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COVER PAGE Title : Two-wheeler Industry



Strategic Management










Subject tutor


Mr. L. Surender

Name of Student


Arun Prakaash V.G

Register no.



Date of submission


March31 2010

Word count



Word Limit





it stands next to Japan and china in terms of number of two-wheelers produced and sold.INTRODUCTION TO TWO-WHEELER INDUSTRY: Automobile Industry is one of the largest industries in global market. 9 motorcycle manufacturers and 3 mopeds manufacturers.49% which is highest when compared to the category wise market share with passenger vehicles. In earlier day¶s Two-wheeler industry had three segments one is bike and other two being Scooters and mopeds. Twowheeler segment is one of the most important components of the automobile sector which has been in existence in the country since 1955.1.49% Passenger Vehicles Commercial Vehicles Three wheelers Two wheelers 3 .95% 3. India is the second largest twowheeler market in the world. TABLE: 1 Passenger Vehicles Commercial Vehicles Three wheelers Two wheelers CHART: 1 DOMESTIC MARKET SHARE FOR 2008-09 15. due to new technologies and innovation. again gear bikes are classified in to two-stroke engine and four stroke engine. the domestic market share in 2008-09 for two-wheelers industry is 76. Bikes are also divided in to two groups automatic gear bikes and gear two-wheelers.6% 76.96.96% 3.95 and 3. but in present we can see mostly bikes since there is not that much of scooters and mopeds are produced nowadays.6 respectively as shown in Table no. INDUSTRY COMPARISON: According to SIAM (Society of Indian Automobile Manufacturers). In India there are 7 scooters manufacturers. 3. So we are mainly going to look at the bikes in two-wheelers industry. Recently the biggest seller of scooters that is Bajaj Auto has stopped producing or selling scooters since there is no demand in the market for the scooters. commercial vehicles and three wheelers which has market share of 15.

Even in Automobiles Export trends two-wheeler Industry captures the first position in terms of number of vehicles sold in a year when compared to that of passenger vehicles. two strokes and four stroke and also bikes are available in different kind of ³cc´ (which implies speed of the bike in technical terms) which varies from 100cc to 350cc. Yamaha and TVs motor company Ltd. because it highly influenced the middle income group people to go for the two wheeler. In 2008-09 Hero Honda is positioned at number one in terms of maximum number of vehicles sold in a year. Because there is lot of difference given to 4 . Since bikes are available with gears and without gears. commercial vehicles and three wheelers.Aggressive marketing by the auto finance company have also played enormous and significant role in boosting automobile demand. Sometimes even low income group people afford to buy two-wheelers because of easy installment options. From seeing Table no.2 we can clearly see that two-wheeler has played major role in all the three years and also market share of key players have given in chart no. Automobile Export trends ± Table: 2 YEAR Passenger vehicles Commercial vehicles Three-wheelers Two-wheelers 2006-07 198452 49537 143896 619644 2007-08 218401 58994 141225 819793 2008-09 335739 42673 148074 1004174 CHART: 2 MARKET SHARE OF MAJOR PLAYERS IN TWO-WHEELER INDUSTRY: 14% 18% Tvs motors Bajaj auto ltd 41% 27% Hero honda Others WHY SO MUCH GROWTH??? In India major key players in two wheeler industry are Hero Honda Motors Ltd (HHML).2 which shows her0-honda covering major portion compared to all others. Bajaj Auto.

100 to 135cc ± Glamour.Pulsar. Super Splendor.extreme.people it attracts more segments of people. disc break etc« it makes most of the people to go for the two-wheeler and also it attracts low middle income group people to high income group people since bikes are available from low-end to very high-end in terms of technology and money.150. Splendor plus. Since lot of technologies has developed in two-wheelers like push start.class transport Fuel-Efficient Comfort level. TVS MOTORS: Up to 100cc ± Scooty pep+. More than 150cc. But in India as per driving rules license is given to the people only when they attain the age of 18. 220 DTSi. alloy wheels. 180. PRODUCT SEGMENTATION OF MAJOR PLAYERS IN TWO-WHEELER INDUSTRY: HERO HONDA: Up to 100cc ± CD Dawn. Avenger DTSi. Splendor NXG. Kristal DTSi. CBZ. Hunk and Karizma. More than 150cc . Discover 135. it attracts both the gender since bikes are available with gears and without gears and it attracts age group from 12 to 56. But nowadays even people aged before 12 are used to drive bike and also above the age of 56.125 DTS Si. Star City 100 to 135cc ± Flame. Passion plus. maximum mileage bike. BAJAJ: Up to 100cc ± Platina. CD Deluxe. Apart from this the factor which influence the growth of two-wheeler industries are as follows: y y y y y y Lower interest rates Easing liquidity situation Modernization of young generation A well-equipped middle. Victor GLX 5 .Achiever. 200. 100 to 135cc ± XCD.

interest rate. The corrections in Excise duty on electric vehicles which will enable the manufacturers take CENVAT credit and exemption of customs duty on Electric Vehicles parts and also weighted deduction for in-house R&D to 200% from 150% and outsourced R&D from 125% to 175%. trade regulation. Consequently. Abundance of low labour and raw material gives India an upper hand in the export. Abundant and low cost labour coupled with local availability of raw material like steel. with riders opting for a powered two-wheeler as a cost-efficient alternative to infrequent and expensive public transport system. PEST ANALYSIS ON TWO-WHEELER INDUSTRY: Political. 6 . exchange rate and inflation rate. Socially many motor cycle organization raise money for charities through organized ride and events. India is the second largest motorcycle markets in the world next to China. Social Aspects ± Social aspects of two-wheelers industry are Popularity. aluminum and natural rubber has placed India amongst the low cost producing centers of two-wheelers. motorcycles are the primary means of motorized transport. This would encourage industry that much because this price hike isn¶t expected to impact sales in a significant way as a majority of two-wheeler buyers were prepared. CARE Research anticipants buoyant growth in two-wheelers exports as well. social and technology are those factors which affects the external environment. Economic Aspects ± Economic factor are those which is influenced by economic growth.More than 150cc. Since there is a rule in some of the main states and cities in India to wear helmet while riding two-wheelers to make them safe from accidents makes two-wheeler riders to have a safe journey. and to certain extend braced up and ready to shell out extra money for their favorite set of wheels. those reasons are increasingly practical. Since many auto finance company laid easy installment rules with less interest rate it makes more segment people to go for it. Motor-cycle gives a great advantage to the specified designation where other buses cannot enter. or as a means of avoiding or reducing the effect of urban congestion. Mobility and safety. economic. political influence and some of the rules and regulation of government policies which is considered in political analysis.Apache RTR. In numerous cultures. Many people ride motorcycle for various reasons. Subculture. Political Aspects ± Tax policies.

Technical Aspects . The other players are Kinetic. cost and aesthetics desired by the designers. fuel economy. Two-wheelers domestic market growth rate for 2008-09 is 76. Passenger and commercial vehicles. Different types of two-wheelers have different dynamics and these plays a vital role in their performance.49% which is very high when compared to that of three wheelers. Motorcycle is the best fuel economy mode of transport. 7 .seller relations: Bargaining power Competitive pressures from seller ± buyer relations: Bargaining power. aluminum and rubber. (HHML). Bajaj Auto ltd and TVS motor Company ltd. Passenger and commercial vehicles. Two-wheeler construction is the engineering. Since sufficient bike accessories are available in many place two-wheeler riders has a privilege to change the broken parts very easily. Royal Enfield ltd and Honda motorcycle & scooter India. Nowadays two-wheelers is designed to give more than 80km mileage per liter with low maintenance cost. Indian Auto policy 2002 gives added advantage to two-wheeler manufacturers to enter even other countries outside India. Construction of two-wheeler includes steel. Sales of two-wheelers are very high when compared to that of three wheelers. Yamaha. dynamics and accessories. aluminum frame. Majestic auto ltd.Technical Aspects in Two-wheeler industry includes construction. The standardized product used in manufacturing of two-wheelers is steel. telescopic forks and disc brakes. Only the companies which are in automobile line will expand their product line like Mahindra. electric motorcycles. PORTER¶S 5 FORCES ANALYSIS Porter¶s five forces Model of Competition are as follows: y y y y y Rivalry among competing sellers Potential new entrants Substitute products Competitive pressures from supplier . Invention of Electric motorcycle gives an added advantage since the two-wheeler users can avoid using petrol. manufacturing. because there are many industries in India for manufacturing those standardized product the production is going smooth. RIVALRY: The key players in two-wheeler industries are Hero Honda motor ltd. and assembly of components and systems for two-wheelers which results in performance. Lml. Since big manufacturer plant with high technology and good R&D team needed many of them dose not enter in two two-wheeler Industries.

Buyers are very conscious in spending their money to purchase two-wheeler. Because of low cost production. These are the substitute product available to two-wheelers. Seller ± Buyer Relations: Buyer has added advantage than seller because there are five to six big popular brands of two-wheelers are available in India. Supplier ± Seller Relations: Since their selling units are very high in two-wheeler industry and because of many competitors supplier are very high. 8 . because it attracts most of the middle-income group¶s seller cannot price their product very high. buses are available from normal buses to hi-tech ac buses which is threat to two-wheeler industry. this industry enjoys good growth rate and profitability. Since full information is available to the buyers about their product details and their prices buyers are fully aware of seller costs and products. so that they can switch brand from one another. aluminum. Auto transportation and even low-end cars. tyres and tubes. Sometimes low-end car is a substitute product for the people using high-end motor cycles. Since bus service has increased when compared to five years back people who are aged above 45 years uses buses because of their health condition. Since each company in industry change the model on going basis to show differentiation among their competitors because of this there is more learning and experience in this field. Since they change their models on going basis they create good relationship between their suppliers. Each company in industry not only makes differentiation in their product strategy but also makes differentiation in the promotional strategy to create´ brand preference and loyalty´. but people using twowheelers can only use the service of buses and auto as a substitute product. Because service centers and spare parts shop available to their customer very near to their place buyer sometimes do not mind spending little money extra. Because nowadays there is lot of segment in buses in urban areas and the private companies also influenced very much. Since only two people can travel in a bike most of them uses auto when they go out with their family and if they are affordable to buy car will use car instead of auto. Some of the components in two-wheeler industry are very common for all the twowheeler industries like steel. Nowadays people go to unique brand because of the good service they provide after purchase. these material are available in abundant. Since high technology and raw material resources are abundant to produce the production cost is less in producing twowheelers.Potential New Entrants: Capital investment is very huge in two-wheeler industries since large plant and large machineries needed with skilled labours and good R&D team needed for producing two-wheelers. Substitute Product: Substitute products for two-wheeler industries are bus transportation. These factors create good relationship between them. This makes them to drive a smooth production of their finished products.

CONCLUSION: My recommendation to the two-wheeler industry: Nowadays designing of two-wheelers industries seems to be aiming only at youngsters. The two-wheeler industry should concentrate on reducing their bike prices because there is not that much difference of price between high-end bikes and low-end cars (e. they have to aim at providing some technology which also convinces people who are aged above 40. 100cc segment two-wheelers demand falls down which has traditionally enjoyed the maximum market share. Because of the different segments in two-wheeler industry.: Nano). i. they promises us that their product would give 80 Km/per liter but product will result in giving lesser than that even after following their guidelines. Sometimes there is variation between the mileages too.e.g. They have to think on these technologies and give some added on facilities to their products. Many of them are affected with back pain while riding low or middle cost two-wheeler and also shock-ups life is very minimum. 9 .

com/ http://www.fadawebs. AA (2005) Crafting and Executing Strategy. McGraw Hill.herohonda.com www.bajajauto. New York.REFERENCES: www.tvsmotor.com Thompson.in/ http://www.siamindia.com/ 10 . 14th Edition http://www.

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