LETTER OF TRANSMITTAL
TO Mr. Keshav Singh
This is to the reference of project “Auto mobile two wheeler” assigned by you on date 19/08/08 to the group “F” section –B (PGDM). This project basically deals in two wheeler sector “Hero Honda” and the factors affecting its business environment like current happenings in the industry, government policies, and competitor’s analysis. Basis of the analysis is Porter’s five force model. Source of the content for this project is internet. This project also gives some light on other two wheeler sectors in India. Due date for the completion and submission of this project is 22/09/08. Sincerely yours MANISH KUMAR SAHOO
PROJECT ON TWO WHEELER COMPANY HERO HONDA
SUBMITTED TO MR. KESHAV SINGH
SUBMITTED MANISH KUMAR SAHOO
Automobile is one of the largest industries in global market. Being the leader in product and process technologies in the manufacturing sector, it has been recognized as one of the drivers of economic growth. During the last decade, well directed efforts have been made to provide a new look to the automobile policy for realizing the sector's full potential for the economy. Steps like abolition of licensing, removal of quantitative restrictions and initiatives to bring the policy framework in consonance with WTO requirements have set the industry in a progressive track. Removal of the restrictive environment has helped restructuring, and enabled industry to absorb new technologies, aligning itself with the global development and also to realize its potential in the country. The two-wheeler industry has been in existence in our country since 1955. Two-wheeler segment is one of the most important components of the automobile sector that has undergone significant changes due to shift in policy environment in India. The composition of the two-wheeler industry has witnessed sea changes in the postreform period. It consists of three segments viz. scooters, motorcycles and mopeds. 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. Hero Honda, the ‘World No.1’ two wheeler manufacturer for past 5 years in row is a joint venture between India's Hero Group and Honda Motor Company, Japan has not only created the world's single largest two wheeler company but also one of the most successful joint ventures worldwide.
LTD TYPES OF TWO-WHEELERS IN INDIA:
• HERO HONDA'S MISSION • HERO HONDA'S MANDATE • CORPORATE SOCIAL RESPONSIBILITY (CSR)
PORTER’S FIVE FORCE MODEL
• THREAT OF NEW COMPETITORS • RIVALRY AMONG EXISTING FIRMS IN INDUSTRY
THREAT OF SUBSTITUTE GOODS/SERVICES
• SUPPLIERS BARGENING POWER • BARGAINING POWER OF CUSTOMERS:
executive summery about the sector • EVOLUTION OF TWO-WHEELER INDUSTRY IN INDIA • A GROWTH PERSPECTIVE
• • • • •
major players in the sector
HERO HONDA MOTORS LTD: BAJAJ AUTO LTD TVS MOTORS: YAMAHA MOTOR PVT.
Recent happening on two-wheeler sector Recent happening on hero Honda
KEY FACTORS INFLUENCING DEMAND OF TWOWHEELER KEY FACTORS AFFECTING THE SALES OF MOTORCYCLES:
This lead to the strong growth of Indian automobile industry. there were only a handful of two-wheeler models available in the country. The openness of Indian market to foreign companies lead to the arrival of new models of two-wheelers into India. Indian companies are among the largest two-wheeler manufacturers in the world. Currently. Manmohan Singh. The two-wheeler market was opened to foreign companies in the mid 1980s. Bikes are a major segment of Indian two wheeler industry. Previously. Indian two-wheeler industry has got spectacular growth in the last few years. now Prime Minister of India. Hero Honda and Bajaj Auto are two of the Indian companies that top the list of world companies manufacturing two-wheelers.India is the second largest producer and manufacturer of two-wheelers in the world. the other two being scooters and mopeds. The two-wheeler industry in India has grown rapidly in the country since the announcement of the process of liberalization in 1991 by the then finance minister Dr. India is the second largest producer of two-wheelers in the
. Indian two-wheeler industry had a small beginning in the early 50's. The Automobile Products of India (API) started manufacturing scooters in the country. 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. Easy availability of loans from the banks.
Hero Honda Motors Limited. It specializes in dual use motorcycles that are low powered but very fuel efficient. It has been the world's biggest manufacturer of 2wheeled motorized vehicles since 2001. In the year 2005-2006. Third plant at Haridwar. both in India. India. Hero Honda's Splendor is the world's largest selling motorcycle. One of the chief factors is poor public transport in many parts of India. Hero Honda is a joint venture that began in 1984 between the Hero Group of India and Honda of Japan. when it produced 1. two-wheelers offer a great deal of convenience and mobility for the Indian family. based in Delhi. is the world's largest manufacturer of motorcycles.3 million motorbikes in a single year. It will have production facilities such as Lean Manufacturing concept. Additionally. Uttaranchal has also started production by April. It stands next only to China and Japan in terms of the number of twowheelers produced and the sales of two-wheelers respectively.
. more flexible lines & stream line material flow. within & proximity (planning to set vendors in nearby locations constituting HHML Park). 2008.world. the annual production of two-wheelers in India stood at around 7600801 units. Its 2 plants are in Dharuhera and Gurgaon. The trend of owning two-wheelers is due to a variety of facts peculiar to India.
The liberalization policies have led to continuous increase in competition which has ultimately resulted in modernization in line with the global standards as well as in substantial cut in prices. Steps like abolition of licensing. well-directed efforts have been made to provide a new look to the automobile policy for realizing the sector's full potential for the economy. During the last decade.
EVOLUTION OF TWO-WHEELER INDUSTRY IN INDIA
. and enabled industry to absorb new technologies. especially from the population in the middle income group. Being the leader in product and process technologies in the manufacturing sector.ABOUT THE SECTOR
Automobile is one of the largest industries in global
market. Aggressive marketing by the auto finance companies have also played a significant role in boosting automobile demand. Removal of the restrictive environment has helped restructuring. removal of quantitative restrictions and initiatives to bring the policy framework in consonance with WTO requirements have set the industry in a progressive track. it has been recognized as one of the drivers of economic growth. aligning itself with the global development and also to realize its potential in the country.
the share of two-wheelers in automobile sector in terms of units sold was about 80 per cent during 2003-¬04. which ultimately took a more prominent
.Two-wheeler segment is one of the most important components of the automobile sector that has undergone significant changes due to shift in policy environment. entry of firms. According to the figures published by SIAM. were effectively controlled by the State machinery. Recognition of the damaging effects of licensing and fettering policies led to initiation of reforms. It consists of three segments viz. motorcycles and mopeds. choice of products including capacity mix and technology. scooters. This controlling mechanism over the industry resulted in: (a) several firms operating below minimum scale of efficiency. The lapses in the system had invited fresh policy options that came into being in late sixties. In the initial years. This high figure itself is suggestive of the importance of the sector. all critical areas of
functioning of an industry. capacity expansion. Amongst these policies. The two-wheeler industry has been in existence in the country since 1955. (b) underutilization of capacity. Monopolies and Restrictive Trade Practices (MRTP) and Foreign Exchange Regulation Act (FERA) were aimed at regulating monopoly and foreign investment respectively. and (c) usage of outdated technology.
However. the major set of reforms was launched in the year 1991 in response to the major macroeconomic crisis faced by the economy.
. In 1991. Finally. with various policy measures undertaken in order to increase the competition. the two-¬wheeler industry in the country has been able to witness a proliferation of brands with introduction of new technology as well as increase in number of players. deregulation of the industry has not really resulted in higher level of competition.
A GROWTH PERSPECTIVE
The composition of the two-wheeler industry has witnessed sea changes in the post-reform period. though the degree of concentration has been lessened over time. weaker players died out giving way to the new entrants and superior products and a sizeable increase in number of brands entered the market that compelled the firms to compete on the basis of product attributes. However. the share of scooters was about 50 per cent of the total 2-wheeler demand in the Indian market.shape with the introduction of the New Economic Policy (NEP) in 1985. The industrial policies shifted from a regime of regulation and tight control to a more liberalized and competitive era. Two major results of policy changes during these years in two-wheeler industry were that the.
The most likely scenario assumed annual growth rate of Gross Domestic Product (GDP) to be 5. A clear picture of the motorcycle segment's gaining importance during this period is exhibited by the Figures 1.Motorcycle and moped had been experiencing almost equal level of shares in the total number of twowheelers. which takes into account both time series and cross section variation in data. The projections have been made at all India and regional levels. Estimations were based on Panel Regression. the share of motorcycles increased to 78 per cent of the total two-wheelers while the shares of scooters and mopeds declined to the level of 16 and 6 per cent respectively. A panel data of 16 major states over a period of 5 years ending 1999 was used for the estimation of parameters. The forecasts had been made using econometric technique along with inputs obtained from a primary survey conducted at 14 prime cities in the country.5 per cent during 2002¬-03 and was anticipated to increase gradually to 6. National Council of Applied Economic Research (NCAER) had forecast two-wheeler demand during the period 2002¬-03 through 2011-12. Different scenarios have been presented based on different assumptions regarding the demand drivers of the two-wheeler industry. In 2003-04. The all11
. The models considered a large number of macro-economic.5 per cent during 2011¬-12. demographic and socio-economic variables to arrive at the best estimations for different two-wheeler segments. share and annual growth during the period 1993-94 through 2003-04. 2 and 3 depicting total sales.
Indian two-wheeler industry has got spectacular growth in the last few years. The high growth rate in motorcycle segment at present will stabilize after a certain point beyond which a condition of equilibrium will set the growth path. this will not alter the regional distribution to a significant extent. the other two being scooters and mopeds. However. Hero Honda and Bajaj Auto are two of the Indian companies that top the list
. Indian two-wheeler industry had a small beginning in the early 50's. Bikes are a major segment of Indian two wheeler industry. The demand for mopeds is not presented in this analysis due to its already shrinking status compared to' motorcycles and scooters.India and region-wise projected growth trends for the motorcycles and scooters are presented in Table 1. It is important to remember that the abovementioned forecast presents a long-term growth for a period of 10 years. The Automobile Products of India (API) started manufacturing scooters in the country. Another important thing to keep in mind while interpreting these growth rates is that the forecast could consider the trend till 1999 and the model could not capture the recent developments that have taken place in last few years. Indian companies are among the largest two-wheeler manufacturers in the world. India is the second largest producer and manufacturer of two-wheelers in the world.
The scooters are considered as family vehicles.
MAJOR PLAYERS IN THE SECTOR
After facing its worst recession during the early
1990s. The two-wheeler market was opened to foreign companies in the mid 1980s. the two-wheeler industry bounced back with a 25% increase in volume sales in February 1995. Major players in the 2-wheeler industry are
O O O O
HERO HONDA MOTORS LTD (HHML) BAJAJ AUTO LTD (BAJAJ AUTO) TVS MOTOR COMPANY LTD (TVS) YAMAHA MOTOR PVT. There are many two-wheeler manufacturers in India. This lead to the strong growth of Indian automobile industry. LTD
HERO HONDA MOTORS LTD:
. Easy availability of loans from the banks. The openness of Indian market to foreign companies lead to the arrival of new models of two-wheelers into India. 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.of world companies manufacturing two-wheelers.
IS THE WORLD'S LARGEST MANUFACTURER OF MOTORCYCLES1. IT IS BASED IN PUNE. THE COMPANY HAS SUCCESSFULLY CHANGED ITS IMAGE FROM A SCOOTER MANUFACTURER TO A TWO WHEELER MANUFACTURER. MOTORCYCLES AND THE AUTO RICKSHAW.HERO HONDA MOTORS LIMITED. ITS PRODUCT RANGE ENCOMPASSES SCOOTERETTES. ITS REAL GROWTH IN NUMBERS HAS
. BASED IN DELHI. SCOOTERS AND MOTORCYCLES. HERO HONDA IS A JOINT VENTURE THAT BEGAN IN 1984 BETWEEN THE HERO GROUP OF INDIA AND HONDA OF JAPAN. BAJAJ AUTO MAKES AND EXPORTS MOTORSCOOTERS. WHEN IT PRODUCED 1.AND THREE-WHEELER MAKER[CITATION NEEDED]. IT IS INDIA'S LARGEST AND THE WORLD'S 4TH LARGEST TWO. MORE DETAILS OF HEROHONDA WILL BE DISCUSSED IN THIS PROJECT.WALUJ (NEAR AURANGABAD) AND PANTNAGAR IN UTTARANCHAL. OVER THE LAST DECADE. MAHARASHTRA.3 MILLION MOTORBIKES IN A SINGLE YEAR. IT HAS BEEN THE WORLD'S BIGGEST MANUFACTURER OF 2-WHEELED MOTORIZED VEHICLES SINCE 2001. THE FORBES GLOBAL 2000 LIST FOR THE YEAR 2005 RANKED BAJAJ AUTO AT 1946 .
BAJAJ AUTO LTD:
BAJAJ AUTO IS A MAJOR INDIAN AUTOMOBILE MANUFACTURER. WITH PLANTS IN AKURDI AND CHAKAN (NEAR PUNE). INDIA.
AND THREE-WHEELERS IN INDIA. 1945 AS M/S BACHRAJ TRADING CORPORATION PRIVATE LIMITED.
In 1980 TVS 50. IT OBTAINED LICENSE FROM THE GOVERNMENT OF INDIA TO MANUFACTURE TWOAND THREE-WHEELERS AND IT WENT PUBLIC IN 1960. IN 1986. IN 1970. IN 1977. the TVS 50 had proved itself promising and successful in
every test and paved a way for many successes for TVS Suzuki. IT STARTED OFF BY SELLING IMPORTED TWO. THE COMPANY IS HEADED BY RAHUL BAJAJ WHO IS WORTH MORE THAN US$1. IN 1959. IN 1995. A byword for reliability. Likewise the TVS champ and super
.000 VEHICLES IN A SINGLE FINANCIAL YEAR. Southern India.000 VEHICLES IN A SINGLE FINANCIAL YEAR. IN 1985. India's first two-seater moped rolled out of the factory at Hosur in Tamil Nadu. IT MANAGED TO PRODUCE AND SELL 500.000TH VEHICLE. IT STARTED PRODUCING AT WALUJ IN AURANGABAD. IT ROLLED OUT ITS 100. IT ROLLED OUT ITS TEN MILLIONTH VEHICLE AND PRODUCED AND SOLD 1 MILLION VEHICLES IN A YEAR.5 BILLION BAJAJ AUTO CAME INTO EXISTENCE ON NOVEMBER 29.COME IN THE LAST FOUR YEARS AFTER SUCCESSFUL INTRODUCTION OF A FEW MODELS IN THE MOTORCYCLE SEGMENT. IT MANAGED TO PRODUCE AND SELL 100.
India Yamaha Motor is highly customer-driven and has a countrywide network of over 400 dealers. Yamaha acquired its remaining stake as well. who wanted looks fused with economy. LTD
Yamaha made its initial foray into India in 1985. These two wheelers together redefined the category of mopeds in India. India Yamaha Motor operates from its state-of-theart-manufacturing units at Faridabad in Haryana and Surajpur in Uttar Pradesh and produces motorcycles both for domestic and export markets.
YAMAHA MOTOR PVT.117 units (as of June 2007).133 units of two wheelers in June 2007. TVS later left its collaboration with Suzuki and started to manufacture its own vehicles.Champ gave a reliable and sturdy two wheeler to public. Presently. in August 2001. it entered into a 50:50 joint venture with the Escorts Group in 1996. it has introduced an entire range of 2-stroke and 4-stroke bikes in India. bringing the Indian operations under its complete control as a 100% subsidiary of Yamaha Motor Co. Since then. The company exported 9. Ltd. Japan. Subsequently. However. With a strong workforce of 2000 employees.. TVS Motors Company is currently the third largest two wheeler company in India with sales of 107. The company pioneered the volume bike segment with the launch of its 100 cc 2-stroke motorcycle RX 100. its
product portfolio includes Crux (100cc), Alba (106cc) and Gladiator (125cc).
The other key players in the two-wheeler industry are
KINETIC MOTOR COMPANY LTD (KMCL), KINETIC ENGINEERING LTD (KEL), LML LTD (LML), MAJESTIC AUTO LTD (MAJESTIC AUTO), ROYAL ENFIELD LTD (REL) AND HONDA MOTORCYCLE & SCOOTER INDIA (P) LTD (HMSI). TYPES OF TWO-WHEELERS IN INDIA:
There are mainly three types of two-wheelers available in India. They are o Scooters o Scooterettes/Mopeds. o MOTORCYCLES
SCOOTERS IN INDIA :
The scooter and the scooterette share in the Indian two wheeler market is 13.4%. The main models available in India are Bajaj Chetak, Honda Eterno, Kinetic Blaze, LML NV SPL and LML Select II.
TVS Motors launched India's first 50cc, 2 seater
moped: TVS Moped 50. TVS also launched India's first indigenous scooterette: Scooty in 1994. This segment has about one-fourth share in the Indian two wheeler industry. The major models available in India are Bajaj Wave, Bajaj Kristal DTSi, Bajaj Blade DTSi, Hero Honda Pleasure, Kinetic Kine, Kinetic 4S, Kinetic Nova, Kinetic Zoom, Kinetic V2 Range, Kinetic King 100, Kinetic Luna Super, Kinetic Luna TFR, Yo Smart, Honda Dio, Honda Activa, TVS Scooty and TVS XL.
MOTORCYCLES IN INDIA:
Bikes comprise a major segment of Indian two wheeler industry. Company : Bajaj Auto Ltd Company : HERO HONDA Achiever CD Dawn CD Deluxe Glamour Glamour-Fi Karizma Passion Plus Pleasure Super Splendor Splendor NXG CBZ X-Treme Company :
* Hero Honda * Bajaj Avenger * Hero Honda * Bajaj CT 100 * Hero Honda * Bajaj Platina * Hero Honda * Bajaj Discover * Hero Honda DTSi * Hero Honda * Bajaj Pulsar DTSi * Hero Honda * Bajaj Wave * Hero Honda * Bajaj Wind 125 * Hero Honda * Sonic DTSi * Hero Honda * Hero Honda Company : Company :
Kinetic Motor TVS MOTOR Company * Kinetic Aquila * Kinetic Boss * TVS Apache * Kinetic Challenger * TVS Centra * Kinetic Comet * TVS Fiero * Kinetic GF * TVS Star * Kinetic Stryker * TVS Victor * Kinetic Velocity
Yamaha Motor India * Yamaha CruxS * Yamaha G5 * Yamaha Gladiator
Hero Honda Motors Ltd (HHML), Bajaj Auto Ltd (Bajaj Auto) and TVS Motor Company Ltd (TVS) - accounting for over 80% of the industry sales as in 9MFY2005.
Hero Honda Motors Limited, based in Delhi, India, is the world's largest manufacturer of motorcycles. Hero Honda is a joint venture that began in 1984 between the Hero Group of India and Honda of Japan. It has been the world's biggest manufacturer of 2wheeled motorized vehicles since 2001, when it produced 1.3 million motorbikes in a single year. During the 80s, Hero Honda became the first company in India to prove that it was possible to drive a vehicle without polluting the roads. The company introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the imagination of commuters
. Two of these are based at Dharuhera and Gurgaon in Haryana and the third state of the art manufacturing facility was inaugurated at Haridwar. These are almost as many as the number of people in Finland. These comprise a mix of dealerships. the company sold half a million two wheelers in a single month—a feat unparalleled in global automotive history. Hero Honda bikes currently roll out from its three globally benchmarked manufacturing facilities. someone in India buys Hero Honda's top -selling motorcycle – Splendor. This festive season. Every 30 seconds. These plants together are capable of producing out 4. service and spare points. spare parts stockiest and authorized representatives of dealers located across different geographies. and Hero Honda sold millions of bikes purely on the commitment of increased mileage. Over 20 million Hero Honda two wheelers tread Indian roads today.across India.
Hero Honda's extensive sales and service network now spans over 3000 customer touch points. every second motorcycle sold in the country is a Hero Honda. and today. Uttrakhand in April this year. Ireland and Sweden put together! Hero Honda has consistently grown at double digits since inception.4 million units per year.
. As Brijmohan Lall Munjal. This would provide the growth ballast that would sustain Hero Honda in the years to come. Hero Honda is constantly working towards consolidating its position in the market place. Hero Honda Motors succinctly points out.
responsibilities.Hero Honda values its relationship with customers. systems and human resources. to produce products and services that meet the quality. "We pioneered India's motorcycle industry. but has also created a loyal community of brand ambassadors. the Chairman.Hero Honda Passport Program. Having reached an unassailable pole position in the Indian two wheeler market. The program has not only helped Hero Honda understand its customers and deliver value at different price points. one of the largest programs of this kind in the world. We'll do all it takes to reach there.''
HERO HONDA'S MISSION
Hero Honda’s mission is to strive for synergy between technology. The company believes that changing demographic profile of India. performance and price aspirations of its customers. has over 3 million members on its roster. Its unique CRM initiative . increasing urbanization and the empowerment of rural India will add millions of new families to the economic mainstream. and it's our responsibility now to take the industry to the next level. At the same time maintain the highest standards of ethics .
Toshiaki Nakagawa. CEO Industry Automotive Products Motorcycles. supply Japan.8 billion
. Scooters Revenue U$ 2. Joint Managing Director Mr. Founder Mr. India rs Brijmohan Lal Munjal. Chairman Key people Mr. Brijmohan Lal Munjal.
Type Public company BSE: HEROHONDA MOTORS Founded January 19. chain The and world-class and products with cutting edge technology from Honda teamwork commitment are manifested in the highest level of customer satisfaction.HERO HONDA'S MANDATE
Hero Honda is a world leader because of its excellent manpower. Pawan Munjal. 1984 in Gurgaon. extensive dealer network.
Hero Honda Motors Ltd. Motor efficient Company. and this goes a long way towards reinforcing its leadership status. Haryana. Managing Director. India Headquarte New Delhi. proven management.
. and education facilities for both adults and children-now nurtures a vibrant.Websi www. Haryana. This includes:
Installation of deep bore hand pumps to provide clean drinking water. Constructing metalled roads and connecting these villages to the National Highway (NH -8). The Company believes it has managed to bring an economically and socially backward region in Dharuhera. especially ones developed at the grassroots. The Foundation has adopted various villages located within vicinity of the Hero Honda factory at Dharuhera for integrated rural development.com te
CORPORATE SOCIAL RESPONSIBILITY (CSR) Hero Honda Motors takes considerable pride in its stakeholder relationships. educated and healthy community. An Integrated Rural Development Centre has been set up on 40 acres of land along the Delhi-Jaipur Highway. into the national economic mainstream. clean water. The Centre-complete with wide approach roads.Herohonda.
PORTER’S FIVE FORCE MODEL
Competitive Forces in the Task Environment
Threat Of new Competitors
Suppliers Bargaining Power
Rivalry among Existing firms In industry
Buyers Bargaining Power
Threat of Substitute Goods/services
THREAT OF NEW COMPETITORS-
providing hygienic water and toilet facilities.
Ensuring a proper drainage system at each of these villages to prevent waterlogging.
Kinetic Blaze. revolutionised the scooter market two decades ago by introducing the gearless scooter. ENTERS 2-WHEELER BIZ: Mahindra & Mahindra (M&M). its well known brands being Kinetic 4s.M&M BUYS KINETIC.
. vice-chairman and managing director. experience in building differentiated brands and utilising the strength of Mahindra Finance. the group also plans to make heavy commercial vehicles. M&M will buy the stake through a new joint venture in which it will hold 80 per cent and Kinetic the rest. which used to have a tie-up with Honda.
“There is strong evidence that two-wheelers are going to enjoy a renaissance.” said Anand Mahindra.
Mahindra said the group found it natural to “look at all aspects of the transportation business. Kinetic Motor Co. Kinetic Nova and Kinetic Flyte. India’s largest tractor and utility vehicle maker is buying the business assets of loss-making scooter maker Kinetic Motor Company for Rs 110 crore to gain an entry into the two-wheeler market.” To this end. He added that the group plans to build its twowheeler business on the back of its global sourcing expertise. Mahindra Group on Tuesday. The company today has motorcycle and scooter products.
THE NANO EFFECT: Nano is expected to be launched around Diwali and may lead to a 20 per cent reduction in prices of twowheelers and a 35 per cent decline in prices of second-hand cars. which comprises 90% of the two-wheeler market in terms of sales." says Dilip Chenoy of the Society of India Automobile Manufacturers (SIAM). the investment bank that advised Kinetic Motor on the deal. The 100-125 cc two-wheeler range. "Nano is expected to change the automobile market in India. “The alignment with M&M will help Kinetic compete with the big players in the two-wheeler business.
. according to industry chamber Assocham. It would cater to a typical middle income Indian family of four who wants to avoid rain. vice-president (corporate finance) at Ambit. Its freedom for four. Bike makers Hero Honda and Bajaj have realised this and have jumped into the bandwagon of ultra small cars. could be severely affected with the launch of Nano.Kinetic Motor Company also has an option to sell its 20 per cent stake in the new joint venture after seven years. wind and dust.” said Ashim Bhuvania.
however. stated that the Nano may bring 65 per cent more families into the range of those who can now afford a car. "I would definitely consider buying the Nano as the cost of the car fits my pocket and above all it gives good mileage. in a report." the Crisil research added. travels every day in a Bajaj Pulsar says. "The on-road price for a Nano is expected to be in the region of Rs 1. has been tepid.Rajesh an IT professional working with an MNC in Gurgaon who. Triumph. Consumer response. HIGHER-END BIKES TO ENTER: Towards the end of this year. Companies like Yamaha. Harley Davidson.3 lakh. Kawasaki. Ducati and MV Augusta have launched (or are planning to unveil) high-powered bikes in India. making a new car affordable to families with income level of Rs 2 lakh. plans to start selling a new motorcycle and a new scooter in India next year
.. the world's biggest maker of motorcycles and scooters. Suzuki. in India for higher-end bikes and few manufacturers are in the process of unveiling such expensive bikes. KTM. This brings down the cost of ownership of an entry level car in India by 30 per cent.
NEW COMPETITOR FOR HERO HONDA: Honda Motor Co." Industry research organization CRISIL.
RIVALRY AMONG EXISTING FIRMS IN INDUSTRY:
The main rivalry that HERO HONDA is facing is from Bajaj Auto Ltd (Bajaj Auto) .. Royal Enfield Ltd (REL) and Honda Motorcycle & Scooter India (P) Ltd (HMSI). The move could see Hero Honda Motors Ltd. which at one time was closing in on Hero Honda. said Shinji Aoyama. but low-margin. while Hero Honda would stick to the high-volume. at a time sales of motorcycles is slowing. Motorcycle sales have fallen in India this year as five-year-high interest rates deter buyers in a market where three-fifths of all motorcycles and scooters are bought on credit. Honda's plans to sell new models increases competition for its affiliate Hero Honda Motors Ltd. Honda plans to spend $76 million (2.2 million by 2010. bikes in the 100-125cc segment.as demand grows in the world's second-largest twowheeler market. TVS Motor Company Ltd (TVS) Yamaha Motors India Ltd (Yamaha). India's biggest motorcycle maker. Majestic Auto Ltd (Majestic Auto). India receive new technology from its Japanese parent to manufacture powerful bikes targeted at urban youth. has seen its grip on the bike market going
. president and chief executive officer of local unit Honda Motorcycle & Scooter India Pvt.4 billion Baht) in the next three years on four to five new models and increasing annual manufacturing capacity from 1 million vehicles to 1..
In the executive segment Hero Honda is the clear leader with 67% market share with splendor and passion leading the market in this segment and will continue to do so in the near future well now we come to the most controversial segment which is the premium segment since the current market leader according to the sales of the past few months is CBZ but then pulsar has arrived and the consumer choice clearly shows that this place will be reserved for pulsar for some time as a counter attack hero Honda too would be launching a bike in this segment but it is too early to comment on that.7% at the end of 200708 and further down to 26% at the end of the first quarter (April-June) of 2008-09. Its share slipped to 28. In the economy segment Bajaj is the leader with 46% of the market share with boxer being the largest selling bike in this segment. from 31.7% in 2006-07.down by close to 6% in just 15 months.
THREAT OF SUBSTITUTE GOODS/SERVICES:
The pulsar has taken the market by storm in the premium segment it has clearly displaced the CBZ and the other models of this segment and looks like the things will remain this way for some time but there are tough times ahead since Hero Honda plans to launch a new bike in this segment by the end of this year which means that there is a lot to look ahead from a
Its freedom for four. The 100-125 cc two-wheeler range.consumers
"Nano is expected to change the automobile market in India.
. Bike makers Hero Honda and Bajaj have realised this and have jumped into the bandwagon of ultra small cars. could be severely affected with the launch of Nano. wind and dust. caliber croma etc. a preference for used cars to new two-wheelers among vehicle buyers cannot be ruled out.
Bajaj auto ltd is the second biggest manufacturer of motorcycles. for bajaj pulsar has been the major contributor for the rise in its motorcycle sales along with its other popular models such as boxer.
With the second-hand car market developing. The companies recent indigenous launch in 4-stroke segment viz. which comprises 90% of the two-wheeler market in terms of sales. and it appears that pulsar would rule this segment till the time there are some new launches in this segment by other manufacturers. the 150 / 180 cc pulsar which has practically snatched the market share of the bikes like Hero Honda CBZ. Suzuki Fiero. Lml adreno etc. It would cater to a typical middle income Indian family of four who wants to avoid rain.
which offers absorbed natural gas (ANG) technology. is all set to see dawn of a new era in two-wheeler industry. It's not petrol or diesel or any other fuel. due to stiff competition In the market.
SUPPLIERS BARGENING POWER:
Two-wheeler manufacturer Hero Honda are into discussions with Energtek. has initiated discussions to supply the new technology and claims that ANG will reduce fuel cost by more than 50%. that was redefined with the invention of fuel-efficient four-stroke engine technology.
But usually it is Low.
. here as the supplier is lone player in the market so there will be some what monopoly in the market. This will definitely give all the
major players a run for their money. a provider of absorbed natural gas products. but it's electricity
that have initiated a revolution in two-wheeler industry in India. for technology that would enable two-wheelers to run on gas instead of petrol Energtek.
The face of auto industry.
Lml adreno .BARGAINING POWER OF CUSTOMERS:
Very high. due to availability of options.
Recent happening on two-wheeler sector
IMPACT OF HIGH OIL PRICE: New Delhi. They cited the escalation of prices of nakedness materials cod to higher prices.
For example in 4-stroke segment viz. the 150 / 180 cc pulsar compete with bikes like Hero Honda CBZ. Suzuki Fiero.
. two-wheelers hit upraised prices between assorted models of the arrange of R 800-2000.
the toll process was accumulated Rs 1500. “said HS Goindi. the nous of the company’s marketing and sales. A kindred process was locate in place. with the prices of fuel spiralling to scary
. TVS Motor Company has also upraised prices of models early this month. Today. it's economy. convenience and zero emission that are the prime drivers for the electric two-wheeler category in major parts of the world. We hit already accumulated prices to Rs 1800 on the assorted models.Hero Honda declared weekday a toll process of up to Rs 850 on its models. 150 and 180 cc. modify on 125 cc cycle XCD. evilness chair of Sales and Marketing. Mr. of Platina by R 500. Bajaj Auto accumulated prices on its 100 cc cycle Platina and another models much as XCD and Pulsar. In housing of Pulsar. Amit Nandi. This would be the ordinal ammo of toll increases during the assemblage after the prototypal was conducted during April-May
E-BIKES: ON THE RIGHT TRACK! Undoubtedly. said: We upraised prices on non-metallic var. with gist from the terminal hebdomad of July. Bajaj Auto.
consumers stands to gain undoubtedly. This makes it less than 10 paise per km in an electric two-wheeler compared to almost 1 rupee per km in a petrol two-wheeler. that too free. If you extrapolate this over a month. One litre of petrol cost approximately Rs 50. And in 24 months. Hero Electric's managing director Naveen Munjal feels that there are four basic compelling reasons for e-bikes to stay .. when he is opting for an electric twowheeler.350 per month in a situation where a person rides his bike for 50 km every day. the ever-increasing prices of
. are here not just to provide a solution. as a natural consequence.. E-Bikes.they're here for keeps! "In comparison to (ICE) Internal Combustion Enginebased two wheelers running on petrol.heights. the depleting stocks of non renewable crude oil. there's unwieldy pressure on corporate as well as business groups to ease the stress on the environment that's already buckling under the pressure.viz. it leads to a saving of almost Rs 1. the savings made enable the user to recover the cost of the vehicle! The consumer virtually is assured of a clean form of mobility." One litre of petrol gives you 50 km of transportation. leading to huge savings. With running cost as low as 10 per cent of conventional petrol driven two-wheelers. One unit of power gives you 70 km to 100 km of transportation. electric twowheelers run on electricity. And one unit of power in India cost approximately Rs 4 to Rs 5.
This trend will gain momentum with the launch of further higher power electric vehicles. brand and quality improvement thereby making available electric vehicles suitable for Indian Roads". West Bengal. Orissa. their comfort by way of lower sound emissions. and lack of maintenance costs. A similar move by other
. "The launch of high speed / high powered electric two wheelers have brought electric vehicles in the main stream scooter category. In fact. VAT reduction and subsidies to customers in order to promote electric / battery powered vehicles. Chandigarh to name a few. Chhattisgarh. a much-needed Government support has already started coming in from a few environmentally conscious states like Rajasthan. people have started switching over from petrol two wheelers to electric two wheelers. convenience of doing away with petrol pump visits. product development. Mukesh Bhandari puts it "The Electric 2 Wheelers category will grow exponentially over the next few years with large national level players investing substantial amount of money in manufacturing facility. and lastly. Electrotherm. Avinash Bhandari. Pondicherry. Karnataka.petrol. Director Operation of Electrotherm adds. in the form of RTO exemption / reduction. With the availability of such high powered vehicles. Madhya Pradesh. indigenization. As Chairman and CTO. Andhra Pradesh. technology. their utility as a viable non-polluting economical means of transport.
with annual revenues of about $12 million. The acquisition further underscores reports that the Mahindras are interested in the growing two-wheeler market." M&M ARM BUYS ITALIAN TWO-WHEELER DESIGN CO MUMBAI: Mahindra & Mahindra’s (M&M) component arm Systech has acquired a controlling stake in Italian design firm Engines Engineering (EE) for an undisclosed amount. The Bologna-based firm. develops motorcycle prototypes and two-wheeler designs. M&M through Systech has been looking at acquisition of reputed design houses. “Engines Engineering has been operative for the last three decades and a partnership with M&M will fuel growth. The company is reportedly keen on high-end Italian design companies MV Agusta and Cagiva.
ET had recently reported that the Anand Mahindraled company. We can combine our
. “I have great comfort level with M&M. has been talking to Indian and overseas players to shape its two-wheeler plans.” said Engines Engineering chairman Alberto Strazzari. that is a market leader in tractors and sports-utility vehicles. while also showing more than a passing interest in Kinetic Motors and China’s Lifan.Governments will go a long way in supporting this green vehicle. having worked together with them for the last two years.
Mani said. as the company was giving 'unnecessary concessions. would directly hit hundred of small time workers. the Castrol outlets.' to lure the customers. Coimbatore Zone two wheeler Workshop workers union. which would seriously affect the livelihood of hundreds of workers. The government should immediately intervene and stop mushrooming of such workshops. which was opening 'bike zone'. across the State. OVER 1000 TWO-WHEELER WORKSHOP CLOSED COIMBATORE: Over 1. According to K S Mani. This indicates our model of partnering and leveraging on each other strengths.” he added.
. has now entered the 'four-wheeler garages' also. Mr Luthra said.' by MultiNational Castrol. president.
Castrol. to "protest the opening" of 'Bike Zone. customer base and lower cost engineering excellence to fuel growth in Europe and India.500 two-wheeler workshops in and around the city downed their shutters. and protect small workshop owners. About 70% of the acquisition cost will be paid in cash and the selling shareholder Strazzari will continue to hold 30% and will combine his business with Mahindra Engineering Services.technological strengths. the union said.
is discontinuing such loans offered at the dealer’s end from August 15. which is already seeing a slowdown. Incidentally. ICICI Bank has a network of around 1. but the backlash against the use of recovery agents
.000-15. while the required income is Rs 5. ICICI Bank disburses around Rs 180 crore of two-wheeler loans every month.” he said. The two-wheeler business in India has been facing a major upheaval. some of the newer players are also said to be cutting back on disbursements. ICICI Bank executive director V Vaidyanathan confirmed this to ET.000 a month. “The bank has decided to reorient the two-wheeler business through branches rather than at dealerships. The move will impact the two-wheeler business. The average ticket size for these loans is quite small at around Rs 33. This model accounts for the bulk of the two-wheeler business for ICICI Bank. The bank has already transferred 200 employees in this unit to other departments.ICICI DISCONTINUES 2-WHEELER LOANS AT DEALER'S END MUMBAI: ICICI Bank. the country’s largest twowheeler financier. Currently. One out of four repayment cheques in two-wheeler loans bounces.000.400 branches. Interest rates for two-wheelers are currently at around 24%. with many financiers exiting the market due to rising defaults and collection issues.
These bikes will be available starting at Rs 15 lakh to Rs 50 lakh in the Indian market.
ITALIAN TWO-WHEELER DUCATI FORAYS INTO INDIA NEW DELHI: Italian two-wheeler maker Ducati Motor Holding on Wednesday announced its foray into the Indian automobile market with the launch of five motorcycles.has made repossession and recovery through agents difficult for lenders. Prices are set to increase by 2-3% for the mid-range
. "We will be launching four different models in multiple variants. bike prices are slated for a price mark-up for a second time this year. the hike this year in April was too small to counter the rapid rise in input costs. According to motorcycle majors. he added. priced in the range of Rs 15 lakh to Rs 50 lakh. The company would import sixty units this year from its Italian manufacturing unit." said Ashish Chordia. BIKE PRICES SET TO ZOOM BY 2-3% MUMBAI: Bike makers seem to be a caught in a catch-22 situation since the past few months. Despite a bleak demand. Chief Executive Officer of Precision Motor India Pvt Ltd. sole distributor of Ducati bikes in India.
which is up by Rs 1. “The manufacturers have been absorbing the hike in the prices of steel.” said an auto analyst from a Mumbai-based brokerage. and plastics. Fierce competition had prevented the companies from hiking the prices of motorcycles in 2007.000 per tonne. plastic and metal. After taking a price cut in March. which is yet to be decided.000 and the premium bikes are at Rs 45.
. The duty for two-wheelers and small cars has been brought down to 12 per cent in the Budget proposals. The major increase in input costs is coming from steel. HERO HONDA WANT MORE CUT IN EXCISE DUTY
NEW DELHI: The Nano effect was too apparent to ignore at Finance Minister P Chidambaram's postBudget conference on Monday with two-wheeler manufacturers. demanding a further cut in excise duty for a levelplaying field with small car makers. “To absorb the increase in input costs. the industry is trying to protect its margins to maintain profitability.800 per tonne. which is up by Rs 13. the entry-level 100cc bike is priced at around Rs 35. Now. including Bajaj Auto and Hero Honda.000 per unit. Discounts and incentives have also reduced.and premium bikes.000 in April 2008.
BAJAJ AUTO. we are looking at a price hike.” said Bajaj Auto GM (marketing) Amit Nandi. bike makers were forced to increase prices in the range of Rs 5001.
This company claims that ANG will reduce fuel cost by over 50% compared to petrol.wheeler manufacturers feel. two-wheeler manufacturers such as Bajaj. an Israel-based company and world leader in absorbed natural gas (ANG) technology. KINETIC PLAN GAS-BASED 2WHEELERS
MUMBAI: After buses." Hero Honda Managing Director Pawan Munjal said at the conference while making a case for lower excise duty on two-wheelers. "Two-wheelers are used by real aam aadmi (common man). has initiated discussions with Indian two-wheelers manufacturers to supply the new technology.
BAJAJ." Chairman of Bajaj Auto Rahul Bajaj said. The excise duty on two-wheelers and three-wheelers should be brought down to 8 per cent. twowheeler manufacturers are looking at models that would run on gas.
Energtek. cars and auto-rickshaws.a move. two. Hero Honda and Kinetic are considering launching models that can run on gas. HERO HONDA. Fearing that the Nano would eat into their marketshare. would lead to unfair competition.
110 crores (subject to closing due diligence) plus 20 percent stake to KMCL in the New Co. helping it establish a robust. (KMCL).Bajaj Auto has decided to develop a dual-fuel twowheeler which can run on gas and will also have the option of running on petrol. (New Co). Honda. TVS. (M&M). one of India's leading automotive companies. today announced that its Board of Directors has approved the acquisition of business assets of Pune-based Kinetic Motor Company Ltd. end-to-end two-wheeler
. Energytek has entered into a 50:50 joint venture with Nagpur-based LPG bottling company Confidence Petroleum to launch Confi Energtek Asia Ltd. company sources said. M&M will hold the balance 80 per cent of the equity. M&M ACQUIRE BUSINESS ASSETS OF KINETIC MOTOR Mumbai: Mahindra & Mahindra Ltd. LML and Kinetic are also believed to be considering this. a company that will market Energytek’s ANG technology in India and other Asian countries. The acquisition will be done through a New Company to be formed. The consideration for the acquisition is a sum of Rs. The deal will enable Mahindra to design and market a range of scooters. value engineered motorcycles and highend motorcycles for the Indian and global markets.
HERO ELECTRIC TO FORAY INTO OVERSEAS MKT CHANDIGARH: Bike maker Hero Electric has decided to foray into overseas market starting with exports of e-bikes to SAARC countries this year and also plans to set up a new Greenfield assembly unit. In contrast. TWO-WHEELERS BACK IN BLACK
NEW DELHI: It’s a reversal of fortunes in Motown. Country’s second-largest twowheeler maker Bajaj Auto posted a 5% rise in its motorcycle sales in August at 1.67 lakh in the same month last year. TVS Motors posted a 11. Hero Honda Motors. which were clocking double-digit growth in August last year.05 lakh in August compared to 2.
. saw its sales growing 27% to 3.business in every segment of the industry.75 lakh against 1. The slump in car sales mainly came from rising inflation and interest rates coupled with high fuel prices which continued to dissuade customers from any fresh purchases. the two-wheeler sector posted positive sales in August.
CAR SALES IN REVERSE GEAR. the world’s largest two-wheeler manufacturer. Car sales. have now turned negative while two-wheeler sales are back to showing strong positive growth this August compared to a negative drive last year.28% rise in sales.40 lakh last year.
000 units of bikes this year to SAARC countries to tap overseas markets.5 million units by 2010."
Recent happening on hero Honda
HERO HONDA OPENS MOTORCYCLE PLANT AT HARIDWAR Haridwar – The country's largest two-wheeler maker Hero Honda Motors India will invest Rs. The plant would have an initial installed capacity of half a million bikes annually and the company would increase it to one million units by 2008. which would have an overall production of 1."We have plans to export 4. Uttrakhand on Tuesday.900 crore would be made in the project." Hero Electric Managing Director Naveen Munjal said here. The company has so far invested Rs. A total investment of Rs 1. The company has invested Rs 450 crore so far in the plant. Stating that the company would have exclusive dealers in the neighbouring countries for its exports project. 150 crore to balance of its facility at Haridwar.
. "Initially export will account for 1516 per cent of total sales.000-5. he said. 450 crore in the plant. Hero Honda has started operations at its new plant in Haridwar.
it is looking for a jointventure partner in the new business.HERO HONDA PLANS RETAIL FINANCE BUSINESS
New Delhi: To maintain its leadership position in the decelerating two-wheeler industry. on the lines of its rival two-wheeler companies — Bajaj Auto’s Bajaj Auto Finance and TVS Sundaram Finance of TVS Motors.”
. This comes at a time when many financial institutions. When contacted. According to sources in the automobile industry. Hero Honda is looking at the non-banking finance company (NBFC) route to get into the retail finance market. Centurion Bank of Punjab and Citibank. Others like the market leader ICICI Bank and HDFC Bank have reduced their financial exposure in the sector. including GE Money. Hero Honda. We are looking at various possibilities to increase financing options for our products in the market. the Hero Honda spokesperson said: “There is nothing concrete at this stage. the largest two-wheeler company in the world.
The two-wheeler industry has been hit hard by the prevailing high interest rates as well as the credit squeeze in the market. have exited the two-wheeler finance market. plans to enter the retail finance market.
20. Through its own finance company Hero Honda wants to rectify the liquidity crunch in the retail finance market thereby generating sales for its products.37. April 2 Hero Honda has reported 15 per cent increase in sales for March.46 lakh twowheelers. Its sales grew 0.48 lakh units in the financial year 2008.915 units in March 2007.23% to 32. TVS MOTOR SEE FALL
Chennai. BAJAJ.142 units against
. The industry sales through retail finance has dropped to 60% from 75-80% a year back.594 units in March 2008 against 2. despite continuing sluggish trend primarily due to higher cost of finance.77. Hero Honda managed to buck the trend of decelerating sales and maintained flat sales in the same period. the company sold 33. The company sold 3. HERO HONDA MARCH SALES RISE. Industry sales have declined 8% to 72. In the full year 2007-08.Two-wheeler sales have been hugely impacted by the high interest rates and non-availability of finance from banks.
36.54% IN MAY
Country's largest two wheeler maker Hero Honda Motors Ltd (HHML) today reported a 9.109 units in the same month last year. "While Hunk has contributed largely to doubling our volume and share in the premium segment.756 in fiscal 2007. Till February the total sales witnessed a dip against previous year — it was March that helped the company post at least a marginal increase in annual sales. HERO HONDA HIKES 100CC BIKE PRICES BY UP TO RS 850 NEW DELHI: Country's largest two-wheeler maker Hero Honda today increased the prices of its 100cc bikes by up to Rs 850 on account of rising input costs.33. the refreshed Splendor NXG has been driving the volumes in the deluxe segment. for example
.12. we have raised the prices of our product range to partially offset this increase.85. The company attributed this rise to its latest launch of new Splendor NXG and the 150cc executive segment bike Hunk." Hero Honda Motors Senior Vice President (Marketing & Sales) Anil Dua said in a statement.54 per cent rise in its motorcycle sale in May at 3.
HERO HONDA SALES UP 9. "In view of consistently rising input costs.317 units compared to 2.
05.40.44. compared with 12. however. the industry continues to face uncertainty on account of high interest rates and overall credit squeeze." the company said in a statement.in 100cc range.97 per cent growth..919 units in the corresponding period last year.
HERO HONDA AUG SALES UP 27 PC
NEW DELHI: Country's largest two-wheeler maker Hero Honda today reported a 26. reflecting a 18. however. "Our strategy is yielding results.875 units in the corresponding month last year. against 2.516 units.81. maintained the price hike has been restricted only to its 100cc bikes as of now. the price increase is limited to Rs 850. The cumulative sales for the April-August period this year stood at 14.077 units. the company said in a statement. The company..84 per cent jump in its domestic sales in August at 3." Hero Honda Motors Senior Vice President (Marketing and Sales) HERO HONDA IN-HOUSE TEAM TO STUDY CAPACITY CUTS
. The company said it has strengthened its share in the domestic motorcycle market by over 55 per cent.
However. even as the company announced investments of an additional Rs 150 crore in the current fiscal to scale up capacity at its facility here. which was inaugurated on Tuesday. Managing Director and CEO. The move would help the company counter the enormous pressure being created by increasing input prices. This.
“We have undertaken project Samadhan within the company that will come out with a solution for utilisation of full capacity. he declined to comment on whether that would mean having to cut production at its other two facilities in Dharuhera and Manesar.” said Mr Pawan Munjal. A sum of Rs 450 crore had been invested earlier in the plant. NEW DELHI: Fullerton India Credit Co Ltd. Right now we want to maximise production at the Haridwar plant to gain from the excise duty benefits. Mr Munjal was talking in context of the company’s ability to utilise the capacity of its three plants at a time when the two-wheeler industry has been seeing a declining trend. Hero Honda.Haridwar: Top two-wheeler maker Hero Honda Motor Ltd said that it has set up an in-house team that would look into whether the company needs to cut capacity at any of its existing plants vis-a-vis its future requirements. one of the fastest-growing NBFCs. on Tuesday signed an MoU with Hero Honda Motors Ltd to
." said Ravi Sud. making it easy for our customers to buy our products. "Our tie-up with Fullerton India is timely as we are expanding our reach to newer markets in smaller towns. chief financial officer. managing director & CEO. It is primarily engaged in providing loans to the salaried and self-employed." said G S Sundararajan. Fullerton India Credit Company Ltd.
"Our understanding of the small credit market in India and our international experience in the mass market segment will be beneficial in servicing the wide spread network of Hero Honda Motors. Hero Honda Motors Ltd. This will further strengthen our dealerships and help us garner a greater market share. Hero Honda India’s leading brand of two-wheelers targets customers in the same mass market as we do in urban. We see a lot of synergies in this tie-up. We hope their direct presence in each of our dealer locations will greatly enhance customer service. It already enjoys a good equity with the customer base and has an enviable network of 800 branches across 380 centres. besides consolidating our positions in the traditional markets. semiurban and rural areas. Fullerton India is a unique financial partner with its focus only on the mass market segments in urban and semi-urban areas.offer consumer finance for wheelers at Honda dealerships.
" Hero Honda Motors Chairman Brijmohan Lall Munjal told reporters on the sidelines of an auto industry event here today. Asked if the rising cost of raw materials will put pressure on the profit-margin of the company." HERO HONDA VIE FOR STAKE IN UCO BANK ARM MUMBAI: Hero Honda are in talks with UCO Bank for acquiring a 25% stake in the proposed financial services subsidiary of the bank.
. said a person familiar with the development. Through this MoU. Fullerton India will set up its counter in each Hero Honda dealership to offer finance to Hero Honda customers. HERO HONDA NOT TO RAISE BIKE PRICES IN '08 NEW DELHI: Hero Honda Motors has decided not to increase the prices of two-wheelers till the end of this year. "We will not increase the prices of our vehicles till the end of this year. it has short-listed four foreign firms for the remaining 26%. While the stateowned UCO Bank will hold 49% in the entity. This will be like an extension counter of the local branch of Fullerton India. We will have to tighten our belts. he said.The tie-up will enable Fullerton India to offer Hero Honda customers access to its financial services at Hero Honda’s extensive dealer network. This is likely to be a top UK-based investment firm. "I don't think so.
PTI NEW DELHI: Country's largest two-wheeler maker Hero Honda Motor has been hit by workers' strike forcing the closure of its manufacturing unit at Dharuhera in Haryana. including Splendor and Passion.
. the sources said.HERO HONDA'S DHARUHERA PLANT CLOSED AS WORKERS STIRKE WORK
3 MAY. 2008. adding the workers had also opposed to being shifted from one production line to another. The contract and casual workers feared losing their jobs after the planned shift in production to Uttarakhand. The sources said workers have been opposing the company's move to shift a bulk of production to its newly opened third plant at Haridwar. The strike broke out after the management discontinued services of about 50 contract workers. Sources said work at the Dharuhera factory stopped since Saturday morning and all the workers are staging protest inside the plant. where Hero Honda plans to produce its high volume models. The number of contract workers removed by the company could not be ascertained as Hero Honda officials were not available for comments. 1658 HRS IST. They have been joined by the regular workers in the strike.
"It has been explained to them that this exercise would not adversely impact their work and wages. They have agreed to resume work so that the flexibility of operations within the plant is ensured.Hero Honda manufactures Splendor Plus and CD Deluxe models from the plant. 1800 hrs IST. the unit was hit by workers' strike forcing closure of the plant. "Normalcy has been restored at our Dharuhera plant following a mutually amicable resolution of certain concerns raised by some contract labourers due to instigation by external elements." the company said in a statement. The plant has a production capacity of about 5. which has a total of about 6. 2008.000 units per day. On May 3. PTI
NEW DELHI: Country's largest two-wheeler maker Hero Honda on Monday said it has resumed work in its Dharuhera unit in Haryana following an agreement with the striking workers. As
HERO HONDA'S DHARUHERA PLANT RESUMES WORK 5 May. it added.500 workers.
where Hero Honda plans to produce its high volume models. The workers had also opposed to the company's move to shift a bulk of production to its newly opened third plant at Haridwar. MD of Hero Honda. The contract and casual workers feared losing their job after the planned shift in production to Uttarakhand. told TOI that rural market would be a special focus area for the company as it is looking at new growth areas to
.always. They were joined by the regular workers in the strike. Hero Honda gives utmost priority to the welfare of its workers and will continue to carry on a dialogue with them towards that objective. Hero Honda said as a part of routine practice the company had moved some contract labourers from one area to another within the Dharuhera plant keeping in view the flexibility of operations. Earlier after the strike broke out in the plant last week. Pawan Munjal. HERO HONDA TO FOCUS ON RURAL INDIA NEW DELHI: Hero Honda has worked out a major expansion strategy for the rural markets and is planning to strengthen retail financing to support the initiative. including Splendor and Passion. that could lead to setting up of its own finance arm." the company statement said.
Village haats and mandis are also being targeted to reach customers. Dhanteras and Diwali in the north. “We already have a strong presence in the rural markets. Gudi Padwa in Maharashtra. senior V-P said. Hero Honda is mapping the demographic landscape to formulate region-specific modules to tap customers at a very local level. The company is also reaching out to ‘opinion leaders’ . We have had several initiatives and now we have created a dedicated ‘rural vertical’ . “For example .
. As part of its strategy. with which we are consolidating all these initiatives and looking ahead.” Munjal said. Two-wheeler penetration in rural belts is still very low with data shows that less than 10% of households own a two-wheeler .” he said.” Munjal said. The objective is to reach out to as many potential customers as possible .” Anil Dua. distinct strategies are being evolved to leverage regional festivals such as Pongal and Onam in the south. “So there is a large market to be tapped.maintain sales momentum in a shrinking market “We have created a special ‘rural vertical ’ to push growth and this would spearhead our expansion in the rural market. Durga Puja in the eastern region .
” he said.
KEY FACTORS INFLUENCING DEMAND OF TWOWHEELER The demand for two-wheelers has been influenced by a number of factors over the past five years. Hero Honda already has a company ‘Hero Honda Finlease’. ▪ Increased availability of cheap consumer financing in the past 3-4 years.
. and dealer-appointed outlets across the country. ▪ Increasing availability of fuel-efficient and lowmaintenance models. no final decision has been taken. we can do it. that include authorised dealerships. This is currently not in consumer finance and we might even look at this if the need be.000 ‘touch points’.000-3. especially in the semi-urban and rural areas. service and spare parts outlets. though Munjal said. The key demand drivers for the growth of the two-wheeler industry are as follows:
▪ inadequate public transportation system.Munjal added that the company is tying up with new partners. including local cooperative banks and financing units to have a robust financial model. Setting up of an independent retail financing arm is an option.500 this year. It is something we have to look at closely. “If necessary. The company is also expanding its distribution network to support the rural initiative. It has grown its network by over 50% over the last two years from 2. This would be further expanded to 3.
which makes two-wheelers the entry level vehicle. This will have a multiplier effect on demand for consumer durables including two wheelers. This is already witnessed in improved demand two wheelers. which creates a need for personal transportation. Petrol prices are the highest in India as GOI subsidizes kerosene and diesel. and ▪ Increasing number of models with different features to satisfy diverse consumer needs. ▪ Steady increase in per capita income over the past five years.▪ Increasing urbanization. This will have a negative impact on demand for two wheelers in the long run. But taking into account the delays involved in the implementation of such large infrastructure
KEY FACTORS MOTORCYCLES:
Government policy impact on petrol prices : petrol prices
determine the running cost of two wheelers expressed in rupees per kilometer. ▪ Changes in the demographic profile. ▪ Difference between two-wheeler and passenger car prices.
Implementation of mass transport system: many states
have planned to implement mass transport systems in state capitals in the future.
Improvement in disposable income: With the increase in
salary levels due to entry of multinationals following liberalization process the disposable income has improved exponentially over the years.
we expect the demand to be affected only five to seven years down the line. in India.
Availability of credit for vehicle purchase: The availability
and cost of finance affects the demand for two wheelers as the trend for increased credit purchases for consumer durables have increased over the past few years. 9 motorcycle manufacturers. India is the second largest producer and manufacturer of two-wheelers in the world. low maintenance. 3 moped manufacturers.
. Indians prefer the two wheelers because of their small manageable size.projects. the Automobile Industry of India has come a long way. we would see swanky four wheels jostling with our ever reliable and sturdy steed: the two wheeler. Thus. Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898. In India there are 7 scooter manufacturers. Motorized two wheelers are seen as a symbol of status by the populace. Indian two-wheeler industry has got spectacular growth in the last few years. pricing and easy loan repayments. Indian streets are full of people of all age groups riding a two wheeler.
The feeling of freedom and being one with the Nature comes only from riding a two wheeler.
WWW. It holds the record for most popular bike in the world by sales for Its Splendor model. HEROHONDA has been the world's biggest manufacturer of 2-wheeled motorized vehicles since 2001.COM/SEARCH.INDIATIMES. Today Hero Honda has an assembly line of nine different models of motorcycles available. when it produced 1.FADAWEB.COM WWW.CMS WWW.H TM
.WEKIPEDIA.COM/INDIANTYRESINDUSTRY.COM HTTP://ECONOMICTIMES.HEROHONDA. Hero Honda.THEHINDUBUSINESSLINE.Bajaj Auto.TIMESOFINDIA. Hero Honda's Splendor is the world's largest selling motorcycle.INDIAINFOLINE.3 million motorbikes in a single year.COM WWW. etc are the leading manufacturers. TVS.HEROCYCLES.COM WWW.COM HTTP://WWW.COM HTTP://WWW.