Indian

Two-wheelers Industry
June 2009
 INDEX
Ch. Ch.
Topic Topic
No. No.

EXECUTIVE SUMMARY

I. INDUSTRY SECTION

1 INTRODUCTION 3 TWO-WHEELER MARKET

1.1 Classification 3.1 Trend of domestic sales of two -
wheelers (TW) in last decade
1.2 Industry Players
3.2 Segment-wise market share
1.3 Evolution of the industry

2 INDUSTRY OVERVIEW 4 DOMESTIC MARKET

2.1 Characteristics 4.1 Segmental Growth Trend
2.1.1 Consolidated Industry 4.2 Motorcycles Sales Growth Trend
2.1.2 Short product life cycle 4.3 Scooter / Scooterettes (SS) Sales
2.1.3 Strong backward linkage Growth Trend
2.1.4 Strong forward linkages 4.4 Moped Sales Growth Trend
2.1.5 Technology Intensive 4.5 Electric Two wheelers Sales
2.1.6 Rain dependent demand Growth Trend
from rural India 4.6 Market share of players in domestic
sales
2.1.7 Finance dependent
4.7 Players & Products
2.1.8 Duty Structure
2.2 Demand Drivers
2.2.1 Growing consumer class 5 EXPORT MARKET
2.2.2 Demographic transition 5.1 Trend of TW Exports
2.2.3 Rising proportion of 5.2 Player-wise details for FY09
female income earners 5.3 Segment –wise TW Exports
2.2.4 Increasing rural focus (FY09)

2.2.5 TW financing
6 COST ANALYSIS
2.2.6 Wide product portfolio
2.2.7 New Model Launches 6.1 RM expenses
2.2.8 Strong Brand Influence 6.2 Employee expense
2.2.9 Competition 6.3 Selling expense
2.2.10 Product Features 6.4 Operating Margins
Ch. Ch.
Topic Topic
No. No.

II. OUTLOOK SECTION III. COMPANY SECTION

7 8 COMPANY PROFILE
INDUSTRY OUTLOOK
8.1 Hero Honda Motors Ltd. (HHML)
7.1 Domestic Market
8.2 Bajaj Auto Ltd. (BAL)
7.2 Exports
8.3 TVS Motor Co. Ltd. (TVS)
7.3 Outlook on profitability
8.4 Latest news

IV. ANNEXURE

1. Company wise Motor cycles / step throughs

2. Company wise Scooters/Scooterettes/ Mopeds

3. Segment-Wise Domestic sales – based on engine capacities

4. Segment-Wise Exports– based on engine capacities

5. Company wise Scooter/Scooterettes Domestic Sales

6. Company-Wise Scooter/Scooterettes Exports

7. Company wise Motor cycles/Step Throughs Domestic Sales

8. Company-Wise Motor cycles/Step Throughs Exports

9. Company wise Mopeds/ Electric Two Wheelers Domestic Sales

10. Company-Wise Mopeds and electric TW Exports

 LIST OF FIGURES
A. TW Sales Trend (FY04-09) 4.13 Market share of players in domestic
motorcycle sales (FY04)
B. Domestic TW Sales Forecast (FY09-
14) 4.14 Market share of players in domestic
motorcycle sales (FY09)
C. Target population, PCI and TW
penetration in different regions in India 4.15 Market share of players in domestic
scooter sales (FY04)
D. TW penetration in some countries
across time periods 4.16 Market share of players in domestic
scooter sales (FY09)
1.1 Segment-wise Domestic Sales of TW
4.17 Market share of players in domestic
1.2 Domestic market share of TW players
moped sales (FY04)
2.1 Domestic market share of TW players
4.18 Market share of players in domestic
2.2 Proportion of female working moped sales (FY09)
population in India
5.1 Y-o-Y growth of TW export
2.3 Share of female working in organised
5.2 Exports as a % of Total TW sales
industrial activities
5.3 Market Share of Players in TW Exports
3.1 TW unit sales trend
5.4 Y-o-Y growth of Motorcycles Exports
3.2 Segment-wise domestic market share
(FY09) 5.5 Y-o-Y growth of Scooters Exports
3.3 Segment-wise domestic market share 5.6 Y-o-Y growth of Mopeds Exports
(FY96) 6.1 Domestic Steel Prices
3.4 Category-wise Domestic Market 6.2 Steel Prices in China
position
6.3 Aluminium Price Trend
4.1 Y-o-Y growth of TW unit sales
6.4 Natural Rubber Price Trend
4.2 Percentage composition of TW unit
sales (FY08) 7.1 Penetration of TW
4.3 Percentage composition of TW unit 7.2 TW Penetration and income levels by
sales regions
4.4 TW unit sales distribution in FY09 7.3 TW Penetration and income levels in
top 20 cities
4.5 TW unit sales distribution in FY04
8.1 Share Price Trend of Hero Honda
4.6 Y-o-Y growth of Motorcycles
8.2 Segment-wise sales distribution of Hero
4.7 Composition of motorcycle unit sales Honda
4.8 Y-o-Y growth of Scooters 8.3 Share Price Trend of Bajaj Auto
4.9 Composition of scooter unit sales 8.4 Segment-wise sales distribution of Bajaj
4.10 Y-o-Y growth of Mopeds Auto
4.11 Market share of players in domestic 8.5 Share Price Trend of TVS Motor
TW sales (FY04) 8.6 Segment-wise sales distribution of TVS
4.12 Market share of players in domestic
TW sales (FY09)
 LIST OF TABLES

A. Segment-wise Domestic TW Sales 5.1 Major export destinations (FY08)

Forecast 5.2 Trend of TW exports (FY04-09)
B. Outlook on TW exports 5.3 Domestic-Export Sales Distribution
1.1 Production and sales trend for the last 5 (FY09)Top players in different
years segments in FY09 (based on exports
sales)
2.1 Indigenous raw material & components
(RMC) as a % of total RMC cost 6.1 RM expense as a % of total sales
2.2 Duty structure 6.2 Employee expense as a % of total sales
2.3 Income Distribution of the Households 6.3 Selling expense as a % of total sales
2.4 Selling expense as a % of total sales 6.4 PBDILT margins (%)
4.1 Growth in domestic sales for FY09 for 6.5 Un-audited results for the period April
each vehicle segment – December 2008 (9 months)
4.2 Segment-wise growth in domestic 7.1 Domestic TW sales forecast
motorcycle sales in FY09 7.2 TW exports forecast
4.3 Segment-wise growth in domestic 8.1 Profile of HHML
scooter sales in FY09
8.2 Two-wheeler Product Range
4.4 Y-o-y growth% of TW sub-segments
(FY09) 8.3 Profile of BAL
4.5 Top players in different segments in FY 8.4 Two-wheeler Product Range
09 (based on domestic sales) 8.5 Profile of TVS
4.6 Launches in FY09 8.6 Two-wheeler Product Range

LIST OF BOXES
A. Demand Forecasting Model for D. Corporate action of Bajaj Auto
Domestic TW Sales E. Strengths and Weaknesses of Bajaj Auto
B. Corporate action of Hero Honda F. Corporate action of TVS Motors
C. Strengths and Weaknesses of Hero G. Strengths and Weaknesses of TVS Motors
Honda
Given the currently subdued macro-economic scenario and weak consumer confidence levels as
well as cautious stance of the two-wheeler financers, CARE Research expects domestic sales
growth to remain muted in the medium term. However, lower penetration and rising income
levels makes the longer term outlook healthy. Abundance of low cost labour and raw material
gives India an upper hand in the export market. The report on ‘Indian Two-wheeler industry’
forecasts domestic sales as well as exports of two-wheelers for the next five years till FY14.

The report is divided into four sections. Section I gives the overview of the Indian two-wheeler
industry. Section II provides a detailed outlook on the industry. Section III provides an overview
of the top 3 players in the industry, while Section IV contains various data tables as an Annexure
to the report.

I. Industry Section

¾ This section begins with providing an introduction to the industry including the industry
evolution and the types of vehicles sold.
¾ The characteristics of the industry and the demand drivers are discussed at length. It also
covers the duty structure of the industry.
¾ Detailed analysis of historical trends for each vehicle segment (namely, motorcycles,
scooters, mopeds and electric two-wheelers) and sub-segment (based on engine capacity) is
also presented in this section for both domestic as well as export market.
¾ This section also discusses about the players and competition in the industry, their
respective products/brands and how each of the players fared in the industry.
¾ Cost analysis of the industry is also provided by discussing the key cost items and trends
thereof, the trends in the prices of key raw materials and the trends in the operating
margins of the industry for the last three years.

II. Outlook Section

¾ This section exclusively provides the outlook on the industry.

¾ The forecasts of domestic two-wheeler sales for each vehicle segment for each of the next
five years till FY 2013-14 are provided in this section. This helps in identifying the
opportunity for a particular vehicle segment. The methodology to forecast domestic sales is
also discussed in depth in this section as a box item.
¾ The forecasts of two-wheeler exports for each vehicle segment for each of the next five
years till FY 2013-14 are also the part of this section. Segmental forecasts help segregate
winners from losers.
¾ Opportunity in the domestic market is also provided on the basis of broader regional
classification. Besides, the two-wheeler penetration for select cities is also provided along
with the per capita income of the city. This data and analysis could help the vested parties
to act accordingly.
¾ Medium term outlook on profitability is also provided in this section.

III. Company Section

¾ This section provides the in-depth profiles of the top three companies, namely Hero
Honda, Bajaj Auto and TVS Motors.
¾ General information like the year of incorporation, promoter group, installed capacities and
production, subsidiaries and joint-ventures is provided in addition to financial information
and stock prices for each company.
¾ The company section also provides the product profile and product range for each
company. Besides, it summarises the recent corporate actions, strengths and weakness of
each company.

IV. Annexure

¾ This section contains various tables that provide systematically designed information
relating to the industry.
¾ It begins with providing a gist that gives company-wise important models of motorcycles,
geared scooters, gearless scooterettes and mopeds offered in the market.
¾ This section also provides various tables presenting segment-wise as well as company-wise
data on domestic sales as well as exports for the past 5 years.

For an in-depth understanding and analysis of the Indian two-wheeler industry and CARE
Research’s outlook on the sector with its segment-wise forecast of domestic sales as well as
exports for each year till FY 2013-14 and other key trends in the industry foreseen, please refer to
the Report on The Indian Two-wheeler Industry, June - 2009 by CARE Research.

The subscription to this report includes monthly updates on the industry for the period July 2009
to June 2010.

Kindly click on the link below to subscribe a copy of the same

http://www.careratings.com/content/ResourceCenter/IndustryReport.aspx
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careresearch@careratings.com

Ms. Revati Kasture revati.kasture@careratings.com

Head – Industry Research
(D): +91-22-6754 3465

Mr. Dhimant Kothari dhimant.kothari@careratings.com

Manager
(D): +91-22-6754 3479

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Management Trainee
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This report is prepared by CARE Research, a division of Credit Analysis & REsearch Limited [CARE]. CARE Research has
taken utmost care to ensure accuracy and objectivity while developing this report based on information available in public
domain. However, neither the accuracy nor completeness of information contained in this report is guaranteed. CARE
Research operates independently of ratings division and this report does not contain any confidential information obtained by
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cannot be compared to the rating assigned to the company within this industry by the ratings division. The opinion expressed
is also not a recommendation to buy, sell or hold an instrument.

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