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Major Research Project
on sales performance and Brand preference of motorcycl companies - A partial analysis
For Partial Fulfillment Of the Requirement for the Degree of
MBA (Full Time) Batch - 2009 2011
Submitted by : Hitesh mandloi MBA (4rth Sem) Guided by : Prof. Shilpi Mehta SVGC, Indore
Affiliated to: Devi Ahilya Vishwavidyalaya, Indore
This is to certify that Mr. Hitesh mandloi, student of Swami vivekanand group of colleges Indore, of MBA IV SEM (Full Time) program has prepared Major Research Project Report on the topic ³sales performance and brand preference of motorcycle companies-A partial analysis.´ under my guidance.
Prof. Shilpi Mehta SVGC,Indore
I am Hitesh mandloi student of swami vivekanand group of colleges , Indore, pursuing MBA (IV Sem,Full Time) has prepared the Research on the Topic ³Sales performance and brand preference of motorcycle companies ± A partial analysis´. The research as per my knowledge is the original and genuine work. The research is not published in any research Journal previously.
Hitesh mandloi MBA 4TH Sem(Full Time) 2009-2011
I would like to take this opportunity to express my since gratitude to all those who guide me in right direction to complete this Project. I express my deep sincere gratitude to Mr. Akshay Dube Director of swami vivekanand group of colleges Indore, for his encouragement throughout the course of this study. I also express my sincere thank to Mrs. Shilpi Mehta lecturer of Swami vivekanand group of colleges ,Indore, for his constant guidance and assistance throughout this study. Last but not the least; I would like to thank my respondents for sparing their precious time to answer my questionnaire and giving me the valuable information that I needed.
Table of contents SR. No. 1 6-8 9-12 3-14 5 6 REVIEW OF LITERATURE RESEARCH METHODOLOGY A)OBJECTIVE B)HYPOTHESIS C)RESEARCH DESIGN D)SAMPLE DESIGN E)TOOLS FOR DATA ANALYSIS ANALYSIS AND INTERPRETATION OF DATA DISCUSSION OF RESULT A)FINDINGS B)LIMITATION C)CONCLUSION BIBLIOGRAPHY AND WEBLIOGRAPHY ANNEXURE 15-23 24-29 7 8 29-43 44-48 9 10 49-50 51-54 . 1 2 3 4 Particulars RESEARCH TOPIC INTRODUCTION DETAILS OF COMPANY RATIONALE OF STUDY PAGE No.
CHAPTER 1 INTRODUCTION .
The Indian two wheeler industry made a small beginning in the early 50¶swhen automobile products in India (API) started manufacturing scooters incountry. Indian streets are full of people of all age groups riding a two wheeler. BAJAJ Auto began trading in imported vespa scooters and three wheelers. It stands next only to Japan and china in terms of the number of two wheelers produced and domestic sales respectively.stroke bike. BAJAJ auto later overtook it. it set up a shop to manufacture them in technical collaboration with Piaggo of Italy. demand swelled. Under the regulation regime. The two wheeler segment isthe largest in the Indian automotive industry today in terms of volume. Until 1958. With the availability of fuel efficient low power bikes. pricing and easy loan repayment. The two wheeler market was opened to foreign competition in mid-80. low maintenance. jawa and Rajdoot were two-stroke bikes. various government and private enterprises entered the fray of scooters. While Enfield was four. In the initial stage API dominated the scooter segment.In 1948. Although. gaining a top slot. resulting in HERO HONDA-then the only producer of four-stroke bikes (100cccategory).327 units sold in country in year 2010-11 and two wheelers accounted for81. It was a complete seller market with the waiting period for getting a scooter from BAJAJ auto being as high as 12 years. With9. Finally. Indian prefer the two wheeler because of there small manageable size.684.were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. Ideal Java and Escorts. .23%of total vehicles sold in the previous financial year. The motor cycle segment was initially dominated by Enfield 350cc bikes and Escort 175cc bike. with only three manufactures viz Enfield.in 1960. foreign companies were not allowed to operate in India. API and ENFIELD were the sole producers. The motor cycle segment was no different. The agreement expired in 1971.And then market leaders-Escort and Enfield.INTRODUCTION India is the second largest manufacture and producer of two wheelers in the world.
Selling a concept that consumers will not buy affects the goodwill of the company. Consumers view a brand as an important part of a product and branding can add value to a product. and so the companies are nowadays putting enough of the firm¶s revenue into selling and promotion efforts . The two-wheelers have penetrated 7% of rural house hold and 24% of urban markets. a bike appeals equally to all. TVS Motors which has lots of firsts to its credit in the two-wheeler sector in the country was able to sell 1. In the motorcycle segment the company's growth in sales was in sync with the industry average. Several manufacture stasted success on account of their ability to make new products. while that of other twowheelers like geared scooters. a self employed person. and the annual sales of motorcycles in India expected to cross the 10 million mark by 2010. Two. Overall the industry sales of two-wheelers have grown by 15% from 6. Bajaj Auto one of the leading producers of automobiles in the country has been able to sell close to 2.The macho image of a motorcycle hits the psychology of an Indian individual and compels him to buy a motorcycle.To own a motorcycle is a dream of every Indian ± a service class man.wheeler sales in the country have sky rocketed in the recent years. thus it leaves an immense scope for the market to grow. The buoyant Indian economy with a growth rate of around 8% per annum is further expected to fuel the growth of two wheeler in the country. Two most powerful of them are ± changing customer Preferences and new product launches. No matter what the classis. identify target market segments and create an innovative product for them.3 million vehicles in 2005/2006. a businessman or a college boy. Bajaj Auto has emerged as a market leader in the entry level or price segment motorcycle with the Bajaj CT 100 accounting for nearly 40% of the market share. The share of motorcycles have increased over the years. . The company registered a 32% growth in the sales of motorcycles much above the industry average of 19%.57 million in 2004/2005 to 7. the sales of the company grew by almost 31%.A host of factors are at play these days which are driving the industry sales up. The low penetration of two-wheelers in the country 31 two-wheelers per 1000 citizens (2004) leaves immense scope for the growth of the market. scooterettes and mopeds have shown a negative growth or remained stagnant. It also commands a 62% market share in the premium segment of motorcycles with products like the Bajaj Pulsar DTSI.57 million in 2005/2006.34 million units during the same period thus registering an overall growth of 15% from the previous year. Launches of new products of high and consistent qualities are a key to growth.
which is the largest segment in the motorcycles category. The segment in which hero honda has emerged as a clear winner is the Deluxe segment. The figures are provided by the Society of automobile Manufactures Association (SIAM). The company has posted a 10% growth in sales accounting for a market share of about 77%.2 million units which is just a shade less than all the two wheelers sold by TVS during the same year. The table below shows the over all trend of Industry Sales over a 5 year period. Where the company has emerged as a clear winner by holding onto its leadership position is inthemopedsegment. . The company also expects to arrest the decline of its one time best seller TVS VictorthroughitsnewvariantVictorGLS. The motorcycle category is expected to see a further growth and according to industry experts it will drive all other category of two-wheelers to the periphery.The introductions of motorcycles like the TVS Star range of motorcycles have helped the company in gaining a healthy market share in this segment. In the motorcycle segment the company has been able to attain a market share of about 50%. the country leader in twowheelers hero honda have crossed the three million mark during the year 2005/2006 which is a good few lakhs more than its nearest competitor Bajaj Auto. with its flagship family of motorcycles splendor selling over 1. If this figures have daunted you the best is yet to come. The company accounted for nearly 40% of then two-wheeler market.
The two wheeler industry generates direct and indirect employment to about 6. . as well as are exported to over 60countries. the two wheeler industry was opened for 100 percent foreign direct investment. India produced 65 Million tyres during FY 200506. India was one of the largest manufacturers of two wheeler in the world in 2005-06. the India's share of the overall global two wheeler industry remains low as of 2007. A surge in the country's economic growth rate and purchasing power has fueled a 17% annual growth rate in the Indian two wheeler industry since 1991.INDUSTRY TODAY Following India's economic liberalization in 1991. Increased competitin amongst automobile manufacturers provides for a variety of competitive options for the consumer.000 units. when it produced 293.1 million people as of 2006-07.The automotive parts and cars exports has grown at an annual rate of 30% per year in the 21st century. However. India's tyre production meets domestic demand.
CHAPTER 2 DETAILS OF COMPANY .
The Hero Group began with a simple philosophy: toprovide excellent transportation to the common man.HERO HONDA company Profile: Hero. Like every success story. Starting as a manufacturer ofbicycle components. inexcellent products at an affordable price. which drives Hero even today. A thorough understanding of fast-changing consumer behavior. new market customer segments and product opportunities. To consumers. multi-product. The two wheeler division of the HeroGroup has already networked more than 3.geographically diversified group of companies. and a marketing mix sensitive tochanging customer needs. attain its global stature and self-reliance in the entiremanufacturing process.Hero's saga contains an element of spirit and enterprise of achievementthrough grit and determination. and has a substantial presence in mopeds and auto-ancillaries.The search for excellence led to the creation of several companies by theHero Group. form the core of Hero's marketing strategy andphilosophy. whichhelped the group.Keeping the wheels of progress turning are the individualcompanies of the Hero Group. .500 dealer outlets. coupled with vision and meticulousplanning. the dream ofproviding totalsatisfactionin all its spheres of activity. Eacha success story in its own right. in a total sense of belonging. Companies that maintained the ethos of perfect quality. Each an independent profitcenters. Hero is also the largest manufacturer of 100cc motorcyclesin India. each with itscomplement of trained mechanics and workers. in a fine quality oflife and to business associates.began its journey aroundfour decades ago. Hero has today grown into a multi-unit. It isthis spirit. at a price he couldeasily afford. a name synonymous with two wheelers in India. to employees.
We organise ourselves for a transparent and harmonious flow of work. Board of directors: Chairman : Rahul Bajaj.BAJAJ Company Profile: The Bajaj Group came into existence during the turmoil and the heady euphoria of India's freedom struggle. He has been the Chief Executive Officer of Bajaj since 1968 and is recognized as one of the most outstanding business leaders in India. Today. dedication . but especially to minority shareholders. Fairness . was a confidante and disciple of Mahatma Gandhi.to all stakeholders in the Company.of all relevant financial and non-financial information in an easily understood manner.We approach our responsibilities with ambition and resourcefulness. Disclosure . We respect sound theory and encourage creative experimentation.a commitment that the business is managed along transparent lines. The integrity. are often traced back to its birth during those long days of relentless devotion to a common cause. Vice Chairman: Madhur bajaj . Transparency . Jamnalal Bajaj. And we make our workplace a source of pride.resourcefulness and determination to succeed which are characteristic of the Company today. and was deeply involved in the effort for freedom. he has been recognized for his achievements at various national and international fora.of the Company¶s activities by a professionally competent and independent management and board of directors. to currently register an impressive figure of Rs.40 billion.70 million(1968). We have long left behind our annual turnover of Rs. Supervision . Bajaj is currently India's largest two and three-wheeler manufacturer and one of the biggest in the world.Company¶s Philosophy & belief¶s . founder of the Bajaj Group. Rahul Bajaj is the Head of the Group. As dynamic and ambitious as his illustrious predecessors.
Figure below shows the history graph with models which wentthrough predominantly through three phases. TVS Motor the launched variants of Victor. Board of Directors: Director : Gopal Srinivasan Chairman & Managing Director : Venu Srinivasan . In 2000 the first 4 stroke motorcycle was launched called Fiero. In 1979 Sundaram-ClaytonLimited (SCL) started Moped Division at House to manufacture TVS 50mopeds.To become independent & increase profitability theR&D activities were focused & after parting away with Suzuki in 2001TVS motor company was formed.TVS Motor Company Company profile TVS Motor Company is part of Sundaram Claytongroup in TVS group of companies.Fiero & new products like Centra & star. Overall TVS Motors establishedthe presence in each segment of two wheelers: Mopeds. which wastotally an indigenous design. The first indigenous product ³ Victor´was launched which was very popular. This success triggered introductionof new models every year. In 1982 SCL establishedJoint Venture with Suzuki Motor Corporation. TVS Motor Company is the main flagship company of Sundaram Clayton group. In 1994 the company enteredthe market segment of scooters with introduction of scooty 2S. Motorcycles andscooters. indigenously designed and developed.
YMI is committed to making products that benefit from the skills and technology used by Yamaha world-wide. and meet the needs of theIndian market. YMI was initially known as Yamaha Motor Escorts Ltd. is the fully-owned subsidiary of Yamaha Motor Co.a unique Japanese word that means 'touching people's hearts. To fulfill customer satisfaction. The third objective is to optimize the internal working system. Yamaha is aiming to make a significant contribution to Indian society and create products that the people of India will take to their hearts. . To achieve these goals. The first is customer satisfaction. Quality. four models in three years. The second is strengthening R&D.YAMAHA Company Profile: Yamaha Motor India (YMI) Ltd. YMI's motto is 'Speed.' 'Kando' also describes the 'spirit of challenge" to create new value surpassing customer expectations. Yamaha Motor25Company. purchased Escorts Ltd's remaining 26 per cent holding in their motorcycle joint venture Yamaha Motor Escorts Ltd in June 2001. and Yamaha¶s original design'. It was therefore renamed as Yamaha Motor India Ltd. YMI's mission is to constantly produce what customers are looking for. but the parent company.YMI follows Yamaha Motor's corporate mission of creating 'Kando' . by analyzing market trends and changes. YMI plans to produce one or more models in the first year. of Japan. YMI will pursue three major objectives within the company.
CHAPTER 3 REVIEW OF LITERATURE .
For a large portion of the population a scooter or a motorcycle is a necessary accessory for their livelihood. The hardening of interest rates at such a juncture leads to the customer postponing or deferring a new purchase. It offers mobility at a reasonable cost. this segment has found itself over-leveraged. caution enters the equation as look to keep NPAs under control. aspirations have outpaced real income growth leading to a greater propensity to borrow and spend. covering locations that fall outside city limits and being dependent on correspondent banking relationships and a robust collection infrastructure. the two-wheeler industry has been under an analytical microscope with volumes slowing down and even showing a negative growth. The industry seems to be caught in a negative downturn at the moment but the key question remains ² is this downturn temporary or is it here to stay? From the financiers¶ perspective. The two-wheeler has always been an intrinsic part of the Indian milieu. The customer typically belongs to the lower-middle and middle class. This is what has happened to the 2 wheeler industry today . In the case of a downturn. Firm interest rates are being cited as the obvious reason for the lack of demand . Of late. It offered and continues to offer the Indian middle class the freedom from the clutches of an often non-existent or unreliable public transport system. With rising inflation. Financiers are being more cautious in their lending. servicing this industry and this customer segment is an operationally intensive exercise. . leading to greater pressure on volumes. For this segment.LITRATURE REVIEW Two-wheeler industry: Facing a crisis?he two-wheeler industry has seen an unexpected slump in the current year.
such as electrically powered motorbikes are also being introduced in the market. it is imperative that the manufacturers. working towards maximising customer solutions and services. As a general trend the industry has begun to lower interest rates. Manufacturers are also working at increased segmenting of the market launching products aimed a newer segments like girls and women. To sum up. given our infrastructure. . This environment has prevailed for the past six months but this is beginning to see a change with inflation showing a definite decline and interest rates showing the first signs of softening. Manufacturers have a very strong relationship with their suppliers and dealers but very often view the financier as an external µservice provider¶. keeping the category in the minds of potential customers. However we must wait and judge the aspirational impact of owning a car on the Indian consumer. At the same time. . dealers and financiers work together even more closely. brand building and promotional spends of top manufacturers have not shown significant reduction. The demographics of the country remain favourable for the industry and there is a tremendous tailwind in the economy and a spirit of prevailing optimism in the country.The one-lakh-rupee car is seen to be another threat to the two-wheeler industry but the truth is that the running and maintenance cost and the sheer convenience of a two-wheeler. The market also is seeing a lot of action in the 150cc plus market with new models slated to hit the market. Given these changes in the environment I expect to see an increase in demand with a certain lag effect ² the time it takes the benefits of reduced inflation to impact the customer¶s cash flows. in a segmented fashion. The financier has to have greater integration in the entiresupply chain. While this will have a temporary impact. are difficult to replace. which makes me very confident that a turn around in the two-wheeler industry is just around the corner. I expect that the festive season will bring in price-offs and discounts along with other promotional offers that willprovide another fillip tosales . Newer products. I would like to state that all the economic indicators remain positive.
scooterettes and higher dis-placement bikes bring in the rest. The growth has begun to sputter out and most players are using marketing muscle to push numbers. the two-wheeler market is once again witnessing something similar. The 100 cc four-stroke motorcycle comprises just over 50% of the total twowheeler market. The current degrowth is basically happening in the entry level motorcycle segment.Will the company be able to kickstart growth in a nowskidding bike market? Bajaj is betting it can Nandini Sen Gupta 2007 Aug 02 Things are not going too well for India¶s seven million unit strong motorcycle market. the parallels with the late 90s becomes clear. Scooters and scooterettes are doing well so are the 125 cc and above motorcycles. the Pune-based two wheeler major is also readying to redefine the entry level segment with its new motorcycle due out shortly. But the scooter market was rapidly depleted as consumers moved away from them. Excerpts from the interview: The motorcycle market has been going through a fairly steep de-growth and is down more than 14% in June.A New Entry In His Motorcycle Diaries Bajaj Auto is suddenly in the news. it's degrowth is pulling down the entire pile. While scooters. Apart from the partnership with French auto maker Renault for small cars and light trucks and buses. Back then scooters were 50% of the two-wheeler market and motorcycles contributed the balance 50%. But because the 100 cc segment makes up two-thirds of the motorcy-cle market. So will the moto market pick up speed once the new models start rolling in? ET AutoMania spoke to Bajaj Auto MD Rajiv Bajaj for some answers. For managing director Rajiv Bajaj this is nothing short of a moment of reckoning. Today. And if we look back. . What do you think is the trigger? Is it due to the interest rate squeeze? Or is there another reason for the skid? I believe there's a fundamental shift taking place in the two-wheeler industry.
So history seems to be repeatingitself. In the 100 cc market. Our product will be priced in the sandwich segment but will be technologi-cally and in terms of features a bike that belongs to the performance segment. which will be launched in the first week of September. . One third of the market comprises the 125 cc and above range.What is the current segment-wise break up in the motorcycle market? Currently the market is divided into three segments. Bajaj.he is willing to pay almost Rs 10. HMSI. In the 125cc and above motorcycle segment too there have been new launches from all these players. And that's true as much for Bajaj as for Hero Hondaor TVS.Why is the degrowth happening in that segment alone? I believe it is product fatigue. In the scooter and scooterette segment. How will your new product help plug this difference? The new product will offer consumers something different in the value or executive segment. will be able to create fresh excitement in this market. Now they are switching off from the 100cc-fourstroke bike. That's where the volume difference comes in. That's why the growth has moved to these segments. He pays that extra amount for a perceived differen-tial that we can tap into with a product that offers a real one. If as you say the 125 ccplus market is doing well. We have market leader-ship at the top and at the bottom of the pile but in the middle Hero Honda enjoys over 90% marketshare. why the increasingly yawning difference in monthly volumes between Bajaj and Hero Honda? That's mostly due to the degrowth in the 100 cc segment and the fact that we have rationalised our dealer inventory. the difference I believe will be a lot less. TVS have all introduced new products. If you compare retail to retail. CD Dawn from Hero Honda and Star and Star City from TVS. It's become a zero sum game with marketers pushing the bikes Will this trend lead to a more fundamental shift in the motorcycle market? Absolutely. the products haven't changed. Nearly two decades ago. HeroHonda. One third comes from the entry level 100 cc bikes which includes the Platina and CT100 from Bajaj.000 more than a similar bike in the entry level segment. We believe that our non-100 cc new motorcycle. The remaining onethird comes from the segment sandwiched in between which is Splendor Passion territory. the consumer had switched off from scooters. Yet he is unwilling to pay a couple of thousands more for a 125 cc-plus bike. This is a very curious consumer -.That's the reason why there's no demand pull there any more.
this segment has found itself over-leveraged. For a large portion of the population a scooter or a motorcycle is a necessary accessory for their livelihood . As a general trend the industry has begun to lower interest rates. In the case of a downturn. . .The one-lakh-rupee car is seen to be another threat to the two-wheeler industry but the truth is that the running and maintenance cost and the sheer convenience of a two-wheeler. Retail Centurion Bank of Punjab THE two-wheeler has always been an intrinsic part of the Indian milieu. caution enters the equation as financiers look to keep NPAs under control. With rising inflation. covering locations that fall outside city limits and being dependent on correspondent banking relationships and a robust collection infrastructure. This environment has prevailed for the past six months but this is beginning to see a change with inflation showing a definite decline and interest rates showing the first signs of softening. Financiers are being more cautious in their lending. servicing this industry and this customer segment is an operationally intensive exercise. It offered and continues to offer the Indian middle class the freedom from the clutches of an often non-existent or unreliable public transport system. the twowheeler industry has been under an analytical microscope with volumes slowing down and even showing a negative growth. It offers mobility at a reasonable cost. . aspirations have outpaced real income growth leading to a greater propensity to borrow and spend. .Two-wheeler industry: Facing a crisis? 2007 Oct 16 VIVEK VIG Country Head. The customer typically belongs to the lower-middle and middle class. However we must wait and judge the aspirational impact of owning a car on the Indian consumer. Given these changes in the environment I expect to see an increase in demand with a certain lag effect ² the time it takes the benefits of reduced inflation to impact the customer¶s cash flows. are difficult to replace. leading to greater pressure on volumes. The industry seems to be caught in a negative downturn at the moment but the key question remains ² is this downturn temporary or is it here to stay? From the financiers¶ perspective. given our infrastructure. For this segment. The hardening of interest rates at such a juncture leads to the customer postponing or deferring a new purchase. Of late. in a segmented fashion.
The demographics of the country remain favourable for the industry and there is a tremendous tailwind in the economy and a spirit of prevailing optimism in the country. . The market also is seeing a lot of action in the 150cc plus market with new models slated to hit the market. dealers and financiers work together even more closely. . such as electrically powered motorbikes are also being introduced in the market. it is imperative that the manufacturers.Manufacturers are also working at increased segmenting of the market launching products aimed a newer segments like girls and women. Manufacturers have a very strong relationship with their suppliers and dealers but very often view the financier as an external µservice provider¶. which makes me very confident that a turn around in the two-wheeler industry is just around the corner. Newer products. To sum up. I expect that the festive season will bring in price-offs and discounts along with other promotional offers that will provide another fillip to sales. . I would like to state that all the economic indicators remain positive. While this will have a temporary impact. working towards maximising customer solutions and services. The financier has to have greater integration in the entire supply chain. keeping the category in the minds of potential customers. At the same time. brand building and promotional spends of top manufacturers have not shown significant reduction.
up 20% in the period April-September 2007 over the corresponding period last year. The domestic sales of the largest category ² motorcycles of engine capacity 75 cc and above. inventory levels. tends to get exaggerated many times over. Everyone expected demand to pick up speed. All of that finally impacted overall demand and offtake. of course. motorcycles are bellwether products. But we must remember that we are coming off a high growth rate. but less than 125 cc ² were down by over 21% in the first six months. So when the credit squeeze happened. . the Reserve Bank of India (RBI) decided to cut back. Last year. according to statistics published by the Society of Indian Automobile Manufacturers (SIAM). As a result of the tightening by the central bank. The issue.The domestic sales of two-wheelers is down by 9. Firstly. The domestic sales of scooters were. . consumer durable demand has started to take a knocking as well. and the motorcycle market in particular. the two-wheeler demand got hit first. The other reason for the two-wheeler demand slack is. is three-fold. In that sense two-wheelers are a lead indicator of sorts for the economy. loans to two-wheelers got severely pinched. It did not and that led to higher inventory levels. I feel. That brings me to the important question: is the two-wheeler slowdown a temporary blip or a long term trend? I don¶t believe the demand for two-wheelers will perk up till the money supply eases out and banks start giving out loans once . Typically. That should not be mixed up with a slowdown in the economy. With the money supply going up really fast. And any slowdown in the rate of economic growth. however.VENU SRINIVASAN CMD TVS Motor Company THERE is no doubt that the twowheeler market in general. And sure enough. not a car. At the bottom of the economy. two-wheeler loans saw a huge amount of delinquency. Within the overall twowheelers category. . then commercial vehicles dropped and then the slowdown hit the car market as well.2%. There is another angle to that story. there has been a slowdown in the rate of economic growth. two-wheeler financing was the first to feel the pinch as banks cut back. So the way demand performs in two-wheelers is an indication of things to come. motorcycles and stepthroughs are down by 15. And now it¶s no longer just the automobiles. motorcycles are the first thing that people actually buy. . Last October-March saw stock rising for the big three bike manufacturers ² Hero Honda Motors Ltd. The second reason for the demand skid in motorcycles is the credit squeeze. is witnessing a demand slowdown.47% in the first six months of the fiscal 200708. indeed even a one per cent decline. Bajaj Auto Ltd and TVS Motor Company.
Do I see light at the end of the tunnel any time soon? Not really. This will soon start to bite. . Subsidies on petroleum products and fertiliser are rising rapidly on account of the increase in global crude oil prices ² the price of Indian basket of crude has gone up from a low of about $63 a barrel in May this year to about $78 a barrel now. I believe there is still a lot of pain to come.Right now a strong rupee ² which has appreciated by about 15% against the dollar in the last one year ² is propping up economic activity in the country by boosting imports.again. Even the launch of new models will not make much of a difference to the demand situation. But that is not sustainable in the long run. The new launches may lead to marketshare changes but overall sales won¶t increase very much.
However. Further. Existing financing sources are going to be challenged given the reach required and the cost of serving these ³higher credit risk´ segments. increase in youth population. recording annualised shareholder returns of over 40%. low penetration levels in particular in smaller towns and rural markets and shorter replacement cycles.The urban middle class (annual household income between Rs 2-10 lakh) and the rural aspirers (annual household income between Rs 1-2 lakh). (In Indonesia. The Boston Consulting Group OVER the last decade the two-wheeler industry has been one of the highest value creators. One of the chief drivers of this value creation has been the strong sales growth. Finally. fundamental demand drivers remain strong ² rising income levels. The relevant segment that could migrate is the µpremium¶ commuter segment which comprises only 5-10% of the overall volumes. it has largely been for the entry level segment both the 125cc+ motorcycle segments as well as the ungeared scooter market have expanded. If one examines the recent decline. Thus ironically it has been the supply (of finance) that has been the hurdle and not customer demand. in the last six months of this financial year the industry recorded an overall decline of 7% on the back of a rising interest rate regime. Thus product demand will get created and the focus will be on delivering affordable financing. the absence of a . Several financiers have withdrawn from the market. driven primarily by high delinquency levels. absence of quality public transportation. we estimate that the total cost of ownership (TCO) for the ³1 lakh car´ would be ~3x that of a two-wheeler and this would deter customer migration. The threat from the ³1 lakh car´ appears to be limited. The primary reason for the decline has been the limited supply of credit. The focus needs be on innovation across product-markets and to redefine their scope of business operations. Two-wheeler players will need to develop captive or alliance opportunities for credit provision in such markets.SHARAD VERMA Principal. the prospect of the much awaited ³1 lakh car´ has raised apprehensions of cannibalisation of demand. These events have the raised the question of whether the industry is facing a crisis and is the negative growth the start of a long-term trend. Both these segments offer unique challenges. Having said that. The current substitute in the form of µused cars¶ already exists. or reduced their exposures. for the industry to realise this demand and sustain the growth momentum a different approach is required from the past. The growth in the urban middle class will be driven by increasing number of households and rising income levels. In the domestic market two segments are expected to contribute significantly to growth. which has sustained at over 15% over the last five years. Further.
in particular in SE Asia and Latin America. The critical aspect is to not view this as an exports option but as an opportunity to create a local dominant position in these markets.developed financing infrastructure has prompted local players to create their own captive arms for their customers). India has players which have the scale and capabilities to compete on a global basis and there is a significant opportunity available in developing markets. rather than an adaptation of the existing urban vehicle. The challenge here is to create a unique product for this market. . The growth in rural aspirers will be primarily driven by an increase in penetration levels (current figures are at 15 vehicles per thousand household). Finally. local players need to explore global markets to de-risk local demand cycles. which meets the needs and price expectations of the customer.
especially in the entrylevel motorcycle segment. . which is a growth of 5.06 million units sold in first half of financial year 2008-2009.9 percent over the same period in the last fiscal year (2008-2009). registered a consistent sales growth of 11. (CARE) has thrown light over the developing Indian two-wheeler industry. The total number of bikes sold in this segment for first half of the 2009-2010 financial year was 25.548 for the same period in 2008-2009.8 percent compared to the last year's total sales results.8 percent. The research estimates that the domestic motorcycle industry sales will go beyond 9 million units by 2014. already have one in their household while in the rural areas. the domestic motorcycle market registered a growth of 14. The economy conscious segment of small capacity motorcycles is the largest segment in the Indian motorcycle bazaar and it currently holds a market share of close to 72-73 percent out of the overall motorcycle sales in the country. The CARE study also suggested that 57 percent of the young population living in cities who can afford to buy a twowheeler. 15 percent of young people who could afford a twowheeler and had purchased one already. The total sales of domestic models recorded in the first half the ongoing financial year was 3.BIKES MAKE A COMEBACK The domestic two-wheeler industry has seen strong sales in the first half of the ongoing financial year and study suggests that the situation will get better Varad More 2009 Oct 29 The latest report disclosed by Credit Analysis & REsearch Ltd.5% compared to last year.52 million units as compared to 3. the rather miniscule market of motorcycles falling in the category of 249cc and above showed incredible growth rate of 30. Motorcycles ranging from 125cc upto 249c. Sales of entry level motorcycles falling under the 75cc to 124cc bracket experienced a growth of 16 percent over last year's results in the same period. which is steadily recovering from the heavy losses suffered during the recent economic meltdown. This highlights the potential of growth and benefits the Indian motorcycle industry can reap from rural areas. Interestingly. These statistics indicate that the industry has once again caught on steady pace and it will see better times in days to come.512 as against total sales of 19. According to the sales results for the first half of the financial year 2009-2010. which seize 23-25 percent of the total market share.
As compared with a 30% volume growth in 03-04 in the motorcycle segment. motorcycles.90 lakh units last fiscal. the company¶s presence in low volume segments such as geared scooters and mopeds is likely to put pressure on margins. Hero Honda¶s April-September µ04 sales surged 35. while BAL¶s cumulative bike sales grew 25% at 6. the new strategy of bike makers is to reduce dependence on entry-level motorcycles and focus on higher margin executive (mid-market) and premium products. Meanwhile. the overall two-wheeler market is expected to grow by 10% and the motorcycle segment by 12% during 2004-05. except for Star and the 2-stroke motorcycles. twowheeler manufacturers are keeping their fingers crossed over future trends.Two-wheeler industry lines up new launches to fuel sales Lijee Philip MUMBAI 13 OCTOBER 2004 Oct 14 NEW launches and a line-up of promotions in the two-wheeler industry is expected to fuel a 15-20% jump in volumes this festive season. the two-wheeler segment will find it hard to maintain the growth momentum. it is the largest constituent of the two-wheeler industry. ³we have lined up incentives for all our products. sources said. Bajaj Auto and TVS.´ The two-wheeler segment expects a rebound in the second half of the current financial year.2% at 12. Hero Honda. ³We are banking on zero per cent schemes and loan melas to trigger growth. Adds R Chandramouli of TVS.2 lakh motorcycles from 9. While high petrol prices are likely to act as a dampener to the festive season growth. .12 lakh units compared to 4. have lined up promotional schemes this festive season.05 lakh units in the year-ago period. Going forward. Understandably two-wheeler manufacturers have geared up to increase production to meet the increase in demand. Industry players have budgeted an estimated Rs 150 crore to be spent in the next two to three months on promotional activities and gifts. Moreover. which sees the real brand wars. RL Ravichandran of Bajaj Auto. expects new launches to contribute the most to this festive season.The October-December period tends to account for more than one third of annual sales for the two-wheeler industry. with increasing penetration of motorcycles in the urban and semiurban markets and entry of newer players.´ he says. The 3 big two-wheeler companies. While two-wheelers receive a sales boost due to the marriage season and bonus time for salaried employees.
CHAPTER 4 RESEARCH METHODOLOGY .
As India is developing as potential market for all the area.with the advancement in technology transportation means are developing very fast. It becomes necessity for life. This study will reveal comparison of sales and branding strategies and performance of automobile companies with special concern with two wheeler in Indian market.Automobile companies planning for their product development as consumer preference they are branding and promoting their product in very specialized manner.it is necessary to understand their strategies and to study affect their strategies on sales and brand performance. .1.RATIONALE OF STUDY Transportation is major concern of daily life. As a marketing management student. There are few good player which largely affect the market.
The consumer gets the best in the presence of many motorcycle companies which are offering various schemes. It desires to improve its market position. For this we need to know the awareness. which would not only be beneficial for the customers in helping them to get a better insight of the clear scenario of the industry but also be of use to the companies which aspire to cater to the needs of the consumers. behavior and preference of the potential customers.2. Hero Honda is providing various schemes from last 10-15 years. perception. motorcycle industry philosophy holds that achieving organizational goals depends on knowing the needs and wants of target market and delivering the desired satisfaction better than what competitors do. . So how does one make a decision? What are the various options available to the consumers? Which company should one opt for? The choice seems endless. attitudes.OBJETIVES OF THE STUDY Automobile industry has always been a talk of business matters. Therefore we intend to pursue a project on sales performance and brand preference of motorcycles in India. In automobile business too.
The questionnaires were structured and disguised.3.Data Collection In the field of sales performance of motorcycles. . a structured survey yielded better result. For knowing the brand preference of motorcycles. It provided versatility and helped in recording not only factual data but also attitudes and opinion of the consumers about motorcycles. The primary data was collected through questionnaires. the objective of inquiry was not revealed to the respondents and it was structured because a formal list of questions was formed so as to get the information. Since the customers of bikes have diverse socio-economic and cultural backgrounds. the data was collected from the dealers of the companies. Disguised because. the data was also collected by users.
inference drawn did not pertain to a quantitative estimation of value but based on qualitative logic. . The non probability sampling approach was adopted where the chance of a unit being included in sampling cannot be estimated. All such people in Indore formed the sample frame.Sampling design After deciding upon the data collection approach as well as the mode of communication to be adopted.4. which included the appropriate selection of the respondents as well as the number of people in the target sample. Also. The entire set of various segments in the population comprised all people related to motorcycles. The next step was to generate sample which was are presentation of that sampling frame. the next step was designing the sample. This approach was useful as the size of sample was not large. Precise precautions and assumptions were made using the sampling estimation. The approach was adopted for establishing certain attitudes and beliefs. In other words the respondents selected for the purpose of data collection should be representation of large target market.
5.Tools for Data Analysis Analysis of data will be done with the help of comparison on percentage basis and by using-Percentage -Statistical tool . 7.Sample size The sample size for survey of brand preference ofprospective customers comprised of prospective customers comprised of100 people from different field like professionals. students. SAMPLE TECHNIQUE Sample technique used in this survey will be random sampling which is the purest form of probability sampling. 6. salaried etc.
CHAPTER 6 ANALYSIS AND INTERPRETATION OF DATA .
CHAPTER 6 LIMITATION .
5.Due to language problem it is possible that the respondents are not be able to understand questionnaire and can cause misleading result. 3.LIMITATIONS 1.Smaller sample may not always give better result. . Sample may not be true representative of the whole population.The research will be conducted in a limited area.The possibility of the biased responses can not be ruled out. 6. 4.the internet can be irrelevant. 7. 2. Lack of availability of full information.Time will be major constraint.
CHAPTER 7 CONCLUSION .
market segmentation. reliability. easy finance option.CONCLUSION The study intends to portray an in depth Analysis of sales performance and brand preference of motorcycle companies in India with special reference to Indore. The basis or the criteria for analyzing the sales performance and brand preference have taken to be style. affordable mobility. power. customer satisfaction. are doing a remarkable job. Various factors responsible for the growth motorcycle industry in India are advertisements. The study reveals that the growth of motorcycle industry is an industrial boom in India. TVS. advanced technology and various other features. price. self start. short replacement cycles. fuel efficiency. demography factor and many other. and companies like Hero Honda. product differentiation. Bajaj. .
CHAPTER 8 BIBLIOGRAPHY WEBLIOGRAPHY .
Philip.automobileinindia. 9th edition.2004) WEBLIOGRAPHY 1. Schiffman.com 4.tvs. Prentice hall Of india Pvt. (Engelwood cliffs.www. NJ.www.yamaha.www. Ltd.com 3. edition´.R. New Delhi.bajaj.herohonda. Consumer behavior.New Delhi.2nd Kotlar.com 5www.com . ³Marketing management´.g Leon and kanuk.. ³Research Methodology´ ³Vishwa Publication.com 2.www.:Prentice hall.Bibliography Kothari C.
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