Term paper

On
Two wheeler market in India
I have to choose age target market. Suppose
youth prefer bike and family prefer scooter
and children goes with .
Introduction: Two wheeler industries 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. Aggressive marketing by the auto
finance companies have also played a significant role in boosting automobile demand,
especially from the population in the middle income group.

Two wheeler industry in India:

➢ India is the largest manufacturer of two wheelers in the world. It stands next only
to Japan and China in terms of the number of two wheelers manufactured and sold
respectively.

➢ The two wheeler industry in India has been in existence since 1955.
➢ The two wheelers market was opened to foreign competition in the mid-80’s and
the then market leaders – Escort & Enfield were caught unaware by the onslaughts
of the 100 cc bikes of the four indo –Japanese joint ventures . With the availability
of fuel efficient low power bikes, demand swelled, resulting in Hero Honda – then
the only producer of four stroke bikes (100 cc category), gaining a top slot.

➢ In the last few years, the Indian two-wheeler industry has seen spectacular growth.
The country stands next to China and Japan in terms of production and sales
respectively.
 ➢ The Indian two wheeler market has a size of RS. 100000 million.
➢ The segment can be broadly categorized into scooters motorcycle and mopeds.
➢ The motorcycle market share is about 81.5% of the total two wheeler market in
India.
➢ The automobile product of India started manufacture scooter in India.
➢ Majority of Indians, especially the youngsters prefer motorbikes rather than cars.
➢ In India Bikes are considered to be the favorite among the youth generation, as
they help in easy commutation.
➢ Indians prefer the two wheeler because of their low size easy maintenance pricing
and easy loan payment.

Evolution of Two-wheeler Industry in India: 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. The two-wheeler industry has been in existence
in the country since 1955. It consists of three segments viz. scooters,
motorcycles and mopeds. In India there are some MNC’s and Indian
company dealing in automobile sector. The main key players who are
dealing in this sector are Hero Honda, Bajaj, Yamaha, Honda, and TVS.
Hero Honda is the biggest player in this sector in India as well as in the
world and playing a very important role in two wheeler automobile
sector. Hero Honda, Bajaj and TVS are the Indian companies and
Yamaha & Honda are international automobile brand. Bajaj is the first
Indian two wheeler automobile company in the market since 1945 with
the name M/s Bacharj trading corporation private limited. In 1959 M/s
Bacharj trading corporation private limited change its name as Bajaj
Auto Ltd. Bajaj Auto obtains license from the Government of India to
manufacture two- and three-wheelers vehicles in 1959. Hero Honda
Motors Limited was established in 1984, as a joint venture between
India's Hero Group (world's largest bicycle manufacturers) and Japan.
Company. And created the world's single largest two
wheeler company and also one of the most successful
joint ventures worldwide. During the 80s, Hero Honda
became the first company in India. Over 19 million Hero
Honda two wheelers running on Indian roads today.
TVS Motors is the third largest company in the two-
wheeler industry with a market share of 16%. Infect, it is
the only Indian company without a foreign collaboration
in the two-wheeler industry. When the company
opted out of the collaboration with Suzuki in 2002,
many believed that TVS was headed towards
extinction. But the company proved the
doomsayers wrong and came out with a very
successful `TVS Victor'. TVS Motors Ltd. originally
incorporated in 1982 to manufacture two-wheelers in
collaboration with Suzuki Motors of Japan, TVS was one of
the leaders in two-wheeler industry.Yamaha Motor
Corporation is the auto mobile company of Japan (1953)
which works in India since 1955 and providing latest
technology in India front two decades. Yamaha Motor
India was incorporated in august 2001 as a 100%
subsidiary of Yamaha motor corporation, JapanHonda
motors of Japan is not a new name in the two wheeler
scenario in the country, they were in a tie up with the
Firodias owned Kinetic group. However in the late 90s
they parted ways after problems arose over issues
like introduction of new models, advertising
expenditure, marketing strategies and other related
issues. In the mid 80 Honda motors of Japan joined hands
with the largest bicycle maker of India the Hero cycles to
create Hero Honda which in a couple of decades or so
have gone on to become the single largest motorcycle
company in the world. Though Honda has come on its
own on the Indian market yet it will be providing
technological support to Hero Honda for the next ten
years. Thus presenting a unique situation in which the
company will be in direct competition with the company
which it has been associated for nearly two decades.
Honda Motorcycles and Scooters India limited, a
100% subsidiary of Honda motor company Japan
eventually entered the Indian market with Honda Unicorn
in 2004
Major players in two wheeler industry:

Benefits of two wheelers

Two-wheelers are the most popular and highly sought out medium of
transport in India. The trend of owning two-wheelers is due to its-
• Economical price
• Safety
• Fuel-efficient
• Comfort level

However, few Indian bike enthusiasts prefer high performance imported

bikes. Some of the most popular high-speed bikes are Suzuki Hayabusa,
Kawasaki Ninja, Suzuki Zeus, Hero Honda Karizma, Bajaj Pulsar and
Honda Unicorn. These super bikes are specially designed for those who
have a zeal for speedy drive.
Browse through the pages and catch all the details of high-performance
two wheelers in India. Know more about latest launches and happenings
in two wheelers industry.

Objective of study-

➢ To study two wheeler market

➢ The main objective is to find out the current trend
going on in the industry (about the product, piece,
place and promotion)
➢ To know the image of product in the mind of
consumer.
➢ To compare the level of satisfaction before
purchasing and after purchasing the two wheeler.
➢ To find out where people want to see the promotion
schemes
➢ To find out brand image on people for purchasing the
two wheeler.
➢ To know the most popular medium for two wheeler.
➢ To check the loyalty of the consumer towards the
different brand.
➢ To know the most motivating factor for purchasing
the two wheeler.
➢ To know the preferable price from the customer.
Literature review:
1. Harley Introduces Motorcycles From India Plan

MUMBAI -- Harley-Davidson Inc. Tuesday introduced the first two motorcycles from its India
factory, as the U.S. maker of iconic bikes tries to expand in one of the world's fastest
growing two-wheeler markets.
The first model, SuperLow, will be priced at 550,000 rupees ($12,168) while the second,
called Iron 883, will be available for 650,000 rupees, the company said. Both models will be
assembled at its factory in the northern state of Haryana and will be open for bookings from
Jan. 1, it added.
The India factory will assemble motorcycles from kits comprising parts produced by the
company's factories in Wisconsin, Pennsylvania and Missouri, as well as its component
suppliers. Harley currently imports fully-built units, which cost more due to higher taxes than
importing knocked-down kits.
Producing motorcycles in India will cut prices of the premium models, helping the company
to boost sales in this price-sensitive market. Harley has been pushing up its sales outside
its home turf. Sales outside North America accounted for 27% of the total in the July-
September quarter, up from 24% a year earlier.
The company started its India operations in August 2009 and sells 12 motorcycle models
including the Fat Boy, Roadster and Road King models.
2. Honda silent on Hero Honda's future;
Author: Nikhil Gulati
NEW DELHI -- Auto parts suppliers to Bajaj Auto Ltd. have been informed by India's
second-biggest two-wheeler maker by sales that the company is developing a new 100-
cubic centimeter motorcycle that could cost less than 40,000 rupees ($905.)
The new motorcycle is being developed as part of Bajaj Auto's plan to expand its offerings
in the entry-level segment, executives at two auto parts suppliers, who declined to be
named, told Dow Jones Newswires recently.
Bajaj Auto currently sells 10 motorcycle models, including two with 100cc engines--the
Discover 100 and Platina. It also sells a 150cc motorcycle under the Discover brand and a
Platina 125cc motorcycle.
Offering more products in the entry-level motorcycle segment will help Bajaj Auto intensify
competition with bigger rival Hero Honda Motors Ltd. The New Delhi-based affiliate of
Honda Motor Co. controls more than half of India's motorcycle market with 15 two-wheeler
models, including six 100cc models such as the Splendor+, Passion Plus and CD Dawn.
Others, such as TVS Motor Co. and Honda Motorcycle Scooter India Pvt. Ltd., also sell
100cc motorcycles in the country.
Entry-level motorcycles with 100cc-125cc engine capacities comprise more than half of the
more than nine million motorcycles and scooters sold in India each year, according to
industry data.
Bajaj Auto Managing Director Rajiv Bajaj confirmed that the company is working on a new
entry-level motorcycle, but declined to disclose its price or engine capacity.
He said the company may introduce the new motorcycle next year. "We have only begun an
evaluation, hopefully (the vehicle can be launched in) 2011," he said.
Bajaj Auto previously decided to withdraw from the entry-level motorcycle segment but re-
entered the segment in July last year with the Discover brand. The company has sold more
than one million units of the Discover brand to date.
Bajaj Auto's motorcycle sales rose 68% during April-August 2010 to 1.4 million units. In
comparison, total motorcycle sales in India grew 24% in the same period to 3.54 million
units.
Bajaj Auto is in discussions with Renault SA and Nissan Motor Co. to use a low-cost minicar
platform to develop more vehicles, Rajiv Bajaj said.
"This (more vehicles on the platforms) is possible, although (it's) yet under discussion," he
said, adding that Bajaj Auto can consider introducing both low-cost as well as premium
vehicles on the minicar platform.
The new products could be marketed independently by Bajaj Auto, Bajaj said, adding that a
light truck is already being planned for development on the minicar platform.
The Renault-Nissan Alliance and Bajaj Auto signed an initial agreement in July to produce a
low-cost minicar that will likely compete with Tata Motors Ltd.'s Nano minicar, currently the
world's cheapest car. Bajaj Auto, Renault and Nissan's low-cost car is expected to be
introduced in 2012.
Under the July agreement, Bajaj Auto will be responsible for the design, development and
manufacturing of the new car, while Renault and Nissan will be responsible for branding,
marketing, sales and distribution.
 3. Victory Motorcycle Soon On Indian Roads

The Indian motorcycle market is getting more racers in the growing stint
and the entry of global makers is not a new phenomenon. The latest is the
entry of Victory Motorcycles to the Indian roads in 2012 which may get its
own manufacturing plant in the years to come.

The Delhi Auto Expo 2012 will witness the models from Victory Motorcycles
and there will be CBUs initially in 2012. Victory Motorcycle has yet not
disclosed it's plan for India, on the models to be derived from its native
plant and the models to be made ingeniously. If it materialized, then for
India Victory Motorcycle will join the US company Harley-Davidson which
has already started its own facility here. The move to establish Victory
Motorcycle for India the local assembling facility is to reduce the price by
30%. It is expected that Victory Motorcycles in India will erect its facility
after ascertaining the feedback to its vehicles on experimental basis.

Victory Motorcycles is a unit of Polaris Industries operating in the overseas

lands of Spain, France, Germany, the US, the UK, Zealand and
Scandinavia. The market in charge for Victory Motorcycles said the Polaris
began its entry into India with a subsidiary unit and any installation of
products will be made on the research study on phases. He narrated the
company’s firm policy to please the customers of each country where the
vehicles are launched.

4. India's Bajaj raises prices of nearly all models by up

to 2 pct
NEW DELHI, Oct 13 Asia in Focus - India's second largest two-
wheeler maker, BAJAJ AUTO (BSE: 532977), on Tuesday said it
has hiked the prices of almost all of its models by up to 2 per cent
with effect from October 1. "We have raised prices by up to 2 per
cent for almost all two-wheeler models from October 1," Bajaj
Auto Managing Director Rajiv Bajaj told reporters here.
* Bajaj Auto's move to hike the prices of its scooters and bikes
comes in the wake of similar steps by other companies, such as
MARUTI SUZUKI (BSE:532500) and TATA MOTORS BSE: 500570),
to offset rising input costs.
* While Maruti had increased the prices of all its models, except
the Alto, by up to Rs 7,500 (US$168.54)in August, Tata Motors
hiked the price of its passenger and commercial vehicle by up to
Rs 40,000 at the beginning of this month.

5. India Autos Report - Q4 2010

India's new vehicle market is facing a number of threats in FY11
(ending March 20110, not least rising raw material costs, which have
prompted carmakers to hike their prices. Although carmakers will be forced
to pass on higher raw material costs to consum ers to protect margins,
there are a number of reasons why BMI believes vehicle sales could
weather the storm. With China accounting for a large proportion of the
world's steel demand, a slowdown in the Chinese economy in H210 would
likely impact this demand, lowering prices. While this may not necessarily
lead to an immediate reduction in vehicle prices, it would at least create a
period of price stability. In addition, this is the latest in a string of price hikes
and consumers have so far been unfazed. Sales of passenger cars for the
first three months of FY11 (April to June) were up 33% to 433,641 units,
boosted by demand for a raft of new small cars. India's two-wheeler market
has in no way suffered from the influx of new small cars, however, and is
forecast by BMI to surpass sales of 10mn units in the current financial year,
up 6.9% year-on-year (y-o- y). Within the sector, motorcycle sales are
expected to grow by 7.8% and this has attracted new entrants to take on
market leaders Hero Honda and Bajaj Auto , which have cornered
around two-thirds of sales between them. While BMI expects overall two-
wheeler growth to average 8.3% over the next five years, it will be carried
by the motorcycle segment. Although some consumers may still prefer
small cars, BMI believes a shift in focus towards the premium end of the
spectrum will ensure average annual sales growth of around 9% in
India's motorcycle segment over the next five years. Growth in scooter
sales is likely to average a more modest 4%. India stays sixth in BMI 's
Business Environment Ratings for the autos sector in Asia Pacific, with
55.4 from a possible 100. India shares the same pros and cons as China,
ranking highly in terms of high production and sales growth potential, but
with a low score for country structure (again caused by a large gap
between wealthy urban and poorer rural areas), which acts as a restriction
on future penetration rates. However, the country's regulatory environment
rating is bolstered by the government's efforts to encourage 'green'
motoring, as well as a number of free trade agreements which are
supporting the country's bid to become a regional export hub. In terms of
new opportunities, private equity (PE) funds are returning
to India's component supplier segment after little activity in 2009,
supporting BMI 's long-term core view that investment from non-auto
companies inthe sector will increase. PE deals with suppliers were worth
US$246mn in 2008, up from US$240mn in 2007. With the industry now
turning a co rner and India's total vehicle production forecast by BMI to
register average annual growth of 12% over the next five years, the related
growth for suppliers is attracting PE funds

6. The Two-wheeler Industry in India

he 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. Manmohan Singh, now
Prime Minister of India.

Previously, there were only a handful of two-wheeler models

available in the country. Currently, India is the second largest
producer of two-wheelers in the world. It stands next only to
China and Japan in terms of the number of two-wheelers
produced and the sales of two-wheelers respectively. In the year
2005-2006, the annual production of two-wheelers in India stood
at around 7600801 units.

The trend of owning two-wheelers is due to a variety of facts

peculiar to India. One of the chief factors is poor public transport
in many parts of India. Additionally, two-wheelers offer a great
deal of convenience and mobility for the Indian family.

Bajaj auto began trading in imported Vespa Scooters in 1948.

Meanwhile Automobile Products of India (API) commenced
production of scooters in the country in the early 50’s. Until 1958,
API and Enfield were the only producers of two-wheelers in India.
However, Bajaj signed a technical collaboration in 1960
with Piaggio of Italy to produce Bajaj Scooters. This deal expired
in 1971.

7. Automobile Industry of India-