Hero Honda
Introduction:
The Indian two-wheeler industry is experiencing a major shift in its shape andstructure. The established players in the industry are taking a hard look at theirportfolio of products and are in the process of reshuffling them to meet theexpectations of customers. The beneficiary is of course the consumer, who hasan increased array of products to choose from. The last four-five years have brought about a great change in the consumerpreferences for two-wheelers. The market leaders of yesteryears are beingdriven to maintain their leadership position in the forthcoming years. Those whohave had a great going in the last few years are fighting hard to retain their newsupremacy. The two-wheeler industry is perhaps the most happening place interms of new models launched, upgraded products and innovative marketingtechniques. Gone are the days of regulation when the production of scootersand motorcycles was limited to two or three brands and the number of productsproduced was decided by the Government; today the Indian two-wheelermarket is highly competitive with numerous players who offer anything andeverything a consumer demands and that too at affordable price. From a sellersmarket where one had to wait for a scooter for 12 years to the days when youcan just walk into any showroom and drive out in the vehicle of your choice, themarket of two-wheelers in India has come a long way. But this is only thebeginning of the transformation.
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Hero Honda
The Industry:
The Indian two-wheeler industry is dominated by three players, Bajaj, HeroHonda and TVS Suzuki, who account for 80 percent of the total two-wheelermarket. The other players including Kinetic Engineering, LML and othersaccount for the remaining 20 percent of the market. The industry can bedivided into three broad segments: Scooters, motorcycles and mopeds. In thescooters segment Bajaj is the market leader, Hero Honda is the market leader inthe motorcycles segment and in the segment of mopeds, TVS controls themajor chunk of the market.Most Indian players in the two-wheeler industry had been into some kind of strategic alliance, technical collaboration or joint venture with foreign players,mainly Japanese firms. Hero-Honda, is a joint venture between the Munjal-promoted Hero Group and Honda Motor Co. of Japan; TVS-Suzuki was analliance with TVS and Suzuki Motors (till September 2001); Bajaj-Kawasaki a joint venture between Bajaj Motors and Kawasaki; and Yamaha-Escorts, a jointventure between Escorts and Yamaha Motor Corp. (till June 2001).
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Hero Honda
Hero Honda
The story of motorcycles in India is a good case study of how fortunes changeovernight. Motorcycles in India were hardly popular and Hero Honda was theonly player, which had carved a niche for motorcycles. Its market was small andlimited while scooters ruled the roost but today, it is one of the biggest successstories. Its established presence in the motorcycle segment had stood it in goodstead in this phase of boom in motorcycle sales. The fact that no other playercommanded the brand name which Hero Honda enjoyed in motorcycle segmentalso added up to its success. In addition most other players such as Bajaj, TVS,LML etc., took time to assimilate the change in customer preferences and comeup with models to buck the trend. Meanwhile Hero-Honda's designs were readyon the platter. Its R&D had been able to come up with models such as CBZ,Passion etc., in the premium segment to capture the hot demand. Riding highon the expectations of consumers, Hero Honda has successfully crossed overthe one million units mark in motorcycle sales. Its popular model Splendor is thelargest selling motorcycle in the world. To give a boost to its youthful image the company has chosen Saurav Gangulyand Hrithik Roshan as brand ambassadors. The company has also embarked onin-film advertising in a forthcoming Hindi movie. In order to expand its reach torural areas, the company has recently launched a marketing initiative in townswith a population of less than 50,000 in Uttar Pradesh. As a part of thisinitiative, it started a mobile workshop and showroom, through which peoplewill be able to gather knowledge about the companies' vehicles and can alsobuy them. These mobile marketing efforts are focused on Splendor and Joy.
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