CHAPTER 1 INTRODUCTION

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Introduction
In view of the increased competition due to globalization and the expansion of economy, all industries need to constantly add more attributes and features which consumer want in two-wheeler. In this context companies have to adopt more innovative and consumer friendly attributes so that their product should be more popular among the customer.

1.1 Evolution of Indian two wheeler Industry

The two-wheeler industry in India has been in existence since 1955. It consists of three segments viz Scooter, Motorcycles, and Mopeds. The increased sales volume of this industry is proof of its high growth. In 1971 sales were around 0.1 million units per annum. But by 1988 the figure had risen to 3 million units per annum. Similarly capacity of production have increased from 0.2 million in seventies to more than 4 million in the late nineties. (1960-69) The automobile industry being classified as one of important under the Industry Policy Resolution of 1948 was therefore controlled and regulated by the government. In order to encourage manufacturing besides restricting imports of complete vehicles, automobile assembler firms were phased out by 1952 and only manufacturing firms allowed to continue production of automobile was licensed; which meant that a firm required a licensing approval in order to open a plant. It also meant that the government determined a firms capacity of production. During this period collaborations with foreign firms were encouraged.

(1970-80) This was a period during which the overall growth rate of the twowheeler industry was high. Furthermore, the levels of restriction and control over the industry were also high. The former was the result of the
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steep oil price hikes in the year 1974 following which two-wheeler became popular of personal transport because they offered higher fuel efficiency over car. (1981-90) The technological backwardness of the Indian two-wheeler industry was one of the reasons for the initiation of reforms in 1981. Foreign collaborations were allowed for all two-wheelers up to an engine capacity of 100cc. Between 197479 sales of two-wheeler increased by 60%, while that of cars declined by 21% and jeeps grew only by 11%. Indian motorcycles in the seventies had two major drawback viz-low fuel efficiency and high weight. Worldwide however, there was a trend towards using high strength, low weight materials for various components that resulted in vehicles that were compact and lower weight.

(1991- 1999)

The reform that began in the late seventies underwent their most significant change in 1991 through the liberalization of the economy. The two-wheeler industry was completely deregulated. In the area of trade, several reforms were introduced with the goal of making Indian exports competitive. The twowheeler industry in the nineties was characterized by an increase in the number of brands available in the market, which caused to compete on the basis of fuel efficiency improved by (60-100)% in the new vehicles. In the seventies Motorcycle mileage was on an average between 25 to 50 kmpl. For Mopeds it improved from 50 to 80 kmpl. Output of the engine also increased from 3-4 hp to 10hp per 100cc. In the Motorcycle segment, the new 100cc models compared well against the existing heavier models of 250cc, as they were lighter and more fuel-efficient.

1.2 Some Interesting Facts About Two Wheeler Industry

In India,
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 India is second largest manufacturer and producers of two-wheeler in the world. It stands next only to Japan and China in terms of the number of the two-wheeler produced and domestic sales. Indian two-wheeler industries have made beginning in early fifties when automobile products of India started manufacturing scooters in the country. In 1948 Bajaj auto began trading in imported Vespa scoops and threewheelers. In the initial stage, automobile product of India dominated the scooter segment; it was later overtaken by Bajaj auto limited. Although various government, private enterprises entered the fray for scooter. Under the regulated regime foreign companies were not allowed to operate in India. It was a complete seller market with the waiting period of getting a scooter from Bajaj auto being as high as 12 years.

The Motorcycles segment was no different with only three manufacturers viz Enfield, Escorts and Ideal Jawa were two stroke bikes. While Enfield and Rajdoot were four stroke.

With the availability of fuel efficient, low power bikes, demand swelled resulting in Hero Honda then the only producer of four stroke bikes gaining o top slot. In 1990 the entire automobile industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in 1992, Barring Hero Honda, all the major producers suffered from recession in 1993 and 1994. Hero Honda showed a marginal decline in the year 1992.

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1.3 Change in manufacturing view & strategy of two wheeler market

Till 1990, the two wheeler Industry was mainly dominated by metal body geared scooters and the number of producers were less than five. This oligopolistic market structure has changed with the entry of lighter, 100 CC motorcycles. This has resulted a shift in the consumers preference from scooters to Motorcycles. India is considered as the second largest manufacturer of two wheelers in the world. The two wheeler segment in India can be classified in to three major segments-Scooters, motor cycles and mopeds. During the year 2000-01, the sale of motor cycles crossed 48 per cent where as the sale of Scooters have receded. This shift in demand and sales position in the two wheeler segment may continue. As a result of this, the sale of Scooter segment is expected to fall further and the sale of motor cycles will go up further. This trend has also influenced the production strategy of major two wheeler-manufacturing companies. The expansion plans adhered by Bajaj Auto, LML and TVS have given more stress to the motorcycle segment. With the incremental capacity addition of these companies, there will be an estimated production of 2.20 million vehicles by the year-end of 2001-2002. There will be a corresponding growth in the demand for Motor cycles. This segment is expected to grow at an average of 22 per cent in the year 2001-2002. Changing strategy of two wheeler market Changing product portfolio: In the past two years, Bajaj Auto has successfully revamped its strategy to emerge as the number two player in motorcycles. From a company that was predominantly a scooter and three-wheeler manufacturer, Bajaj Auto now derives nearly half of its revenues from motorcycles (14% in FY01). Going forward, the company plans to introduce models that will cover the entire price spectrum. This initiative should continue to fuel growth. Growth potential : In the last ten years, the two-wheeler industry has grown at a CAGR of about 10%, which we expect to continue in the long term. Motorcycle demand would be primarily driven by replacement demand, upgradation, affordable credit and introduction of motorcycles in the utility segment (just to put things in perspective, bank rate has come
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down from 10.5% in FY98 to 6.25% in 1HFY03). With its 'Boxer' range, Bajaj Auto has already established itself in the entry-level motorcycle segment. It is now set to tap the sub Rs 30,000 category, which is likely to be the growth engine for the future. Kawasaki partnership : Bajaj is in the process of developing a '125 cc world bike' based on Kawasaki's technology platform, which is slated for a 4QFY03 launch. Kawasaki intends to utilise Bajaj's facilities as a global outsourcing base for the 125 cc bike, particularly for South East Asian markets. If successful, this could push topline growth of the company into a new trajectory over a period of time. Changing demographic profile : Studies by research agencies like The National Council for Applied Economic Research (NCAER) on Indian households puts forth the latent growth potential for the twowheeler industry. As per the study, the consuming class that was estimated at 17% of total households is expected to touch 46% by. Poor urban transport infrastructure, urbanisation, rising double income families and robust growth of the services sector offers good longterm growth prospects for lead players like Bajaj Auto Competition : Given the long-term growth potential of the motorcycle segment, existing manufacturers expanded their capacities while new players have tied up with transnational companies to tap the local market. Hero Honda triggered a price war in 1QFY03 with a special discount and other players followed suit. If demand fails to meet capacity expansion, industry will suffer in the near-term. Scooters losing sheen : Bajaj also has presence in segments like geared scooters and step-thrus that are losing out to trendier and fuelefficient motorcycles and ungeared scooters While the company expects demand for scooters to stabilise, there is a strong possibility that low-end motorcycles will continue to eat into the scooter segment. Since this division is the cash cow for the company, as sales contract, margins will come under pressure. Equity exposure : Bajaj Auto, traditionally, has had a high exposure to stock markets. The company's total investment of surplus funds in FY02 was Rs 22 bn, a rise of 38% YoY. Of this, investment in equities (including equity mutual funds) amounted to Rs 8.5 bn, an
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18% rise YOY. Given the volatility in stock markets, this is a cause of concern. Despite huge surplus funds, the company's dividend payout ratio has also been lower historically (27% in FY02). Margin pressure : As the product profile changes in favor of motorcycles, margins are likely to come under pressure. This is because, going by industry standards, the company enjoys better margins in scooter and 3 wheelers than it does in the motor cycle segment. Bajaj limited, with a capacity of 2.3 m vehicles, had a 28% market share in the two-wheeler segment in FY02. The company has traditionally been a key player in the geared scooter segment. But the shift in consumer preference towards motorcycles had caught the company unawares. However, over the last two years, Bajaj fought back with a slew of new motorcycle launches that have met with success. This has resulted in the company gaining about 23% of the motorcycles market share in FY02, up from 16% in FY00. The company's sales mix (in volume terms) consists of 30% geared scooters, 48% motorcycles and the rest from step thrus, ungeared scooters .

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1.4 Two Wheeler Manufacturers in India

The major players in the two wheeler industry are 1. BAJAJ 2. HERO HONDA 3. T V S 4. YAMAHA 5. HONDA

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1.5 Automobile Market in India

The Indian automobile industry is the tenth largest in the world with an annual production of approximately 2 million units. Indian auto industry, promises to become the major automotive industry in the upcoming years and the industry experts are hopeful that it will touch 10 million units mark. Indian automobile industry is involved in design, development, manufacture, marketing, and sale of motor vehicles. There are a number of global automotive giants that are upbeat about the expansion plans and collaboration with domestic companies to produce automobiles in India. The two-wheeler manufacturers in India are Honda Motorcycle & Scooter India (Pvt.) Ltd., TVS, Hero Honda, Yamaha, Bajaj, etc. The heavy motors including buses, trucks, auto rickshaws and multi-utility vehicles are manufactured by Tata-Telco, Eicher Motors, Bajaj, Mahindra and Mahindra, etc.

1.6 Market Share

Among the two-wheeler segment, including scooters and mopeds- motorcycles have- major share in the market. Hero Honda contributes 50% motorcycles to the market in which Honda holds 46% share in scooter and TVS makes 82% of the mopeds in the country. In the three wheeler industry in India, Piaggio holds 40% of the market share. Bajaj is the leader by making 68% of the three

CHAPTER 2
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COMPANY PROFILE

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2.1 TVS Motor Company Ltd.: History

1982 - The company was incorporated as Indian Motorcycle Pvt. Ltd. on 15th July. Its name was changed to Indo Suzuki Motorcycles Pvt. Ltd. and it was converted into a public limited company on 12th January, 1984. It was promoted by Mr. N. Krishnan in collaboration with Suzuki Motor Co. Ltd. Japan; Sundaram-Clayton, Ltd., a member of the Company to the extent of Rs 70 lakhs. - The company entered into a technical know-how and assistance agreement with Suzuki Motor Co. Ltd., of Japan on 22nd September. As per the terms of the Collaboration, Suzuki agreed to furnish complete technical information and know-how, trade secrets and other data. - All shares taken up by promoters etc. 1984 - The company received a letter of intent for the manufacture of 20,000 spark ignition operated out board motors and 30,000 internal combustion spark ignition engines upto 500cc per annum. - 59,40,000 shares issued at par in 1984. 7,00,000 shares allotted to Sundaram Clayton, Ltd. Chennai, 70,000 shares allotted to Anusha Investments (P) Ltd. Chennai, 20,00,000 shares allotted to Suzuki Motor Co., Ltd., Japan; 2,20,000 shares allotted to employees and business associates and 29,70,000 shares offered to the public. 1985 - A new company "Lakshmi Auto Components Pvt Ltd." was incorporated for the manufacture of critical engines and transmission parts. 1986 - The company acquired the assets of the moped division from Sundaram Clayton Ltd. The cost of acquisition was met partly by rights issue of equity shares. The company subscribed to 39,20,000 equity shares of Rs.10 each of Lakshmi Auto Components Pvt Ltd, whereupon it became a subsidiary of the company.

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- The name of the company was changed from Indo Suzuki Motorcycles Ltd. to TVS Suzuki Ltd with effect from 18th August. - The technical aid agreement entered into with Suzuki Motor Co., Japan which expired in August 1991 was extended for three more years with the approval of the Government of India. 1992 - The Company launched two new models of motor cycles viz. `Sumurai' and `Shogun'. 1993 - The Company launched a new model of moped viz. `TVS Scooty'. 1995 - The Company was studying the feasibility of opening a second plant at a different location to meet the growth in demand for two wheelers in the near future. It also proposed to introduce upgraded version of mopeds. In addition, during the year, the Company undertook to develop new models of motorcycles. 1998 - TVS Suzuki Ltd, one of the leading two-wheeler manufacturers in the country, has crossed the Rs.1,000-crore turnover mark in 1997-98. - TVS will be the first company in the country to introduce the 4 stroke scooter in the Indian market. 2003 -TVS Motor Company has recorded a market share of 35% from motor cycles division -K.S.Bajpai has been appointed as an Additional Director on the Board. -TVS, Bajaj Auto and Yamaha have grabbed the market share from the country's largest motor cycle maker Hero Honda.
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-TVS Motor Company Ltd has introduced its own racing bikes which Team TVS will test on the tracks in Asian Circuit. - -TVS Motor Chairman and MD Venu Srinivasan has been selected in Business Week's Stars of Asia which covers the top 25 achievers in the continent. -TVS Motor Company adds two new models in two-wheeler segment. -TVS Motor ties up with State Bank of India for scooter and Motorcycle financing. -Launches Fiero F2 and Scooty Pep models -Board of approves the merger of engine components division of its subsidiary, Lakshmi Auto Components (LAC) with TVS Motors effective from April 2, 2003 2004 -TVS Motor , on Jan 5 launched Centra, a 100 cc four-stroke motor cycle, with variable timing intelligent (VTI) engines, claiming to give more mileage to consumers. The Centra has bundled price, style, power along with fuel efficiency making it a fill-once-a-month bike, and it's priced at Rs.36,990. nearly Rs 100 crore investment had gone into the launch of 'Centra', including R&D, plant and machinery. -TVS Vice President resigns -TVS Motors forges alliance with Andhra Bank -TVS picks up Asian Network for Quality award -TVS unveils new version of 'Victor GX' 2005 -TVS Motor Company introduced its entry-level 4-stroke motorcycle - TVS Star - in the Kerala market -TVS Motor Company launches TVS Centra VT-i, a variant of its four-stroke
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100cc model TVS Centra on May 6 -TVS Motor rolls out two motorcycle variants named Victor EDGE, StaR City and Scooty Pep plus 2009 - TVS Motor Company launched Scooty Streak, which is its latest scooterette targeted at girls of 16 to 20 age group. - Tvs Motor Company Limited has appointed Mr Prince Asirvatham as an additional and independent director of the board of directors of the company effective April 21, 2009. - TVS Motor Company entered the 110 cc segment by unveiling 2 brand new products, an auto-clutch motorcycle and an automatic scooter. 2010 - TVS Motor Company has launched India's first auto-clutch motorcycle- TVS Jive, in Chandigarh.

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2.2 THE TVS GROUP

Axles India Limited Axles India is promoted by Wheels India and Sundaram Finance, with technical support and equity participation from Dana Corporation, USA. Incorporated in 1982, the company provides axles for the entire range of medium and heavy commercial vehicles, including Pressed Axle Housings, Drive Axle Housings, Trailer Axle Beams, Hub Reduction Axle Housings and Drive Heads. The company has a manufacturing capacity of 180,000 Pressed Axle Housings annually. www.axlesindia.com

Brakes India Limited Brakes India was founded in 1962 as a joint venture between TV Sundram Iyengar & Sons and Lucas Industries, UK. The company manufactures braking equipment for automotive and non-automotive applications. Besides exporting products to 35 countries worldwide, Brakes India caters to over 60% of the domestic OEM market. Some of its manufacturing sites have been assessed at ISO 14001, ISO 9002, TS 16949 and QS 9000. The foundry division has received the prestigious Deming prize and award for TPM excellence. Sales turnover for the year 2004-05 was Rs 9,720 million (US$ 221 million). www.brakesindia.com

Delphi-TVS Diesel Systems Limited Delphi-TVS is a joint venture between Delphi Corporation, USA and T.V. Sundaram Iyengar & Sons, India. The company manufactures Diesel Fuel Injection Equipment for Cars, Sports Utility and Multi Utility Vehicles, Light Commercial Vehicles, Tractors, Single & Two Cylinder engines. Delphi-TVS
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believe that its success is based on the solid foundation of customer satisfaction, continuous innovation and total employee involvement. The company has a track record of sustained growth since it was set up. Delphi-TVS have obtained ISO/TS 16949 and ISO 14000 certifications. The company has now won the JIPM TPM Excellence Award (first category). To meet increasingly stringent emission norms, Delphi-TVS has upgraded its technology and introduced new products. Mechanical Rotary Technology has been upgraded to Electronic Rotary Technology and Delphi-TVS and has now introduced the state-of-the art-Common Rail Technology with full authority electronic controls. www.delphitvs.com

Harita TVS Technologies Limited Formed in 2001, Harita TVS provides Engineering Design Services to customers across US, Europe and India. With core competencies in Automotive, Industrial Machinery and Energy & Networking, it has become a preferred partner to many OEM and Tier-1 customers. The company offers end-to-end solutions for next generation products with its Mechanical Design Services (MDS) & Electronic Design Services (EDS). With a service portfolio covering the entire spectrum of a typical NPI (New Product Development) process, backed by strong engineering background of the TVS Group, Harita

India Japan Lighting Private Limited India Japan Lighting Pvt. Ltd. was incorporated in December 1996. It is a 50:50 joint venture between Lucas-TVS Limited, Chennai, and Koito Manufacturing Company Limited, Japan. The company manufactures headlamps, rear combination lamps and various other signal lamps for automotive applications. The headlamps and rear combination lamps are aerodynamically styled and represent the state-of-the-art technology. The Company has introduced state-ofthe-art clear plastic lens, multi-focal reflector headlamps with auto leveling
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mechanism and clear lens rear combination lamps. All products of IJL are designed to meet international levels of quality.

India Motor Parts and Accessories Limited India Motor Parts and Accessories Limited (IMPAL) was incorporated in 1954 to distribute automobile spare parts, accessories and garage equipment manufactured by General Motors, USA. Today, the company has a multibusiness portfolio that includes the distribution of indigenously manufactured components. It markets automobile components manufactured by the TVS Group, as well as other leading automobile ancillary manufacturers. IMPALs turnover in 2004-05 was Rs 2,130 million (US$ 48 million).

India Nippon Electricals Limited India Nippon Electricals limited was established in 1985 as a JV between Lucas Indian Service and Kokusan Denki Co. Limited, Japan. The company manufactures Electronic Ignition systems for two wheelers, three Wheelers and portable Gensets. Products for the future are designed and developed at its well equipped R&D Centre. The company has been accredited with ISO 14001 and is in the process of being assessed for TS16949 . Sales turnover for the year 2004-05 was Rs 1507 million. www.indianippon.com

Irizar TVS Limited Irizar TVS Limited is a joint venture between three equal partners, T V Sundram Iyengar & Sons Limited, Ashok Leyland Limited and Irizar S.Coop. of Spain. Incorporated in 2001, this company builds bus bodies for domestic and overseas customers and fabricates bus body kits. With technology from Irizar S.Coop., Spain, Irizar TVS has launched the Intercentury bus in the super luxury segment. The body design, features and quality all meet exacting
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European standards. Sales turnover for 2004-05 was Rs.210 million (US$ 4.8 million).

Lucas Indian Service Limited Lucas Indian Service Limited (LIS) was established in 1930 and is a sales and service company for auto electrical and fuel injection equipment. LIS is a fully owned subsidiary of Lucas-TVS Limited and markets auto components for the replacement market. Its preventive service product, Lucas Care, is designed to deliver a problem-free driving experience. LIS has a country-wide network of 2000 authorised sales and service dealers. Its manufacturing facility at Chennai makes ignition coils and switches. Turnover for 2004-05 was Rs 1,350 million (US$ 31 million).

Lucas-TVS Limited Lucas-TVS was established in 1961 as a joint venture between Lucas, UK and T V Sundram Iyengar & Sons, to manufacture automotive electrical systems. Today, the company is a leader in the auto electrical field 3 out of 4 vehicles in India are fitted with Lucas-TVS products. The company addresses segments across the auto industry, like passenger cars, jeeps, utility vehicles, light commercial vehicles, medium and heavy commercial vehicles, off-highway vehicles, industrial engines, earth movers, tractors and two / three wheelers. It also provides solutions for stationary and marine applications. Lucas-TVS is a TS 16949 and ISO 14001 certified company and has bagged the Deming application prize (2004) from the Japanese Union of Scientists and Engineers (JUSE). Turnover in 2004-05 was Rs 6,300 million (US$145 million). www.lucas-tvs.com

Southern Roadways Limited Southern Roadways was founded in 1946 as a road transport and parcel service company. Today, it runs a parcel service with a fleet of more than 300 trucks
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and covers 60,000 kms a day through Tamil Nadu, Karnataka, Andhra Pradesh, Kerala and Pondicherry.

Sundaram Brake Linings Limited Established in 1974, Sundaram Brake Linings (SBL) is a pioneer in the manufacture of asbestos-free friction material in India. Distinguished by its focus on cutting-edge technology, the company has a strong presence in the Indian OEM and aftermarket and exports to over 60 countries. SBL is a ISO / TS 16949 and ISO 14001 certified company. It is the first friction material manufacturer in the world to win the coveted Deming Application Prize for Total Quality Management. SBL is successfully positioned to meet the growing need for friction materials for the automotive industry.

Sundaram-Clayton Limited Sundaram-Clayton Limited (SCL) is a pioneering manufacturer of air brake systems. The market leader in this space, the company exports quality spare parts to over 15 countries. The SCL-Brakes division is the first Indian company to manufacture the next generation Anti-Lock Braking System (ABS) and AntiSpin Regulation (ASR), both of which have been developed with in-house design technology. It is also the first company in India and the fourth company outside Japan, to win the prestigious Deming Award. The companys Diecasting division has evolved from being a captive supplier to a full-service supplier of aluminium components to Indian and multinational companies.

Sundram Fasteners Limited Incorporated in1966, Sundram Fasteners Limited (SFL) is the largest manufacturer and exporter of high tensile fasteners in India. SFLs product range includes high tensile fasteners, powder metal parts, cold extruded parts, iron powder, radiator caps, gear shifters and automotive pumps / assemblies. Principal supplier of radiator caps to General Motors, USA, SFL has won the
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prestigious Supplier of the Year award from GM for five consecutive years. The automotive pumps and assemblies division is the principal supplier of rocker-level assemblies to Cummins, USA for ISX and ISM platforms. With facilities in Chennai, Madurai, Pondicherry, Hosur, Hyderabad and China, SFL was the first Indian company to get ISO 9000 certification. Today, all its divisions are ISO / TS 16949 and ISO 14001 certified. Turnover for 2004-05 was Rs 10,370 million (US$ 235 million). www.sundram.com

Rubber division TVS Rubber, the rubber division of SIL, manufactures moulded rubber products for vehicle manufacturers, system manufacturers and other industries, including defence, electrical, electronic, mining, thermal and white goods. TVS Rubber also serves the OEM and aftermarket in USA, Europe and other countries, on a JIT basis. It has a technical tie up with Bridgestone, Japan for the manufacture of Anti Vibration Mountings. It has achieved ISO / TS 16949: 2002 certification and received the TPM Excellence Award from JIPM, Japan in 2004. www.tvsrubber.com

Tyre solution division Since its foray into retreading in 1943, SIL has been the market leader with a complete spectrum of tyre care solutions. It has acquired unique technology to recycle rubber waste from Levgum, Israel. The company has won awards for the best retreads from the International Tire And Rubber Association, USA.

Sundaram Textiles Limited Sundaram Textiles was formed in 1960 to manufacture 100% cotton and synthetic yarn. It has two units: one in Tirunelveli District and another in Madurai. These units have 47000 spindles and 720 rotors.Currently, the
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company exports more than 50% of its production to countries in Europe, Middle East

Turbo Energy Limited Incorporated in 1982, Turbo Energy Limited (TEL) is a technical and financial joint venture between KKK Germany, (presently BorgWarner Turbo Systems BWTS), Brakes India Limited and Sundaram Finance Limited. TEL manufactures turbochargers for internal combustion engines. Its state-of-the art manufacturing facility has the capacity to manufacture, test and assemble 350,000 turbochargers per annum. TEL is a QS 9000 certified company and is under certification for TS 16949 : 2002. The companys exclusive R&D centre at Chennai has been recognised by the Department of Science and Technology, Govt. of India since 1985.

TVS Automotive Europe Limited TVS Automotive Europe Limited is a joint venture between TV Sundram Iyengar & Sons Limited and John Bruce UK Limited. The company is a single source for high quality automobile / engineering products for its OE / Tier 1 and 2 customers in UK and Europe. Products are sourced from QS / ISO certified suppliers located in India, China, Taiwan and Thailand.

TVS Auto Parts Private Limited TVS Auto Parts is a 65:35 joint venture between TVS Lanka and Worldwide Trade Agencies of Sri Lanka. The company distributes spare parts across the island nation and is also an indentor of parts for Indian made vehicles operating in Sri Lanka.
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ZF Electronics TVS (India) Private Limited ZF Electronics TVS (India) Private Limited (Formerly TVS Cherry Private Limited) is a joint venture between TVS Group, India and ZF Electronics Corporation, USA (a group company of ZF Friedrichshafen AG, Germany) to manufacture precision snap action switches, sensors and electromechanical assemblies in India.

TVS CJ Components Limited TVS CJ Components sources high quality automobile / engineering products from TS / QS / ISO certified suppliers located in India, Turkey and Italy for OE / Tier 1 and 2 customers in UK. It has a marketing office in UK and ISO 9001:2000 certified sourcing and back office operations in India. Customers include leading companies like CNH, Cummins, Perkins and Delphi.

TVS Electronics Limited TVS Electronics Limited (TVS-E) is a leading player in the information and communication technology market. Its mission is Taking IT to the Heart of India.

TVS Interconnect Systems Limited TVS Interconnect Systems Limited commenced operations in 2000 and offers optimised solutions to the telecommunications and enterprise networking industries. Supported by a manufacturing base at Madurai, the company has four broad divisions: wireless solutions, carrier solutions, enterprise solutions
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and project management services. TVS Interconnect combines best-in-class solutions and products from a wide variety of globally acclaimed partners.

TVS Lanka Private Limited TVS Lanka Private Limited is a 50:50 joint venture between TVS & Sons and United Motors Lanka Limited. Based in Colombo, TVS Lanka is the authorised distributor and dealer for the TVS range of two wheelers and has grown to become the second highest seller of two wheelers in Sri Lanka. It is supported by a network of approximately 500 dealers for sales, service and parts

TVS Logistics Iberia S.L. TVS Logistics Iberia (TVS LI) is a 51:49 joint venture between TVS Automotive Europe and Transcoma Group of Spain. The company sources high quality automobile / engineering products from TS / QS / ISO certified suppliers in India, China, Taiwan and Thailand for OE / Tier 1 and 2 customers in Spain.

TVS Logistics Services Limited TVS Logistics Services Limited provides comprehensive logistics solutions to the automotive industry. These include inbound logistics, outbound logistics, warehousing and value added services like line feeding, high sub-assemblies and SCM consultation.

TVS Logistics SIAM Limited TVS Logistics Siam Limited is a joint venture between Thai Martin Trading
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Company Limited, Thailand, Tyvin International Company Limited, Thailand and TVS. TVS brings to the table its rich domain expertise in supply chain management and will extend and apply this to the Thai auto industry.

TVS Sewing Needles Limited TVS Sewing Needles Limited was established in 1962 as a joint venture with The Singer Company, USA. The companys initial product range comprised just two types of needles manufactured with milled groove technology. Today, it has a licensed production capacity of 100 million needles of 45 different types (household and industrial grade), which are manufactured with die-press eye rounding technology.

TVS Srichakra Limited TVS Srichakra Limited is the largest auto ancillary group in India. The company is a leading manufacturer of automotive tyres and Indias premier twowheeler tyre manufacturer (7million tyres annually). It serves its loyal customer base through a 2050 strong dealer base and 20 warehouses in India. The company also exports to USA, Europe, Africa, South America and South East Asia. ISO 9001 and ISO 14001 certified, TVS Srichakra has a robust R&D, testing and manufacturing infrastructure.

Wheels India Limited Wheels India Limited was established in the early 60s, as a joint venture between TVS and Dunlop UK. It is a leading manufacturer of automotive wheels and supplies to all major vehicle manufacturers in the country. The company has a collaboration with Titan, the world leader in off-highway vehicle wheels. It produces wheels for all vehicle categories including passenger cars, utility vehicles, trucks, buses, agricultural tractors and construction equipment

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2.3 BRIDGESTONE TVS

2.3.1 BRIDGESTONE AGENCIES No.615, Rajkumar Road, Prakash Nagar, Bangalore 560 021 Established in 1987 Bridgestone Agencies is one of the 7 Main Deparship outlets out of the seven in Bangalore. A Main dealership deals with (i) Vehicle sales (ii) Spare sales (iii) Services (post sales) Distribute vehicle to 8 sub dealers in Bangalore Working hours Monday to Saturday 9 am to 6pm Sunday off Bridgestone Agencies employs around 60 employees on a daily basic. Receive vehicle from production plants in Mysore & Hosur 3-4 times a week depending upon the demand.

2.3.2 ORGANISATIONAL STRUCTURE :

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Proprietor ()Mr.Sharath Reddy

Administrator (Mr.Ravi)

Spares Incharge (Mr.Jayprakash)

Service Manager (Mr.Shivanandiah)

Pre-Delivery Inspection Manager

accounts Manager

Sales Manager (Mr.Murli)

Employees

Service Avisor (Mr.Guru)

Godown Incharge

Asistant Manager (Mrs.K.V.Shalini)

Supervisor (Mr.Manjunath)

Sales Executives

Employees

2.3.3 COMPANY PORTFOLIOS :

1. Spares Section It undertakes the sales of spare parts of the vehicles.

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2.

3. 4.

5. 6. 7.

8.

9.

10.

11.

12.

Sales section It is the main purpose the sales of the vehicles i.e., their product it includes giving information for agencies and follow up of the customer. Cash section Received of cash from the customers for the product/ service. Deliver section Deals with delivery of vehicles, it includes post sales feedback after 15 days of sales. Insurance section Deals with the insuring of the vehicle, this is optional for customers. R.T.O. Section This undertakes completion of all the registration and legal formalities. Company Accounts Deals with the preparation of the day to day accounts & the preparation of the balance sheet. Finance section This is the customer oriented finance i.e., the loan part of the sales. (Loan approvals & sanctions) A.S.C Authorized service center means Distribution of the vehicle to the sub dealer coming under the frame work of the main dealership. Service Section This involves with the post sales service. The sub- sections under this are (i) Billing (ii) Cash (iii) Delivery section (iv) Customer follow ups Exchange Section Exchange of vehicle to buy a new vehicle, the vehicle exchanged can be of any broad and will be volved at its market price. Stock (Godown) It has a well maintained stock of around 250-300 vehicles in stock all time.

2.3.4 SALES :
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 It starts from the time a customer enters the showroom and does an exit. His enquiries are attended by giving him all the information needed by him and till he is satisfied all his doubts are attended to and the sales executives make she they leave customers doubt closed. These are 2 possibilities of the response of the customer (i) He books a vehicle (ii) He is in a confused state of mind as to which vehicle to buy. If he books the vehicle he pays an booking amount of Rs.1,000/- and signs the duly field in forms and pays the rest of the amount as per his comport. If he is in doubt, the sales executives give him a PERFORMA INVOICE which is an estimate of the vehicle cost and also a purchase giving him details of the vehicle and also take the customers details and his preference so as to make a follow up on a future date.

2.3.5 PROCEDURE FOR LOAN APPROVAL : 1. Filling an application form 2. Loan approval by the finance company 3. Submitting the essential documents required for loan approval like (i) Address Proof (ii) Age Proof (iii) Bank statement (iv) Income certificate / PAN card photocopy (v) 5 passport size photographs (vi) Blank cheques
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4.

PAN Documents + 2 days to issue releasing order from financiers / banks. + 1 More day to deliver the vehicle. The customer who do not pay their installment are called as defaulters / duplicate customers

Formula used in loan calculations : Few formula used in the loan calculation EMI = (Loan Amount) x (Rate of Interest) x (No.of years) x (Loan amount) (No of months) D/P = (Loan Amount) x (Processing Fees) + (Advance EMI) + (Margin money) + (Charges) + (Stamping charges).

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CHAPTER 3 RESEARCH METHODOLOGY

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3.1 METHODOLOGY OF STUDY

1 Statement of research study comparative study of sales of two wheelers of various marker competitors. Objective of the research methodology To find out the maximum market stage acquired by each player in the market and also finding the maximum sales by each of them. Scope of research study - It would help the companies know where they stand in the market. - It would give them a slight hope for improvement and work better. 4. Statistical tools used for research Secondary date has been used for the research purpose the sores of secondary date are Websites Magazines Company annual reports Limitation The date used is secondary therefore is very close to the accurate values but not perfect.

2.

3.

(i) (ii) (iii) 5.

CHAPTER 4

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RESEARCH DESIGN

4.1 MARKET SHARE

Market share in 2007 Hero Honda 32 | P a g e Market share Market Share in in 2008 2009 42.4 38.5 36.1

TVS Bajaj

30.2 28.7

32.8 21.9

35.5 24.3

Table 4.1 ANALYSIS : *Hero Honda has 42.4% market share in 2007, 38.5% in 2008, 36.1% in 2009 *TVS has 30.2% market share in 2007, 32.8% in 2008, 35.5% in 2009 *Bjaj has 28.7% market share in 2007, 21.9% in 2008, 24.3% in 2009

45 40 35 30 25 20 15 10 5 0 Market share in 2007 Market share in 2008 Market Share in 2009 Hero Honda TVS Bajaj

Figure 4.1 INTERPRETATION

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*It is seen that hero Honda has been the undisputed market leader ,but its market share annually has been decreasing *TVS has a increasing market share annually , going on its path to success *Bajaj is not consistent in the market

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4.2 SALES
Sales in 2007 BAJAJ YAMAHA HERO HONDA TVS 28.7 14 42.4 11.3 Sales in 2008 21.9 13.6 38 13.5 Sales in 2009 24.3 15.9 36 17.3

Table 4.2 ANALYSIS : *Hero Honda has been having the highest sales in the year 2007, 2008, 2009 followed by bajaj *Bajaj made a sales of 28.7% in 2007, 21.9% in 2008, 24.3% in 2009 *Yamaha had a sales of 14% in 2007, 13.6% in 2008, 15.9% in 2009 *Hero Honda had a sales of 42.4% in 2007, 38% in 2008, 36% in 2009 *TVS had a sales of 11.3% in 2007, 13.5% in 2008< 17.3% in 2009

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45 40 35 30 25 20 15 10 5 0 BAJAJ YAMAHA HERO HONDA TVS Sales in 2007 Sales in 2008 Sales in 2009

Figure 4.2 INTERPRETATION :

*TVS sales increase annually where as others are not increasing annually

,therefore being inconsistent *The sum of annual sales of Yamaha & TVS is equal to annual sales to Hero Honda

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4.3 PERCENTAGE OF SCOOTERS

Northern Percentage of Scooters 46 Western 27.5 Southern 15.7

Table 4.3 ANALYSIS : *Northern region has 46% scooters of India *Southern region has 15.7% scooters of India *Western region has 27.5% scooters of India

Percentage of Scooters
50 45 40 35 30 25 20 15 10 5 0 Northern Western Southern

Percentage of Scooters

Figure 4.3 INTERPRETATION : * Northern region of India has the highest no. of scooters in India, followed by western & southern

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4.4 PERCENTAGE OF MOTORCYCLES

Western Percentage of Motorcycles 40 Southern 27.5 Northern 17.4

Table 4.4 ANALYSIS : *Weatern region has 40% motorcycles of India *Southern region has 27.5% motorcycles of india *Northern region has 17.4% motorcycles of India

Percentage of Motorcycles
45 40 35 30 25 20 15 10 5 0 Western Southern Northern Percentage of Motorcycles

Figure 4.4 INTERPRETATION : *Western regon of India has the highest number of motorcycles in India , followed by southern and northern

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CHAPTER 5 SUMMARY OF FINDINGS, SUGGESTIONS & CONCLUSIONS

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5.1 The industry The Indian two-wheeler industry is dominated by three players, Bajaj, Hero Honda and TVS Suzuki, who account for 80 percent of the total two-wheeler market. The other players including Kinetic Engineering, LML and others account for the remaining 20 percent of the market. The industry can be divided into three broad segments: Scooters, motorcycles and mopeds. In the scooters segment Bajaj is the market leader, Hero Honda is the market leader in the motorcycles segment and in the segment of mopeds, TVS controls the major chunk of the market. Indian automobile market, be it the two-wheeler segment, the three-wheeler segment or the car segment, is yet to come to a stage where all the models are developed indigenously. For years now, Indian companies have been dependent on their foreign joint venture partners or collaborators to provide them with the technical know-how. This trend too is in for a change. Leading the pack in this arena is Bajaj, which has been successful at designing models in-house. Bajaj's Saffire and Spirit, have been able to bag the scooter of the year award for 2001 and 2000 respectively. In fact, its Spirit was adjudged the "Indigenous product design of the year" for the year 2000. The recently launched Pulsar from the Bajaj stable is yet another home-grown product, albeit in tandem with Japanese design house, Tokyo R&D. Bajaj has been laying increased emphasis on its R&D so as to be able to launch new products to tap the markets at all possible price points. Other companies too are adapting the strategy of designing and developing products indigenously. TVS's Victor is yet another development in this direction and this indigenously built model has been a success in the markets.

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5.2 Traits of consumer durables In stark contrast to the situation that prevailed in the 1990s, the two-wheeler industry has now acquired the traits of any other consumer durables industry, of price wars, celebrity endorsements and ever-increasing sales and other promotional outgo. In the 1990s, the profit margin of the top companies was not subject to the kind of strain that is being witnessed in the recent quarters. The entry of more players into the fast-growing four-stroke motorcycle market has led to higher competitive pressure for the companies. Earlier, Hero Honda and Bajaj were the only producers of four-stroke motorcycles. Now, TVS Motor, Kinetic, LML along with Bajaj and Hero Honda are jostling for space in the four-stroke market. This has resulted in an increase in overall expenses, including promotional costs, for the companies. Apart from the capital expenditure, new product launches have an inflationary impact on expenses of a recurring nature, such as sales promotion and staff cost. The pressure on margins is not fully manifest owing to the cost control and indigenisation efforts undertaken by two-wheeler companies. Going forward, the constituents of the two-wheeler industry too would find profit margin being consistently under pressure once the scope for cost control diminishes. Growth in volume would the key driver of financial performance even as the scope for margin expansion wanes. 5.3 Tracking changes more difficult

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Though Bajaj and Honda Motorcycles have been successful, the task of assessing or anticipating swings and changes in consumer preferences may not be an easy task. This is borne out in the case of Hero Honda's CBZ and the fourstroke scooter venture of Bajaj and TVS Motor. While Pulsar turned out to be a huge hit for Bajaj, Hero Honda's CBZ (launched much ahead of Pulsar) failed despite possessing similar features. Similarly, both Bajaj and TVS Motor did not make any progress in their four-stroke scooter venture. But the latest entrant Honda Motorcycle has enjoyed a huge success in this segment through the Activa. The inherent difficulty in assessing and addressing the developments or changes in the industry would mean a higher degree of uncertainty to the earnings growth of two-wheeler companies. That the success or failure of even a single product can have a major influence on the earnings performance would aggravate the uncertainty problem. Along with these factors, Honda Motorcycle's decision to venture into the motorcycle market next year could compound the problems for companies such as Hero Honda, Bajaj and TVS Motor.

ANNEXURE

TVS

WEGO

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Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

4 stroke,single cylinder,air cooled 109.7 Rs.52600 40 45 kmpl 5 litres 108

APACHE RTR 180

Engine Displacement (CC) Price Mileage

4 stroke 177.4 Rs.79700 60 - 65

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Fuel Tank Capacity Kerb Weight (kgs)

16 litres 137

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SCOOTY PEP PLUS

Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

4 stroke,single cylinder,air cooled 87.8 Rs.41000 Rs.43100 45 50 kmpl 5 litres 95

SCOOTY STREAK

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Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

4 stroke,single cylinder,air cooled 87.8 Rs.43000 Rs.43600 45 50 kmpl 5 litres 95

FLAME

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Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

4 stroke 125 Rs. 57900 65 - 70 15 loiters 122

JIVE - TMATIC

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Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

4 stroke,single cylinder,air cooled 109.7 Rs.51100 55 -50 kmpl 15 litres 110

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STAR CITY

Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

4 stroke 109.7 Rs.48300 65 - 70 16 litres 95

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TVS XL SUPER

Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

2 stroke , single cylinder 69.9 Rs.27500 4 litres 66

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TVS XL SUPER HEAVY DUTY

Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

2 stroke , single cylinder 69.9 Rs.29200 4 litres 75

MAX 4R

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Engine Displacement (CC) Price Mileage Fuel Tank Capacity Kerb Weight (kgs)

4 stroke 100 Rs.44900 55-60 kmpl 13 litres 98

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BIBLIOGRAPHY

* www.moneycontrol.com * www.tvsmotors.com * www.bajaj.com * www.herohonda.com * autodrive- MONTHLY MAGAZINE * www.surfindia.com

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