. "We simply transferred that same approach to motorcycles," says Munjal senior, who has long since moved out of daily operations. By reading the market correctly, notably the shift in buyers' preference from stodgy scooters to fourstroke motors, Hero Honda was able to finally topple long-standing scooter king Bajaj in 2001. To recover lost ground, Bajaj drew on technology from Kawasaki and jazzed up its portfolio,

emphasizing premium motorcycles. For a while it looked as if a newly revved-up Bajaj would close the gap to reclaim the crown. But the downturn played to Hero Honda's advantage. "Bajaj's strategy of moving away from the lower segment to concentrate on high-end bikes backfired when the economic cycle turned and consumers got jittery. Hero Honda seems to have all the right products for recessionary times," observes V.G. Ramakrishnan, senior director for automotive and transportation at consulting firm Frost & Sullivan India. It helps that Indian bikers have come to regard Hero Honda bikes as the most fuel-efficient in the market. It's an image nurtured by one of its earliest ad slogans: "Fill it. Shut it. Forget it." Even today, boasts Pawan, "When people have to spend their hard-earned money, they choose us." The beginning of a credit squeeze that caused interest rates to soar led to a decline in the twowheeler market in the year to March 2008. Hero Honda itself saw growth turning flat. Noting that sales were slowing mainly in big cities, Pawan figured it would be better off chasing hinterland customers. Hero Honda already had a rural presence, but to tap into it with greater vigor, he set up a separate sales division within the company with the mandate to reach "every village, every home." Today company dealers have a field force of 500 rural sales executives. It was a timely move. Although Indian agricultural growth remains only 3%, a massive loan waiver in last year's federal budget has put more cash in farmers' hands. Hero Honda's salespeople are trawling the smallest of villages for potential buyers. One important stop is Mansar Kheri, near the pink city of Jaipur in the desert state of Rajasthan. Its population of 3,300 includes 300 Hero Honda bike owners. Among them is former village chief Tejaram Mungena, a 52-year-old farmer. His family owns four. On a recent sweltering afternoon Mungena recounts the reasons for his brand loyalty: low maintenance costs, availability of spares and a great resale value. Moreover, Hero Honda bikes are sturdy enough, he adds, for a variety of common uses, from accommodating four people at a time to carrying as many as six drums of milk. He relates a joke doing the rounds in his village: It doesn't matter where your bride is from as long as your bike is a Hero Honda Splendor. To make scarce credit available to customers like Mungena is a challenge these days. Hero Honda's solution is to partner with banks and finance companies to conduct frequent loan "fairs." A recent one held in Jatwara, a village in Rajasthan, was titled as Guru Dakshina, or "an offering to the guru." The daylong event, in the community hall of the local temple, was attended by government school teachers in the area. Two Hero sales executives in sweat-soaked shirts made a PowerPoint presentation on the thrills and spills of owning a Hero Honda bike to the 200-strong audience.

Mahesh Vardhani, who runs Vardhani Motors, a service and spare parts dealership for Hero Honda in the region, explains that teachers are a prime target as they are opinion leaders and banks seem inclined to lend to them. He's able to provide them instant financing and immediate delivery against documented proof of salary. Since the loan fairs started this year Vardhani's sales have doubled from 50 to 100 bikes a month. So far, so good. Rural sales contribute 40% to Hero Honda's overall total, up from 35% in 2007. Pawan plans to add 600 more sales points this year to the existing 3,500. Rural markets, he reckons, will account for half of all sales within a couple of years. Although the Munjal clan today is among India's richest, with a fortune pushed well over $1 billion by the recent rise in Hero Honda's stock, third-born son Pawan remembers growing up in a modest house headed by his father and three uncles in Ludhiana. He studied mechanical engineering, then took a shop-floor job 33 years ago at the family's bicycle plant. Later he was put in charge of running a unit to manufacture mopeds. As the motorcycle venture started, older brother Raman was chief executive. Raman's untimely death from a heart attack in 1991 pushed Pawan eventually to the forefront. A tough taskmaster, hell-bent on keeping up the company's growth rate up this trying year, Pawan is an active standardbearer for his industry. Last year, in a bid to spur sales, he lobbied successfully to get the excise duty (a production tax) on two-wheelers reduced. But then there is his golf fix. He enjoys mixing it up with touring pros at links around the world, though even with periodic top instruction, his work regimen has kept him from improving on a 14 handicap. An occasional golf partner is Fumihiko Ike, chief executive of Asian Honda Motor, who oversees the Asian region (excluding Japan and China) from Bangkok. The Indian joint operation accounts for nearly a third of the 12 million motorcycles Honda sold in Asia overall last year. Ike was part of the team sent to India in the 1980s that did the feasibility study for the Indian venture after the Munjals had been selected as partners. He expects shrinkage this year in the Asian two-wheeler market, with India and Vietnam being notable exceptions. As part of its two-wheeler efforts, Honda throws Hero a bit of a googly: In 1999 the Japanese giant took advantage of eased regulations to set up Honda Motorcycle & Scooter India, a Honda-owned subsidiary, which started off making scooters but has moved into motorcycles. Hero Honda, in turn, has launched the Pleasure, a gearless scooter aimed at women, tapping into what Pawan says is a scooter renaissance. Speculation that Honda will eventually break off with the Munjals has dogged the alliance for several years. The company's ongoing technology agreement with Honda runs until 2014 with the Japanese partner represented in the Indian company by a joint managing director and a few technical experts. Acknowledging that Honda's tech prowess has served them well, Pawan is sanguine. "Things are

going absolutely fine," he insists, "but if anything should come to pass, then we're capable of standing on our own." The bigger challenge for the Munjals might come from the so-called Nano effect, a reference to Tata's newly launched $2,000 car and its lure to India's aspiring multitudes. Despite a celebrated urban rush for the still scarce Nanos, Pawan doesn't foresee a mass upgrading from the two-wheeler segment. But it's all the more reason to go from village to village for new customers. Improving that golf handicap may have to wait.

Company profile
Hero is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda company,India. During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it - Shut it - Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception. Hero Honda has three manufacturing facilities based at Dharuhera and Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are capable of churning out 3.9 million bikes per year.
[citation needed]

Hero Honda's has a large sales and service network with over 3,000 dealerships and service

points across India. Hero Honda's customer loyalty program,[clarification needed] the Hero Honda Passport Program, claims to be one of the largest programs of its kind in the world with over 3 million members. The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at 108.[6]

History
India became the second largest two wheeler manufacturer in the world and starting in the 1950s with the Automobile Products of India (API)that manufactured the Lambrettas and Bajaj Auto Ltd. with its association with Piaggio of Italy (manufacturer of Vespa scooters) as the largest manufacturers within the country. The license raj that existed between the 1940s to 1980s in India did not allow foreign companies to enter the market and imports were tightly controlled. This regulatory maze, before the economic liberalization, made business easier for local players to have a sellers market.[neutrality is disputed] Customers in India were

forced to wait up to 12 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not need a marketing department, only a dispatch department. By the year 1990, Bajaj had a waiting list that was twenty-six times its annual output for scooters.[citation needed] The motorcycle segment had the same long wait times with three manufacturers: Royal Enfield, Ideal Jawa, and Escorts. Royal Enfield made a 350cc Bullet with the only four-stroke engine at that time and took the higher end of the market but there was little competition for their customers. Ideal Jawa and Escorts took the middle and lower end of the market respectively.[citation needed] In the mid-1980s, the Indian government regulations changed and permitted foreign companies to enter the Indian market through minority joint ventures. The two-wheeler market changed with four IndoJapanese joint ventures: Hero Honda, TVS Suzuki, Bajaj Kawasaki and Kinetic Motor Company (Kinetic Honda). The entry of these foreign companies changed the Indian market dynamics from the supply side to the demand side. With a larger selection of two-wheelers on the Indian market, consumers started to gain influence over the products they bought and raised higher customer expectations. The industry produced more models, styling options, prices, and different fuel efficiencies. The foreign companies new technologies helped make the products more reliable and with better quality. Indian companies had to change to keep up with their global counterparts.[citation needed]