Hero Moto Corp Ltd.

1
 Issue Cause Effect Theory Solution Competition

2010 Hero and Honda New brand Market Leader Hero Moto Corp Bajaj Auto,
Hero - Honda started seeing identity & logo- defensive should spend on Honda, TVS
decides to move each other as Hero Moto Corp strategies- R&D for Motors,
out of Joint competitors - Position innovation, Mahindra
Venture defence develop new Scooters, LML,
- Counter technology and Kinetic Motors,
offensive upgradation Suzuki, Royal
defence Enfield, Yamaha
- Contraction
defence

Honda didn't Hero group Hero Moto Corp

have intention might have to buys stake in
of sharing the pay higher Honda
upgraded royalties for the
technology upgraded
technology
Refusal to
merge the Spare
Parts business Hero Moto Corp Ltd. 2
 Market Size
(Sales unit 2012)
15.4 Million (Approx.)

Motor cycles Scooters Moped

10 Million 2.7 Million 0.78 Million

Hero MotoCorp
6.23 Million

Motor cycles Scooters

58% market share 15.2% market share
5.79 Million 0.41 Million
Hero Moto Corp Ltd. 3
Source: http://www.heromotocorp.com/hero_admin/data_content/pdf/annual_report/Annual_Report_2011_12.pdf
 Revenue Stream
Years 2007-08 2008-09 2009-10 2010-11 2011-12

Sales (units) 33,37,142 37,22,000 46,00,130 51,02,444 62,35,205

25% 24%

20%
17%
16%
15%
14%
15% Sales growth (nos.) %
13%
11%
12% OPM
10% 11% 10%
10%
10% NPM

5%

0%
2008-09 2009-10 2010-11 2011-12

Hero Moto Corp Ltd. 4

 Threat of New Entrants

Low Bargaining High Bargaining

Power of Suppliers Power of customers
Suzuki Others
Yamaha 4% 3%
4%
Honda Hero
16% MotoCorp
40%

TVS
14%
Munjal Showa Bajaj
AG Industries 19%
Extensive competition
Satyam Auto components
Sunbeam Auto
2012 Domestic Sales – 15.4 Million
Rockman Industries
Threat of substitutes

Hero Moto Corp Ltd. 5

 Rs. 79

76%
Rs. 45

Government Policies
High import duty on
motorbikes
105% R & D facilities in
U.S. Erik Buell
Racing
$ 20 Millions

Core Competency
Exports
0.17 Mn two-wheelers

Share Price
10 % since 2011 Tie-up with AVL for
1713-1905 engine development
Hero Moto Corp Ltd. 6
 Political
• Land acquisition
• Imposition of taxes

Technological Economical
• Technical collaboration with • Changing lifestyles & high quality

PEST
Steyr Diamler Puch • Deluxe segment (category)
• Largest investment of over Rs. 2500 Cr. 100-125cc grew up by 15%
to build an integrated R&D centre in 125-250cc category grew at 9%
Rajasthan • 4% excise cut & 1% reduction in CST
• Technical & Financial collaboration with • Higher interest rate & fuel prices
Showa Corporation Japan
Social
- Green Technology
- Safe Manufacturing
- Rain Water Harvesting
- The Green Supply Chain
- Vocational Training Camp
- Safe Rider Program

Hero Moto Corp Ltd. 7

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