SEMINAR PRESENTATION ON

BUSINESS POLICY

Two wheeler industry

Presented by:-
AWANISH KUMAR SINGH
P.G.D.M. 4TH SEM.
ROLL NO. 2008101018
TABLE OF CONTENT
Introduction
History of two wheeler industry
Advantage
Company profile
Major Players (Competitor )
Market Share
S.W.O.T. Analysis
Strategies
Recommendation
Conclusion

 Introduction
India, is the second largest producer of two-
wheelers in the world.


The Indian two wheeler market has a size of over

Rs100,000 million.

The segment can be broadly categorized into
scooters, motorcycles and mopeds.

The motorcycle market share is about 81.5% of the
total two wheeler market in India.

History of Two-wheeler
Industry
•The Automobile Products of India (API)
started manufacturing scooters in the
country.


•Until the mid 80’s, there were only three

major motorcycle manufacturers in India
namely Rajdoot, Escorts, and Enfield.

CNTD…
•1950-58 API and Enfield.
•
•
•1960-79 LML Vespa, Bajaj, Enfield
bullet, Jawa and Rajdoot.
•
•1980-89 Hero Honda, TVS Suzuki
and Kinetic Honda

Advantage

Sales of motor cycles in India is likely to touch the 10

million mark by 2010 !
Registered two-wheelers still growing.
Growth in exports and domestic sales are 24.34% and
11.92% respectively.
Middle class expanding by 30 - 40 million every year
Growing working population and Increased access
to credit.

Company profile
1)The Company was Incorporated on 19th January,1984 at
New Delhi as a joint venture.

2)Today Hero Honda is the largest two-wheeler manufacturer in
the world producing more than 3 million units of two-wheeler
per year.

3) The company's most popular model is the Hero Honda
Splendor, which is the world's largest-selling motorcycle.

 PRODUCT OF HERO HONDA

KARIZMA HUNK

CBZ PASSION

GLAMOUR ACHIVER

SUPER
SPLENDOR NXG SPLENDOR

CD DELUX DAWN
Key Players in Indian Market
Other Players
Kanda motors
Mahindra two wheelers
LML
Suzuki

Market Share
Others, 5.8%
Yamaha, Honda
3.8% Motors, 8.5%

TVS Motors,
17.7%

Hero Honda,
39.8%

Bajaj Auto,
24.4%
Indian two wheeler market – Competitive Scenario

Motorcycle
44% 36% 13% 4% 1% 2% <1% - <1%

- 15% 28% - 2% 46% 9% <1% -

- - 82% - - - 8% 10% -

Figures denote Mkt Share

( Apr - Oct 08)
India is now the second largest two-wheeler market in
 STRATEGIES
 (A) BUSINESS STRATEGY


The company has formed its business units based on the following
parameters:


1.) Common manufacturing processes: - This is the most important parameter
used by Hero Honda to create its SBUs as this depends on the engineering
and assembly processes.




 1 -Competitive Strategy
 2 -Co-operative Strategy


 (B) CORPORATE STRATEGY

 1-growth
 (Hero honda adopt Growth Strategy)
 -Conglomorate
 - Concentric


 2 -Stability
 3 -Retrenchment


 (C) FUNCTIONAL STRATEGY

 1-R & D
 2- Human research strategy
 3-Marketing Strategy
Product Portfolio of Hero
Honda
 
 Hero Honda has an extremely versatile product portfolio catering to
the various segments of the two-wheeler industry.


 It has the CD Dawn and the CD 100 positioned for the entry-level
bike segment primarily aimed at the rural market.

 The CD Deluxe, Splendor and the Passion models are aimed at the
first time users of the urban segment.

 The Passion Plus, Splendor Plus, Splendor NXG and Glamour are
aimed at the executive or deluxe segment who want a sporty
bike yet an affordable one. The premium motorbike segment is
catered to by the stylish products of Hero Honda Hunk, Karizma,
CBZ Extreme and Achiever. Finally, the scooter segment is
represented by the Hero Honda Pleasure.

 “ Hero Honda has a strong product portfolio.”
 STARS are units with a high market share in a
fast-growing industry.

 QUESTION MARK -These units typically
"break even", generating barely enough
cash to maintain the business's market
share. Though owning a break-even unit
provides the social benefit of providing
jobs and possible synergies that assist other
business units
 CASH COW are units with high market share
in a slow-growing industry. These units
typically generate cash in excess of the
amount of cash needed to maintain the
business.
 DOGS, or more charitably called pets, are
units with low market share in a mature,
slow-growing industry.
BCG matrix for Hero Honda Motor
Limited

Sl No. SBU M a rk e t Market R e la tiv e M a rk e t Quadrant

sh a re o f share of m a rk e t g ro w th in which
H e ro largest sh a re ra te the SBU
H53.8%
onda competitor lies
1 Motorcycles 27.5% 1.95 19.89 % STAR
( SBU ) ( Bajaj )

2 Scooters 12.8 % 55 % 0.23 12.36 % Question

(Honda) Mark
 Market share of tw o w heeler autom obile
sector
He ro Ho n d a

35.60% 27.50% B a ja j M o to rs

T V S M o to rs

Yam aha
M o to rs
Ho n d a M o to rs

O th e rs
9.50% 16%
4% 7%
Porters five force model for
Hero Honda:-

Threat of new entrants
 Mahindra & Mahindra (M&M), India’s largest tractor and
utility vehicle maker is buying the business assets of loss-making
scooter maker Kinetic Motor Company for Rs 110 croreto gain an
entry into the two-wheeler market.


Bargaining Power of Buyer:

 


 Buyers in automobile market have more choice to

choose from and the increasing competition is
driving the bargaining power of customers uphill.
With more models to choose from in almost all
categories, the market forces have empowered the
buyers to a large extent.



Threat of substitute Products:
 


 There is no perfect substitute to this industry.

Also, if there is any substitute to a two-wheeler,
Bajaj has presence in it. Cars, which again are a
mode of transport.


Bargaining Power of suppliers:


 Suppliers of auto components are fragmented and

are extremely critical for this industry since most of
the component work is outsourced. Proper supply
chain management is a costly yet critical need.
 

Competitive rivalry:


The industry rivalry is extremely high with any
product being matched in a few months by
competitor.
  
 STRENGTHS:

SWOT ANALYSIS
 STRENGTHS


Hero Honda introduced First stroke bike in the

Indian market.
Hero Honda gives 80 Km/Liter Avg.
Huge sale network (3500 Dealers).
Better sale service.
It has the highest share in automobile sector.

 WEAKNESS:

They have big gap between cubic capacities of

its products.
Its market share is reducing from last few
years.
Spare parts are too costly.

 OPPOURTUNITIES:

Hero Hondas the first manufacture to launch eco

friendly bikes with 4-stroke engines. They have
attained a stronger good will and popularity in
the industry and the consumers.

They should go in new segments of bikes.

There is large no. of young consumers in the
market. Company has to focus on them.

They have big opportunities in heavy bike
segments.

 THREATS:

Main threats to Hero Honda are their

competitors like:-

Bajaj Auto Ltd.

TVS motors Ltd.

Yamaha Motors India.

Honda motorcycle and scooter India.

Suggestions

Encourage exports.
Provide various two-wheeler financing schemes
among manufacturers.
Open R&D centers.
Pressurize government to reduce taxes and
duties.
Collaborate with global players.

 CONCLUSIONS
The feeling of freedom and being one with the
Nature comes only from riding a two wheeler.
Indians prefer the two wheelers because of
their small manageable size, low
maintenance, pricing and easy loan
repayments. Indian streets are full of people
of all age groups riding a two wheeler.
Motorized two wheelers are seen as a symbol
of status by the populace. Thus, in India, we
would see swanky four wheels jostling with
our ever reliable and sturdy steed: the two
wheeler.
 


Thank You

Any Questions

???