Opportunity analysis in Automobile Industry

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Research Objective & Methodology

The main objective of the research is to have Opportunity analysis in Automobile
Industry and to arrive at certain fundamental conclusions regarding Opportunity
analysis in Automobile Industry.
The Objective of a Project Report is to provide a practical solution to a theoretical
perspective based on both literature review and case study method.

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CONTENTS

INTRODUCTION
Industry origin and growth
INDUSTRY ANALYSIS
Government rules and Regulations
SWOT Analysis
Industry present and future trends
Major firms in an industry
Firms or Company strategies
DESIGN OF THE STUDY
Objectives
Scope
Methods of data collection
Data analysis
Limitation of the study
DATA ANALYSIS
Data analysis & interpretation
SUMMARY
Findings
Suggestions
Conclusions
BIBLOGRAPHY

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PAGE NO.

CHAPTER-I

INTRODUCTION

Industry origin and growth;The two-wheeler industry in India has grown rapidly in the country since the
announcement of the process of liberalization in 1991 by the then finance minister
Dr. Manmohan Singh, now Prime Minister of India.
Previously, there were only a handful of two-wheeler models available in the
country. Currently, India is the second largest producer of two-wheelers in the
world. It stands next only to China and Japan in terms of the number of twowheelers produced and the sales of two-wheelers respectively. In the year 20052006, the annual production of two-wheelers in India stood at around 7600801
units.
The trend of owning two-wheelers is due to a variety of facts peculiar to India .
One of the chief factors is poor public transport in many parts of India .
Additionally, two-wheelers offer a great deal of convenience and mobility for the
Indian family.
Bajaj auto began trading in imported Vespa Scooters in 1948. Meanwhile
Automobile Products of India (API) commenced production of scooters in the
country in the early 50s. Until 1958, API and Enfield were the only producers of
two-wheelers in India. However, Bajaj signed a technical collaboration in 1960
with Piaggio of Italy to produce Bajaj Scooters. This deal expired in 1971.
The condition of motorcycle manufacturers was no different. Until the mid 80s,
there were only three major motorcycle manufacturers in India namely Rajdoot,
Escorts, and Enfield . The two-wheeler market was opened to foreign
manufacturers in the mid 80s. The industry, which had seen a smooth ride before,
faced fierce foreign competition.
Motorcycle companies like the Yamaha, Honda, and Kawasaki , set up shop in
India in collaboration with various Indian two-wheeler companies. Companies
like Escorts, Rajdoot and faced immense competition from smaller 100 cc

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Japanese technology motorbikes. Bikes manufactured by Hero Honda, the only

company manufacturing four-stroke bikes at that time, gained massive popularity.
In the mid 80s, Kinetic introduced a variomatic gearless scooter in collaboration
with Honda. This scooter became instantly popular with the younger generation,
especially people who found it difficult to use geared scooters. The introduction
of scooterettes created another segment for people such as women and teenagers
who could not get used to driving either motorcycles or gearless scooters. Many
companies such as Kinetc, TVS, and Hero also started manufacturing mopeds that
proved immensely popular with people who wanted a simple riding machine.
The change in the governments policy owning to pollution control norms and the
Kyoto agreement saw the phasing out of two stroke two-wheelers from
production. Currently there are around 10 two-wheeler manufacturers in the
country, they being Bajaj, Hero, Hero Honda, Honda, Indus , Kinetic, Royal
Enfield, Suzuki, TVS, and Yamaha.
The latest trend in the two-wheeler market is the introduction of electrically
operated vehicles from a range of manufacturers such as Indus and Hero. These
can be recharged from convenient household electrical points. The only
disadvantage is speed, which is restricted to around 25 miles per hour.
Currently, the motorcycle market is witnessing a demand for higher volume
engines. Previously, the 100 c bikes were very popular owning to the high fuel
efficiency offered. However, the market is maturing fast. Sensing this movement,
Bajaj has introduced the Bajaj Pulsar, with 150, 180 and 200 cc engines with Dual
Twin Spark Ignition (DTSi) technology.
The Two-wheeler industry in India has grown rapidly in the country
since the announcement of the process of liberalization in 1991 by the then
finance minister Dr. Manmohan Singh, now Prime Minister of India.
Previously, there were only a handful of two-wheeler models available in the
country. Currently, India is the second largest producer of two-wheelers in the
world. It stands next only to China and Japan in terms of the number of twowheelers produced and the sales of two-wheelers respectively. In the year 20052006, the annual production of two-wheelers in India stood at around 7600801
units.

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

One of the chief factors is poor public transport in many parts of India .
Additionally, two-wheelers offer a great deal of convenience and mobility for the
Indian family.
Bajaj auto began trading in imported Vespa Scooters in 1948. Meanwhile
Automobile Products of India (API) commenced production of scooters in the
country in the early 50s. Until 1958, API and Enfield were the only producers of
two-wheelers in India. However, Bajaj signed a technical collaboration in 1960
with Piaggio of Italy to produce Bajaj Scooters. This deal expired in 1971
The condition of motorcycle manufacturers was no different. Until the mid 80s,
there were only three major motorcycle manufacturers in India namely Rajdoot,
Escorts, and Enfield . The two-wheeler market was opened to foreign
manufacturers in the mid 80s. The industry, which had seen a smooth ride before,
faced fierce foreign competition.
Motorcycle companies like the Yamaha, Honda, and Kawasaki , set up shop in
India in collaboration with various Indian two-wheeler companies. Companies
like Escorts, Rajdoot and faced immense competition from smaller 100 cc
Japanese technology motorbikes. Bikes manufactured by Hero Honda, the only
company manufacturing four-stroke bikes at that time, gained massive popularity.
In the mid 80s, Kinetic introduced a variomatic gearless scooter in collaboration
with Honda. This scooter became instantly popular with the younger generation,
especially people who found it difficult to use geared scooters. The introduction
of scooterettes created another segment for people such as women and teenagers
who could not get used to driving either motorcycles or gearless scooters. Many
companies such as Kinetc, TVS, and Hero also started manufacturing mopeds that
proved immensely popular with people who wanted a simple riding machine.
The change in the governments policy owning to pollution control norms and the
Kyoto agreement saw the phasing out of two stroke two-wheelers from
production. Currently there are around 10 two-wheeler manufacturers in the
country, they being Bajaj, Hero, Hero Honda, Honda, Indus , Kinetic, Royal
Enfield, Suzuki, TVS, and Yamaha.
The latest trend in the two-wheeler market is the introduction of electrically
operated vehicles from a range of manufacturers such as Indus and Hero. These
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can be recharged from convenient household electrical points. The only

disadvantage is speed, which is restricted to around 25 miles per hour.
Currently, the motorcycle market is witnessing a demand for higher volume
engines. Previously, the 100 c bikes were very popular owning to the high fuel
efficiency offered. However, the market is maturing fast. Sensing this movement,
Bajaj has introduced the Bajaj Pulsar, with 150, 180 and 200 cc engines with Dual
Twin Spark Ignition (DTSi) technology.

Growth
Credit Analysis and Research (CARE Ratings) says that the rural India will be the
next growth frontier for the Indian two wheeler industry.
Domestic two-wheeler sales have grown to around 11.3 million by financial year
2014 from 7.4 million in financial year 2009 is also projected by the credit rating
agencys research arm.
The two-wheeler penetration in rural area is at 211 per thousand, as compared
with 644 per thousand in urban areas. That leaves plenty of scope for two-wheeler
companies such as Hero Honda, Bajaj Auto, TVS and Honda Motorcycle and
Scooter India to expand their footprint there, says the deputy managing director
of CARE Ratings, D R Dogra.
In the FY09 a modest annual growth of 2.6% is seen by the domestic twowheeler industry. Even though a very depressive monsoon is foreseen, still the
sales are expected to grow at a faster rate by industry this year as the financing
availability is expected to become easier. Revati Kasture, head, CARE Research
says that, Two-wheeler sales are forecast to grow by 6.7 per cent in 2009-10 to
7.9 million units from 7.4 million in 2008-09.
Positive factors such as the excise duty cut, lower fuel prices and lower interest
rates and easing liquidity situation have helped the two-wheeler companies to
improve their sales in urban and rural areas in the present financial year.
In this background, given already high penetration in urban markets, rural India
offers big opportunity to the industry.
The rating agencys study also reveals that the growing numbers of working
women have also gradually emerged as a large consumer segment, especially for
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gearless scooterettes. Around 30 per cent of the women in India are earning an
independent income, as against 22 per cent in 1990-91 is estimated by CARE.
The report says, with the women also joining the workforce, the disposable
income of households increased. Better affordability is thus playing a key role in
boosting two-wheeler demand.
Kasture said, Rural customers look for sturdiness and high mileage as critical
factors that influence their buying decision. Therefore, motorcycles with engine
capacity of 75-125 cc have a high demand in these markets.

History
The Britannica Encyclopaedia describes a motorcycle as a bicycle or tricycle
propelled by an internal-combustion engine (or, less often, by an electric engine).
The motors on minibikes, scooters, and mopeds, or motorized velocipedes, are
usually air-cooled and range from 25 to 250 cubic cm (1.5 to 15 cubic inches) in
displacement; the multiple-cylinder motorcycles have displacements of more than
1,300 cubic cm.
The automobile was the reply to the 19th-century dream of self-propelling the
horse-drawn carriage. Similarly, the invention of the motorcycle created the selfpropelled bicycle. The first commercial design was a three-wheeler built by
Edward Butler in Great Britain in 1884. This employed a horizontal singlecylinder gasoline engine mounted between two steerable front wheels and
connected by a drive chain to the rear wheel.The 1900s saw the conversion of
many bicycles, or pedal cycles by adding small, centrally mounted spark ignition
engines. There was then felt the need for reliable constructions. This led to road
trial tests and competition between manufacturers. Tourist Trophy (TT) races
were held on the Isle of Man in 1907 as reliability or endurance races. Such were
the proving ground for many new ideas from early two-stroke-cycle designs to
supercharged, multivalve engines mounted on aerodynamic, carbon-fibre
reinforced bodywork.

Origin of Motor-Scooters:Edward Butler, an Englishman, built the first motor tricycle in 1884. The first
gasoline-engine motorcycle to appear publicly was built by Gottlieb Daimler, of
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Bad Cannstatt, Germany, in 1885. The first practical engines and motorcycles
were designed by the French and Belgians, followed by British, German, Italian,
and American makers.
The popularity of the vehicle grew, especially after 1910. During World War I the
motorcycle was used by all branches of the armed forces in Europe, principally
for dispatching. After the war it enjoyed a sport vogue until the Great Depression
began in 1929. After World War II a revival of interest in motorcycles lasted into
the late 20th century, with the vehicle being used for high-speed touring and sport
competitions.
The practice of attaching auxiliary engines to bicycles in western Europe and
parts of the United States led to the development during the 1950s of a new type
of light motorcycle, the moped. Originating in Germany as a 50-cubic-centimetre
machine with simple controls and low initial cost, it was largely free of licensing
and insurance regulations except in Great Britain.
The more sophisticated motor scooter originated in Italy soon after World War II,
led by manufacture of a 125-cubic-centimetre model. Despite strong competition
from West Germany, France, Austria, and Britain, the Italian scooters maintained
the lead in the diminishing market. The scooter has small wheels from 20 to 36
cm (8 to 14 inches) in diameter, and the rider sits inside the frame. Power units
are placed low and close to the rear wheel, which is driven by bevel gearing or
chain. Capacities vary from 50 to 225 cubic cm, and four-speed gearing is
common.

History of E-Bikes:The concept of E-bike is not new. A workable prototype was first produced in
America as barley as 1834 till the late 1890s; E-bikes were considered to be the
future. EV in India launch by EKO vehicles private limited in 1983 by the name
of product VIDUT 24. it was a technical success but it was failed because of
manufacturing system was not perfected and since the sales volumes were low,
retail prices could not be brought down.

E-bikes Market:-

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In 2008-09 more then 11 millions two wheelers were sold in country. Of these,
7.81 millions were motorcycles or step-thoughts, 11.08 lakh were largely
scooterettes and another 5.32 lakh were mopeds. A bare 70,000 were electric two
wheelers. By the end of this financial year in March, two wheeler sales will surge
past the 8 million mark, and EV sales should be 3 lakh vehicles in India the years.

Overview:Electric vehicles are virtually maintenance free. It has no gears, no engine, no belt
or chain drive, zero emission, no pollution, electronic start and accelerator,
besides it is exempted from the Central Vehicles registration act by the
Automotive Research Association of India (ARAI) and does not require any
registration or license. These bikes are usually chargeable at 220V which your
refrigerator requires. For charging bikes require special adapter. Batteries, Motors
and other electrical kits are imported from china and other countries whereas
mechanical design and assembly of these bikes are done here. Electric bikes target
School students, women and who are under 18 years of age. Following is the
review on some of the manufacturers and their products in India.

Yo Bykes:
Indus - division of Electrotherm a gujrat based company is the recent player in
electric vehicle market. It offers two scooterette and four bikes models with the
motor power range 200-250W. YO-smart scooter model from Indus come with a
very compact dimension. The vehicle weighs less and has a payload of 75kg. YOsmart vehicle clocks a top speed of 25km/hr and the vehicle offers a range/charge
mileage of 75km. Charge duration required is 6 8hours. Electrotherms
YOBikes are ranged between Rs 13,999 and Rs 23,249.

EKO vehicle:EKO vehicle a Bangalore based company offers EKO cosmic I scooter and EGO
bike. This company has been in this business for a long time and has dealers in
various locations in India than its counterparts. Battery weighs at 28kgs and has a
life of 12000 15000kms. The company offers a rapid charger which will charge
the bike at 10 15 minutes (good for intuitional consumers). Cosmic offers a
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variable mileage depends on your payload. The maximum speed is 40 km/hr and
Cosmic noise is less than 60decibel. Cosmic is offered in five colours and is
exported many countries.

Hero/ultra motors:Hero cycles (Hero Honda group) - UK Ultra Motor Group will launch
electric three wheeler by the end of fiscal 2007. Hero - Ultra also has plans to tap
the nascent electric vehicle market in a big way. Hero - Ultra plans to sell 1lakh
electric vehicles by 2008. They have launched Indias first exclusive electric
vehicle showroom in New Delhi. By April 2007 they also plan to establish 15
more dealership in North India. Investment for a dealership requires 15-20 lakhs.
Currently Hero - Ultra offers E-Bikes in the range of 14500 - 19000 and EScooters in the range of 22500 - 28000.

Chinas Shenzhen Zhongmo Technology Co Ltd:In West Bengal Battery-operated bikes to flood soon, It will get from
kolkata, Burdwan, Durgapur & etc. Bengal Enamel Works Ltd. with a venture in
the automobile sector with Chinas Shenzhen Zhongmo Technology Co Ltd to
launch light battery-operated two-wheelers developed by Benlin Electric Cycles
Company of Japan.
This e-bikes has all total 43 models now starts with 8 Models. These new gearless
bikes should be able to travel 45 km to 100 km on a single charge. Being below
250 watt, it will have a top speed of 25 km/h. it requires no registration, driving
neither license nor payment of road taxes. BENLIN E-bikes starts with 8 Models
priced at Rs. 18600/- to Rs. 45200/-(it has with disk break)

ACE motors:Pune based Ace motors manufacturers e-bike (electric bike) and the majority of
the components of this bike are imported from China based company Changtong
E Bike Company Ltd. The e-bikes from Ace Motors weigh almost 60kg. The bike
offers a load-carrying capacity of 100-140 kg. To cover a distance of 220 km, you
need to charge the bike for 6 - 8 hours at 220 volts. The maximum speed of the
bike is 25 km/hr and is priced at Rs 26,500.
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Verdict:It is estimated that Indias fossil fuel dependency on other countries currently
from 70% to 82% in 2012. If we can have three lakh Electric Vehicles on the
roads by 2020, including three-wheelers, cars, and scooters, this could result in a
reduction of over 16 lakh metric tons of CO, NOx and HC by 2020, savings of
over Rs 3,700 crore in foreign exchange and significant health costs savingsautomonitorGovernment has reduced the custom duty on three of the imported
components in battery operated vehicles (BOV) to 10%.Excise duty reduced on
electric vehicles from 16% to 8% in 2004 budget. But the industry feels that the
efforts are not sufficient.

Toyota Prius the model which accounts for nearly 80 per cent of the hybrid
vehicle sold globally is about Rs 10 lakh in the US. In India at current levels of
duty, it could cost anywhere between Rs 20-25 lakh because of the high import
duty. At present total import duty is 111% (60% on CBU imports plus
countervailing duties and other levies).
According to A Toyoshima, managing director, Toyota Kirloskar, the Indian
government should relax the duty structure for such hybrid vehicles to promote
eco-friendly technology in the country. Honda said that the new small car it plans
to offer in 2009 would be a hybrid if the government makes required tax sops. If
government wishes a greener future it has to take necessary actions to encourage
the industry, if you want to save the earth buy an e-vehicle.

About Indus: Indus Elec-trans, a division of Electrotherm (ET), is formed to

manufacture electric vehicles and hybrid electric vehicles. Its vision is to offer an
efficient, economical and eco friendly future to the Indian transportation. This
new Auto division will cater to the common man's need for both individual and
mass transportation. Fuelled by Innovation, INDUS will strive to provide the
futuristic driving solutions through unconventional, environment friendly,
innovative yet reliable technology and enduring products.
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Based upon innovative, novel ideas and best quality practices, INDUS will bring a
revolutionary change in Indian Automobile Market. The expertise in power
electronics and electrical technology has lead ET into this motoring venture. ETs
excellent practices for customer care will continue to be the backbone. However,
the biggest strength lies in the visionary people who have given ET the
international repute for the futuristic products.
Currently INDUS has commenced manufacture of hi-tech electric two wheelers,
YObykes at the state-of-the-art plant at Kutch in Gujarat. Development of Electric
three wheelers, four wheelers and hybrid electric low floor buses are on anvil for
future.

INDUSTRY ANALYSIS

Government Policies Towards Indian Automobile Industry

Automobile industry in India also received an unintended boost from stringent

government auto
emission regulations over the past few years. This ensured
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that vehicles produced in India conformed to the standards of the developed

world.
Though it has an advantage in India, thanks to low costs and government policies
it soon faces stiff competition from it multinational competitors all eyeing for a
share in the ever growing Indian auto sector. The policies adopted by Government
will increase competition in domestic market, motivate many foreign commercial
vehicle manufactures to set up shops in India, whom will make India as a
production hub and export to nearest market.

Bring in a minimum foreign equity of US $ 50 Million if a joint venture

involved majority foreign equity ownership
Automatic approval for foreign equity investment upto 100% of
manufacture of automobiles and component is permitted

FIIs including overseas corporate bodies (OCBs) and NRIs are permitted
to invest up to 49 per cent of the paid-up equity capital of the investee
company, subject to approval of the board of directors and of the members
by way of a special resolution. .

Investments in making auto parts by a foreign vehicle maker will also be

considered a part of the minimum foreign investment made by it in an
auto-making subsidiary in India. The move is aimed at helping India
emerge as a hub for global manufacturing and sourcing for auto parts.
Specific component of excise duty applicable to large cars and utility
vehicles will be reduced to 15,000 rupees per vehicle from 20,000 rupees
earlier.
The Proposal by the Govt. to set up an expert group to advise on a viable
and sustainable system of pricing petroleum products, as this will surely
had an impact on the Automobile Industry.
The announced reduction on the basic customs on bio-diesel is great news
for all companies working on environmental saving technologies.

Rules and Regulations for Importing Bikes in India :Bike enthusiasts from different corners of India have been importing highperformance bikes to satiate their zeal for high-speed biking. Notwithstanding

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their astronomical price tags, these cult machines do have a fair number of
admirers in India.
Post Dhoom, the Bollywood potboiler which featured John Abraham in a Suzuki
Hayabusa, this small community of high-power bike aficionados is growing with
every passing day. To import a brand new bike, one will have to pay 105 percent
duty and 100 percent on a used one. The Exim Policy 2001 lifted quantitative
restrictions on the import of second-hand vehicles.
The import of vehicles shall be subject to the following guidelines of the
Government of India:
1 (I) A new imported vehicle shall mean a vehicle that: Has not been manufactured/assembled in India; and
Has not been sold, leased or loaned prior to importation into India; or
Has not been registered for use in any country according to the laws of that
country, prior to importation into India.
1. (II) The import of new vehicles shall be subject to the following conditions:
The new vehicle shallHave a speedometer indicating the speed in km / h;
Have right hand steering, and controls (applicable on vehicles other than two and
three wheelers);
Have photometry of the headlamps to suit "keep-left" traffic; and
Be imported from the country of manufacture.
(b) In addition, the new vehicle shall conform to the provisions of the Motor
Vehicles Act, 1988 and the rules made there under, as applicable, on the date of
import.
(c) The import of new vehicles shall be permitted only through the Customs port
at Nhava Sheva (Mumbai), Calcutta and Chennai.
2. (I) A second hand or used vehicle shall mean a vehicle that :Has been sold, leased or loaned prior to importation into India; or
Has been registered for use in any country according to the laws of that country,
prior to importation into India;
2. (II). The import of second had or used vehicles shall be subject to the following
conditions:The second hand or used vehicle shall not be older than three years from the date
of manufacture;
The second hand or used vehicle shall:
Have right hand steering, and controls (applicable on vehicles other than two and
three wheelers);
Have a speedometer indicating the speed km / h; and
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Have photometry of the headlamps to suit "keep left" traffic.

In addition, the second hand or used vehicle shall conform to the provisions of the
Motor Vehicle Act, 1988 and the rules made there under, as applicable, on the
date of import.
Import of second hand vehicles shall be allowed only through the customs port at
Mumbai.
The second hand or used vehicles imported into India should have a minimum
roadworthiness for a period of 5 years from the date of importation into India with
assurance for providing service facilities within the country during the five year
period. For this purpose, the importer shall, at the time of importation, submit a
declaration indicating the period of roadworthiness in respect of every individual
vehicle being imported, supported by a certificate issued by any of the testing
agencies, which the Central Government may notify in this regard.
The vehicle has to be submitted for testing to Vehicle Research and Development
Establishment (VRDE), Ahmednagar, of the Ministry of Defence or the
Automotive Research Association of India, Pune or the Central Farm and
Machinery Training and Testing Institute, Budni, Madhya Pradesh, and such other
agencies as may be specified by the Central Government, for granting a certificate
by that agency as to the compliance of the provisions of the Motor Vehicles Act,
1988 and any rules made there under.

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SWOT Analysis
A scan of the internal and external environment is an important part of the
strategic planning process. Environmental factors internal to the firm usually can
be classified as strengths (S) or weaknesses (W), and those external to the firm
can be classified as opportunities (O) or threats (T). Such an analysis of the
strategic environment is referred to as a SWOT analysis. SWOT analysis of the
Indian automobile sector gives the following points:

Strengths:

Large domestic market

Sustainable labor cost advantage
Competitive auto component vendor base
Government incentives for manufacturing plants
Strong engineering skills in design etc

Weaknesses:

Low labor productivity

High interest costs and high overheads make the production uncompetitive
Various forms of taxes push up the cost of production
Low investment in Research and Development
Infrastructure bottleneck

Opportunities:

Commercial vehicles: SC ban on overloading

Heavy thrust on mining and construction activity
Increase in the income level
Cut in excise duties
Rising rural demand

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Threats:

Rising input costs

Rising interest rates
Cut throat competition

Industry present and future trends:Automobile is one of the largest industries in global market. Being the leader in
product and process technologies in the manufacturing sector, it has been recognised
as one of the drivers of economic growth. During the last decade, well-directed
efforts have been made to provide a new look to the automobile policy for realising
the sector's full potential for the economy. Steps like abolition of licensing, removal
of quantitative restrictions and initiatives to bring the policy framework in
consonance with WTO requirements have set the industry in a progressive track.
Removal of the restrictive environment has helped restructuring, and enabled industry
to absorb new technologies, aligning itself with the global development and also to
realise its potential in the country. The liberalisation policies have led to continuous
increase in competition which has ultimately resulted in modernisation in line with
the global standards as well as in substantial cut in prices. Aggressive marketing by
the auto finance companies have also played a significant role in boosting automobile
demand, especially from the population in the middle income group.

Evolution of Two-wheeler Industry in India:Two-wheeler segment is one of the most important components of the automobile sector
that has undergone significant changes due to shift in policy environment. The twowheeler industry has been in existence in the country since 1955. It consists of three
segments viz. scooters, motorcycles and mopeds. According to the figures published by
SIAM, the share of two-wheelers in automobile sector in terms of units sold was about 80
per cent during 2003-04. This high figure itself is suggestive of the importance of the
sector. In the initial years, entry of firms, capacity expansion, choice of products
including capacity mix and technology, all critical areas of functioning of an industry,
were effectively controlled by the State machinery. The lapses in the system had invited
fresh policy options that came into being in late sixties. Amongst these policies,
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Monopolies and Restrictive Trade Practices (MRTP) and Foreign Exchange Regulation
Act (FERA) were aimed at regulating monopoly and foreign investment respectively.
This controlling mechanism over the industry resulted in: (a) several firms operating
below minimum scale of efficiency; (b) under-utilisation of capacity; and (c) usage of
outdated technology. Recognition of the damaging effects of licensing and fettering
policies led to initiation of reforms, which ultimately took a more prominent shape with
the introduction of the New Economic Policy (NEP) in 1985.
However, the major set of reforms was launched in the year 1991 in response to the
major macroeconomic crisis faced by the economy. The industrial policies shifted from a
regime of regulation and tight control to a more liberalised and competitive era. Two
major results of policy changes during these years in two-wheeler industry were that the,
weaker players died out giving way to the new entrants and superior products and a
sizeable increase in number of brands entered the market that compelled the firms to
compete on the basis of product attributes. Finally, the two-wheeler industry in the
country has been able to witness a proliferation of brands with introduction of new
technology as well as increase in number of players. However, with various policy
measures undertaken in order to increase the competition, though the degree of
concentration has been lessened over time, deregulation of the industry has not really
resulted in higher level of competition.

A Growth Perspective:The composition of the two-wheeler industry has witnessed sea changes in the postreform period. In 1991, the share of scooters was about 50 per cent of the total 2-wheeler
demand in the Indian market. Motorcycle and moped had been experiencing almost equal
level of shares in the total number of two-wheelers. In 2003-04, the share of motorcycles
increased to 78 per cent of the total two-wheelers while the shares of scooters and
mopeds declined to the level of 16 and 6 per cent respectively. A clear picture of the
motorcycle segment's gaining importance during this period is exhibited by the Figures 1,
2 and 3 depicting total sales, share and annual growth during the period 1993-94 through
2003-04.
National Council of Applied Economic Research (NCAER) had forecast twowheeler demand during the period 2002-03 through 2011-12. The forecasts had been
made using econometric technique along with inputs obtained from a primary survey
conducted at 14 prime cities in the country. Estimations were based on Panel Regression,
which takes into account both time series and cross section variation in data. A panel data
of 16 major states over a period of 5 years ending 1999 was used for the estimation of
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parameters. The models considered a large number of macro-economic, demographic and

socio-economic variables to arrive at the best estimations for different two-wheeler
segments. The projections have been made at all India and regional levels. Different
scenarios have been presented based on different assumptions regarding the demand
drivers of the two-wheeler industry. The most likely scenario assumed annual growth rate
of Gross Domestic Product (GDP) to be 5.5 per cent during 2002-03 and was
anticipated to increase gradually to 6.5 per cent during 2011-12. The all-India and
region-wise projected growth trends for the motorcycles and scooters are presented in
Table 1. The demand for mopeds is not presented in this analysis due to its already
shrinking status compared to' motorcycles and scooters.
It is important to remember that the above-mentioned forecast presents a longterm growth for a period of 10 years. The high growth rate in motorcycle segment at
present will stabilise after a certain point beyond which a condition of equilibrium will
set the growth path. Another important thing to keep in mind while interpreting these
growth rates is that the forecast could consider the trend till 1999 and the model could not
capture the recent developments that have taken place in last few years. However, this
will not alter the regional distribution to a significant extent.
Table 1 suggests two important dimensions for the two-wheeler industry. The regionwise numbers of motorcycle and scooter suggest the future market for these segments. At
the all India level, the demand for motorcycles will be almost 10 times of that of the
scooters. The same in the western region will be almost 20 times. It is also evident from
the table that motorcycle will find its major market in the western region of the country,
which will account for more than 40 per cent of its total demand. The south and the
north-central region will follow this. The demand for scooters will be the maximum in
the northern region, which will account for more than 50 per cent of the demand for
scooters in 2011-12.
-------------------------------------------------------------Source: Indian Automobile Industry: Optimism in the Air, Industry Insight,
NCAER
The present economic situation of the country makes the scenario brighter for short-term
demand. Real GDP growth was at a high level of 7.4 per cent during the first quarter of
2004. Both industry and the service sectors have shown high growth during this period at
the rates of 8.0 and 9.5 per cent respectively. However, poor rainfall last year will pull
down the GDP growth to some extent. Taking into account all these factors along with
other leading indicators including government spending, foreign investment, inflation and
20 | P a g e

export growth, NCAER has projected an average growth of GDP at 6.7 per cent during
the tenth five-year plan. Its mid-term forecast suggests an expected growth of 7.4 per cent
in GDP during 2004-05 to 2008-09. Very recently, IMF has portrayed a sustained global
recovery in World Economic Outlook. A significant shift has also been observed in
Indian households from the lower income group to the middle income group in recent
years. The finance companies are also more aggressive in their marketing compared to
previous years. Combining all these factors, one may visualise a higher growth rate in
two-wheeler demand than presented in Table 1, particularly for the motorcycle segment.
There is a large untapped market in semi-urban and rural areas of the country. Any
strategic planning for the two-wheeler industry needs to identify these markets with the
help of available statistical techniques. Potential markets can be identified as well as
prioritised using these techniques with the help of secondary data on socio-economic
parameters. For the two-wheeler industry, it is also important to identify the target groups
for various categories of motorcycles and scooters. With the formal introduction of
secondhand car market by the reputed car manufacturers and easy loan availability for
new as well as used cars, the two-wheeler industry needs to upgrade its market
information system to capture the new market and to maintain its already existing
markets. Availability of easy credit for two-wheelers in rural and smaller urban areas also
requires more focussed attention. It is also imperative to initiate measures to make the
presence of Indian two-wheeler industry felt in the global market. Adequate incentives
for promoting exports and setting up of institutional mechanism such as Automobile
Export Promotion Council would be of great help for further surge in demand for the
Indian two-wheeler industry.

Major firms in an industry:Major players in the two wheeler automobile sector (India):

Hero Honda motors ltd.

Bajaj auto ltd.
TVS motors company ltd.
Yamaha motors India
Honda motorcycle and scooters India
Royal Enfield
Suzuki Motors
LML

21 | P a g e

Basic Data of Sector:Broad product range

Over the last decade, the two wheeler automobile sector has successfully
changed its image. Its product range encompasses Scooterettes, Scooters and
Motorcycles. The main product ranges of two wheeler automobile sector are as
follows:
Scooters
Motorcycles
Scooterettes

Hero Honda Motors Limited:Hero Honda Motors Limited was established in 1984, as a joint venture between
India's Hero Group (world's largest bicycle manufacturers) and Japan's Honda
Motor Company. In 1985 production began with the launch of its first motorcycle,
the CD100, which gave 80 km to the liter. In 1987 the engine plant was started
and in 1989 the Company produced its 3,00,000th motorcycle. In 2001 Hero
Honda manufactured its 50,00,000th motorbike. Hero Honda has a reputation of
being the most fuel-efficient and the world's single largest two wheeler Company.
Shri Brijmohan Lall Munjal is the chairman and managing director of this
Company.
As early as in 1960s very few Indian bicycle manufacturers were interested in
exports. However, the hero groups foray into the overseas markets in 1963
pioneered Indian exports in the bicycle segment. It was more prompted essentially
by the need to remain attuned to the global marketplace. While initial exports
were restricted to Africa and the middle east, today more than 50% of the exports
from Hero Cycles Ltd. Meet the demands of sophisticated markets in Europe and
America. This is primarily because of appropriate product development and
excellent quality that hero offers..
22 | P a g e

Hero Honda has grown like no other company in the auto business. Several times
in the path, savvy observers have insisted that it has grown just too big and that no
company its size can continue to show growth rates. But Hero Honda has ignored
that opinion and continued growing at the place it has set many years ago.
Hero Honda today faces more competitor than it has ever in the history. Now that
is the undisputed two wheeler Numero Uno in the country. Every single two
wheeler manufacturer in India if looking market share away from it. More over
for the first time there are so many four- stroke challengers in the market. And
Hero Hondas best selling products are ageing.

Corporate Profile:The joint venture between India's Hero Group and Honda Motor Company, Japan
has not only created the world's single largest two wheeler company but also one
of the most successful joint ventures worldwide.
During the 80s, Hero Honda became the first company in India to prove that it
was possible to drive a vehicle without polluting the roads. The company
introduced new generation motorcycles that set industry benchmarks for fuel thrift
and low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the
imagination of commuters across India, and Hero Honda sold millions of bikes
purely on the commitment of increased mileage
Over 19 million Hero Honda two wheelers tread Indian roads today. These are
almost as many as the number of people in Finland, Ireland and Sweden put
together!
Hero Honda has consistently grown at double digits since inception; and today,
every second motorcycle sold in the country is a Hero Honda. Every 30 seconds,
someone in India buys Hero Honda's top -selling motorcycle Splendor. This
festive season, the company sold half a million two wheelers in a single montha
feat unparalleled in global automotive history.
Hero Honda bikes currently roll out from two globally benchmarked
manufacturing facilities based at Dharuhera and Gurgaon in Haryana. These
plants together are capable of churning out 3.9 million bikes per year. A third

23 | P a g e

state of the art manufacturing facility at Hardwar in Uttranchal will soon be

commissioned to cope with sustained customer demand.
Hero Honda's extensive sales and service network now spans over 3000 customer
touch points. These comprise a mix of dealerships, service and spare points, spare
parts stockiest and authorized representatives of dealers located across different
geographies.
Hero Honda values its relationship with customers. Its unique CRM initiative Hero Honda Passport Program, one of the largest programs of this kind in the
world, has over 3 million members on its roster. The program has not only helped
Hero Honda understand its customers and deliver value at different price points,
but has also created a loyal community of brand ambassadors.
Having reached an unassailable pole position in the Indian two wheeler market,
Hero Honda is constantly working towards consolidating its position in the
market place. The company believes that changing demographic profile of India,
increasing urbanization and the empowerment of rural India will add millions of
new families to the economic mainstream. This would provide the growth ballast
that would sustain Hero Honda in the years to come. As Brijmohan Lall Munjal,
the Chairman, Hero Honda Motors succinctly points out, "We pioneered Indias
motorcycle industry, and it's our responsibility now to take the industry to the
next level. We'll do all it takes to reach there.''

Mission statement:Hero Hondas mission is to strive for synergy between technology, systems and
human resources, to produce products and services that meet the quality,
performance and price aspirations of its customers. At the same time maintain the
highest standards of ethics and social responsibilities.
This mission is what drives Hero Honda to new heights in excellence and
helps the organization forge a unique and mutually beneficial relationship with all
its stake holders.

HERO HONDA'S MANDATE:-

24 | P a g e

Hero Honda is a world leader because of its excellent manpower, proven

management, extensive dealer network, efficient supply chain and world-class
products with cutting edge technology from Honda Motor Company, Japan. The
teamwork and commitment are manifested in the highest level of customer
satisfaction, and this goes a long way towards reinforcing its leadership status.

Registered & Corporate 34,

Basant
Office:-

Community
Centre
Lok,
Vasant
Vihar
New
Delhi
110057
Tel.:
+(91)-(11)-26142451
59
Fax: +(91)-(11)-26143321 / 3198 / 1830;
26152453 / 2132

Work Station:-

69
Km
New
Delhi-Jaipur
Daruhera - 121106, Haryana

Stone
Highway

Bajaj Auto Ltd.

Since 1986, there is a technical tie-up of Bajaj Auto Ltd. with Kawasaki Heavy
Industries of Japan to manufacture state-of-art range of latest two-wheelers in
India. The JV has already given the Indian market the KB series, 4S and 4S
Champion, Boxer, the Caliber series, and Wind125
Kawasaki Heavy Industries is a Fortune 500 company with a turnover of USD 10
billion (Rs. 45,840 crore). It has crafted new technologies for more than hundred
years. The technologies of KHI have redefined space systems, aircrafts, jet
engines, ships, locomotive, energy plants, automation system, construction
machinery, and of course high reliability two-wheelersKHI has given the world its
legendary series of 600-1200cc Ninja and 1600 Vulcan bikes. Straight from its
design boards, the Kawasaki Bajaj Eliminator, India's first real cruiser bike,
redefines the pleasure of "biking" in looks as
well as
performance.

Corporate Profile
'Inspiring Confidence,' the tagline, has build up confidence, through excitement
engineering, not only to domestic consumers but also internationally. Established
just eight decades back in 1926 by Jamnalal Bajaj, the company has been vested

25 | P a g e

with India's largest exporter of two and three wheelers, 196,710 units in 2004-05,
a great 26 per cent jump over the previous year.
Bajaj Auto Ltd. sales have increased by approximately 21 per cent in the year
2004-05, which exceeds Rs 65.4 billion, a record in the history of the company.
The gross operating profit stands at Rs. 9.3 billion, again a record. The profits
after tax of the BAL are close to Rs. 7.7 billion, and the pre-tax return on
operating capital is at an impressive 80 per cent.
The strength of the company is its quality products, excellence in engineering and
design, and its ability to delight the customers. The Pulsar, introduced in
November 2004, is continually dominating the premium segment of the
motorcycle market, helping to maintain the market superiority. Discover DTSi,
one more successful bike on Indian roads, is in the 'value' segment of the
motorcycle market. It incorporates a high degree of power with fuel efficiency of
a 100 cc motorcycle.
BAL is committed to prevention of pollution, continual improvement of
environment performance and compliance with all environmental legislation and
regulations. They always believe in providing the customer 'value for money' and
keep an special eye upon quality, safety, productivity, cost and delivery.

BAJAJ AUTOS MISSION:We at Bajaj Auto continue to firmly believe in providing the customer Value for
money, for years through our products and services. This we shall maintain and
improve,
In our decision making, quality, safety and service will be given as much
consideration as productivity, cost and delivery.
Quality shall be built into every aspect of our work life and business operations.
Quality improvements and customer satisfaction shall be the responsibility of
every employee.

REGISTERED OFFICE:ADDRESS:
Akurdi, Pune 411035, India
TELEPHONE: + (91)-(20)-27472851
FAX:
+ (91)-(20)-27473398
26 | P a g e

E-MAIL:
WEDSITE:

rahulbajaj@bajajauto.co.in
http://www.bajajauto.com\

PLANTS: Akurdi, Pune 411035

Bajaj Nagar, Waluj Aurangabad 431136 .

TVS Motors Ltd.:Profile:TVS Motors Company, a leading two wheeler company began with the vision of
the founder of the Sundaram Clayton Group, the late T.S. Srinivasan - 'to design,
develop and produce an affordable moped for the Indian family.
This vision was realized in 1980 when TVS 50, India's first two-seater moped
rolled out of the factory at Hosur in Tamil Nadu, Southern India. A byword for
ruggedness and reliability, the TVS 50 proved to be a promising success and
paved the way for many successes for TVS Suzuki ever since.
TVS, the first in the country to introduce computerization, achieve high
productivity, low cost and consistent high quality, now included extensive
programme to install computers at all workstations.

Background
Originally incorporated in 1982 to manufacture two-wheelers in collaboration
with Suzuki Motors of Japan, TVS was one of the leaders in two-wheeler
industry. However, disagreement on several aspects including development of
TVS brand and exports lead to severance of ties with the joint venture partner in
2002. This forced the company to develop its own R&D expertise and commit
itself to sizeable investment. It has presence in all the segments viz. motorcycle,
scooterettee and moped. TVS Scooty (scooterettee) and TVS Victor (Executive
segment - motorcycle) are its key brands. The company has also launched 2 new
fuel-efficient bikes - `Centra' and `Star'.

27 | P a g e

Vision
Our vision is the creation of an India which is a global destination for innovative
product development and thought leaders in integrated product and process
development with a focus on improving the quality of life, including that of the
poorest of the market segments at the bottom of the pyramid.

Mission
Our mission is to improve the capabilities of people engaged in the design and
development of new products and services, to encourage innovation in product
development and effective management of the product development processes.

HONDA MOTORCYCLE & SCOOTER INDIA (Pvt.) Ltd.

Honda is the world's largest manufacturer of 2-wheelers. Its symbol, the Wings,
represents the company's unwavering dedication in achieving goals that are
unique and above all, conforming to international norms. These wings are now in
India as Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI), a wholly owned
subsidiary of Honda Motor Company Ltd., Japan. These wings are here to initiate
a change and make a difference in the Indian 2-wheeler industry. Honda's dream
for India is to not only manufacture 2-wheelers of global quality, but also meet
and exceed the expectations of Indian customers with outstanding after sales
support.
About Honda Motorcycle & Scooter India Pvt. Ltd.
Official Name
Established
Place
Investment
Representative
Factory Location
Production Capacity
28 | P a g e

Honda Motorcycle & Scooter India Pvt. Ltd.

20th Aug, 1999
Manesar, District Gurgaon, Haryana, India
Rs. 300 Crore
Mr. Shinji Aoyama, President & CEO
Manesar, District Gurgaon, Haryana, India
10,000,00 Units per Year

Honda's dream for India is to not only manufacture 2-wheelers of global quality;
but also meet and exceed the expectations of Indian customers with outstanding
after sales support. They aim to produce technologically superior, efficient and
reasonably priced 2-wheelers, with Honda tested technology, backed up with after
sales service of Honda's global standard.

CORPORATE PROFILE
Honda Motor Co., Ltd., operates under the basic principles of "Respect for the
Individual" and "The Three Joys"-commonly expressed as The Joy of Buying,
The Joy of Selling and The Joy of Creating. Respect for the Individual" reflects
our desire to respect the unique character and ability of each individual person,
trusting each other as equal partners in order to do our best in every situation.
Based on this foundation of Respect for the Individual, "The Three Joys"
expresses our belief and desire that each person working in, or coming into
contact with our company, directly or through our products, should share a sense
of joy through that experience.
In line with these basic principles, since its establishment in 1948, Honda Motor
Co., Ltd., has remained on the leading edge by creating new value by providing
products of the highest quality at a reasonable price, for worldwide customer
satisfaction. In addition, the Company has conducted its activities with a
commitment to protecting the environment and enhancing safety in a mobile
society.
The Company has grown to become the world's largest motorcycle manufacturer
and one of the leading automakers. With a global network of 454* subsidiaries
and affiliates accounted for under the equity method, Honda develops,
manufactures and markets a wide variety of products ranging from small generalpurpose engines and scooters to specialty sports cars, to earn the Company an
outstanding reputation from customers worldwide.

Mission Statement

29 | P a g e

Maintaining a global viewpoint, we are dedicated to supplying products of the highest

quality at a reasonable price for worldwide customer satisfaction.
HONDA MOTORCYCLE & SCOOTER INDIA (Pvt.) Ltd.
Plot No. - 1, Sector - 3 IMT Manesar,
Distt. Gurgaon
Haryana - 122 050
Phone: + 91 - 124 -6290911, 6290919, and 6290926-28
Fax: +91 - 124 - 6290891, 6290890
HONDA MOTORCYCLE & SCOOTER INDIA (Pvt.) Ltd.
406, Level Four, Prestige Centre Point
Edward Road
Bangalore 560 046
Phone : +91 - 80 - 2282419, 2384090, 2384091
Fax : +91 - 80 - 2282409

Head Office:
2-1-1 Minami Aoyama, Minato-ku Tokyo 107-8556, Japan
Tel: +81-(0)3-3423-1111

Yamaha Motor India (YMI)

Holding the true spirit of commitment to customer satisfaction - Yamaha Motor
India is enriching lives of people with the same ingenuity and enthusiasm as its
parent company - Yamaha Motor Corporation, Japan. Having operated in India as
technology provider for almost two decades, YMI was incorporated in August
2001 as a 100'% subsidiary of YMC, Japan. Since then we have been in the
process of redefining our business processes and extending the awe and power
associated with the legacy of the Yamaha Group.
Adhering to our Corporate Mission - "Creating Kando - Touching Your Heart"
we are striving to touch every Heart across the length and breadth of India
We firmly believe in Surpassing Customer Expectations
We are aware of our customers' evolving needs and provide them with quality
products and services of exceptional value that surpass their expectations.
30 | P a g e

Establishing a Corporate environment that fosters self-esteem

We believe in nurturing and empowering our employees to the fullest. Whilst
cultivating our employees creativity and all round abilities, we have also
established an equitable system of evaluation and rewards to encourage our
people to strive towards newer benchmarks.
Fulfilling social responsibilities
As a good corporate citizen, we continually strive towards creating a better social
as well as natural environment.

Vision and Mission:

We conduct our corporate activities with customer satisfaction as our top priority.
Our clients in the Yamaha Motor group and many companies outside the group
are mostly manufacturers that are involved in programs to improve the full range
of their business activities, from product manufacturing, distribution and sales to
financing, administration, and corporate governance. We are striving to help these
clients achieve a higher level of satisfaction for people using their products.
Toward this end we are actively expanding our business in Japan and worldwide.
At Yamaha Motor Solutions we are working to become a world-class leader in
our field by bringing together the accumulated abilities and skills our individual
employee's into dynamic teams capable of creating value that surpasses the
expectations of our clients.

Corporate Profile

Name:
Location:

Board of director:
Director:

31 | P a g e

Yamaha motors ltd.

2000-1 Iwai, Iwata City, Shizuoka Pref.
Post
Code:
438-0016
Telephone: 0538-39-2213 Facsimile:
0538-39-2219
President
and
Representative
Director@Yasuharu TerIai
Takuya
Watanabe
Tetsuro
Nabata
Mitsuyoshi
Suzuki
Takeya Harada

Employees:
Sales:

Offices:

Overseas subsidiary

245 (As of January, 2006)

4.5 billion yen (As of FY ended
December,
2005)
6 billion yen (Projected FY ending
December, 2006)
Head office (Iwata City, Shizuoka
Pref.)
Iwata Office (Iwata City, Shizuoka
Pref.)
Yamaha Motor Solutions Co., Ltd.
Xiamen (Location: Amoy City, Fujian
Prov.)
Yamaha Motor Solutions India Pvt. Ltd.
(Location: Surajpur (UP state), India )

Exports:YMI is an active player in the exports market. Currently, we export motorcycles

to 50 countries including Argentina, Mexico, Philippines, Bangladesh, Sri Lanka,
Columbia, Dominican Republic, Nigeria and lvory Coast. The export Product line
boasts of RX 100, Crux, YD 125, Enticer and LiberoI.
To consolidate our position in the exports arena, we are rapidly expanding our
presence in Asia, Africa, Central and South America.
Strengthening our reputation as an export base for YMC global operations, we are bright
and optimistic about our emergence as a top-notch bike exporter of India.

32 | P a g e

which company's two wheeler are you using?

% of respondent

50
40
30
20
10
0
series

hero

bajaj

tvs

honda

yahaha

45

30

14

bike

series

Inference:Out of 100%:
45% customers are using Hero Honda two wheeler
30% customers are using Bajaj two wheeler
14% customers are using TVS two wheeler
5% customers are using Honda two wheeler
6% customers are using Yamaha two wheeler

33 | P a g e

% of Respondent

Model people want to purchase

80
60
40
series

20
0

puls App CBZ unic Gla

series 65

15

13

Bikes

Inference:Out of 100%:
65% respondents want to purchase pulsar
15% respondents want to purchase apache
13% respondents want to purchase CBZ
5% respondents want to purchase unicorn
2% respondents want to purchase gladitor

Firms or Company strategies :Two-wheeler segment is one of the most important components of the automobile
sector that has undergone significant changes due to shift in policy environment.
The two-wheeler industry has been in existence in the country since 1955. It
consists of three segments viz. scooters, motorcycles and mopeds. In India there
are some MNCs and Indian company dealing in automobile sector. The main key
players who are dealing in this sector are Hero Honda, Bajaj, Yamaha, Honda,
and TVS. Hero Honda is the biggest player in this sector in India as well as in the
world and playing a very important role in two wheeler automobile sector. Hero
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Honda, Bajaj and TVS are the Indian companies and Yamaha & Honda are
international automobile brand.
.
Hero Honda Motors Limited was established in 1984, as a joint
venture between India's Hero Group (world's largest bicycle manufacturers) and
Japan's Honda Motor Company. And created the world's single largest two
wheeler company and also one of the most successful joint ventures worldwide.
During the 80s, Hero Honda became the first company in India. Over 19 million
Hero Honda two wheelers running on Indian roads today.

Bajaj is the first Indian two wheeler automobile company in the

market since 1945 with the name M/s Bacharj trading corporation private limited.
In 1959 M/s Bacharj trading corporation private limited change its name as Bajaj
Auto Ltd. Bajaj Auto obtains license from the Government of India to
manufacture two- and three-wheelers vehicles in 1959

TVS Motors is the third largest company in the two-wheeler industry

with a market share of 16%. Infect, it is the only Indian company without a
foreign collaboration in the two-wheeler industry. When the company opted out
of the collaboration with Suzuki in 2002, many believed that TVS was headed
towards extinction. But the company proved the doomsayers wrong and came out
with a very successful `TVS Victor'. TVS Motors Ltd. originally incorporated in
1982 to manufacture two-wheelers in collaboration with Suzuki Motors of Japan,
TVS was one of the leaders in two-wheeler industry.

Yamaha Motor Corporation is the auto mobile company of

Japan (1953) which works in India since 1955 and providing latest technology in
India from last two decades. Yamaha Motor India was incorporated in august
2001 as a 100% subsidiary of Yamaha motor corporation, Japan

35 | P a g e

Honda motors of Japan is not a new name in the two wheeler

scenario in the country, they were in a tie up with the Firodias owned Kinetic
group. However in the late 90s they parted ways after problems arose over issues
like introduction of new models, advertising expenditure, marketing strategies and
other related issues. In the mid 80 Honda motors of Japan joined hands with the
largest bicycle maker of India the Hero cycles to create Hero Honda which in a
couple of decades or so have gone on to become the single largest motorcycle
company in the world. Though Honda has come on its own on the Indian market
yet it will be providing technological support to Hero Honda for the next ten
years. Thus presenting a unique situation in which the company will be in direct
competition with the company which it has been associated for nearly two
decades. Honda Motorcycles and Scooters India limited, a 100% subsidiary of
Honda motor company Japan eventually entered the Indian market with Honda
Unicorn in 2004.

36 | P a g e

CHAPTER-III

DESIGN OF THE STUDY

Objective of Study:
The main objective is to find out the current trend going on in the industry
i.e. (about the product, piece, place and promotion). Other objectives are as
follows:
To know the image of product in the mind of consumer.
To compare the level of satisfaction before purchasing and after
purchasing the bike.
To find out where people want to see the promotion schemes
To find out suitable location and preferred by consumer
To know the most popular media for advertisement
To check the loyalty of the consumer towards the Hero Honda brand
To know the most motivating factor for purchasing the bike

To know the preferable price from the customer

Scope:Today, India is well known as a potential emerging automobile market and jobs in
the automobile industry are rising. Several foreign companies have their investments in
Indian automobile industry. India is the major three-wheeler market and two-wheeler
manufacturer in the world. It is also the second largest manufacturer of tractors.
India is a home to many Indian and international automobile companies. The
candidates who have achieved bachelor's degree in mechanical, electrical or automobile
engineering are eligible to get good jobs in these companies.

Automobile Jobs Opportunities:Many job opportunities are available for the candidates with diploma courses and
ITI courses. Some of the automobile companies require IT specializations. The technical
education is offered by plenty of engineering and polytechnic colleges in India. The
eligible candidates are selected by the companies and then trained properly. Considering
the wide scope of Automobile sector, it is not surprising that more and more candidates
are dreaming to develop a career in Automobile Industry. Now, with so many foreign
37 | P a g e

automobile companies like Volkswagen, Audi, Renault etc targeting India as a base for
manufacturing cars, the scope for a career in Automobile Industry is rising rapidly.

Automobile companies in India:As automobile industry is showing rapid growth in India, the country becomes a
house to numerous well-established automobile companies. They offer excellent job
opportunitiesto develop a career in Automobile Industry. Some of the popular carproducing companies that offer jobs in the automobile industry are- Suzuki, Toyota, Tata,
Fiat, Honda, Mahindra & Mahindra, Ford, Hyundai and Skoda. Manufacturing of twowheelers is dominated by the companies TVS, Bajaj Auto, LML, Kinetic, Yamaha and
Hero Honda. The tractors are manufactured by the popular companies like Escorts, L&T,
Mahindra & Mahindra, Punjab Tractors, John-Deere, New IHolland and ITL-Renault.

Methods of data collection:The whole secondary data were collected from industry profile, books, magazines and
internet. While primary data where collected though survey. The customer survey was
done though the questionnaire. Question consists of dichotomous multiple questions and
5 point ranking scale. A copy of questionnaire has been attached with the report.

Source of data
There two types of data, primary data and secondary data. Primary data are
collected with the help of questionnaire are secondary data was taken from
industry profile, books, magazines and internet.

Limitation of the study:Despite all possible efforts in conducting the research there was some
unavoidable situation, which limited the scope of this dissertation. The limitations
of the dissertation fall under the following:1. This dissertation is confined on the basis of secondary data collected only
hence it reliable data for the study.
2. As the research is based on the data that already available and collected
through various means not includes the survey, hence it imposes limitations,
as it is just possible that the secondary data may be unsuitable or may be
inadequate in the context of the topic under study.

38 | P a g e

3. One of the major limitation of the study is that, as the data is collected though
the secondary means, hence it creates uncertainties regarding the methods of
the data collection, time of data collected, and any bias of the compiler during
the pervious research and at the time of data collection.
4. Limitation of time & resources were a major factor influencing the research
study.
5. The research guide has helped us though at the project study, yet his busy time
schedule restricted as to cut short our discussions though detailed discussions
were required for the project.

Suggestions:No matter how much on organization progresses it always lack something.

These are shortcoming of every company. After completing my report on new
Hero Honda motors Ltd. I have some suggestions to offer. The suggestions can be
proved useful for the company as they have feasibility and viability.

The recommendations are: Hero Honda Motors only manufacture a wide rand of 4-stroke bike. But in
my opinion 2-stroke bikes have a better pick up. So in order to letter to the
need of a large segment of customers, who want a better pick up bike,
Hero Honda go into the manufacture of 2-stroke bikes.
The company has always targeted urban sector of Indian population. But
in the rural sector escorts; Rajdoot enjoys a great market share. So,
therefore Hero Honda should target this upcoming market.
Hero Honda should keep a strict watch on to competitions. For instance
Yamaha has introduced a 4-stroke bike YBK whose features are almost
same as Splendors.
The company should work more on public relation.

39 | P a g e

Conclusions:The study which we conducted on the two wheeler automobile sector is a

very important topic of automobile sector.
Two wheeler automobile sector is the backbone of the automobile sector
in India. After deep research, analysis and getting information about companies as
formulated that the two wheeler automobile companies achieved success in the
market.
Through out the study we found the Two wheeler manufacturer having
very new and modern technology in their bikes, they have a good market share in
India, many of MNC's like Honda, Yamaha ,Suzuki are also giving large
competition.
Concluding the performance of the company related to two wheeler sector
in India, getting their market share and growth and what are services they are
providing after sales.
Hero Honda has managed to put in spectacular performance going from
strength despite increase in competition; the company's sales have witnessed an
up trend, registering an average growth of 42% in the three years under review.
Hero Honda has managed to achieve this because its strong brand image
and proven product quality underpinned the performance growth in recent years.
Apart from the strong brand "splendor" the company's performance across the
spectrum of the motorcycle market helped it exploit the growing demand for 4stroke motorcycle.
At the lower end the company has CD 100 SS at middle level splendor,
passion and Dawn the CBZ Extreme/ Karizma range is targeted at premium
segment.
Some years back Hero Honda are getting stiff competition because of
Bajaj, TVS and Yamaha have a presence in 125cc bikes segments where Hero
Honda has not any presence in this segment. Now this gap is filling up by Hero
Honda's new Splendor NXG, Glamour. But still there is a gap between 150cc to
225cc segment which is most preferable segment by youth today.

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With newer and better models are coming up customer has better and
bigger choices to choose from.
It is the competition on various aspects such as price, design technology,
after sales services and even purchases offers, which provides to both buyer and
seller.
Even many dealers are in view that today Hero Honda and Bajaj, thrives
on competition.
Right now it seems that the real war is between Hero Honda and Bajaj
auto. But one cannot discount the fact that there are other players, who are gaining
strength day by day.

BIBLIOGRAPHY

1.We have visited in various showrooms.

2.Internet Sites:

www.bajajmotors.com
www.herohondamotors.com
www.indiabike.net.com
www.google.com
www.yahoofinance.com
www.indiaserf.com
www.honda2wheeler.com
www.yamahamotorsindia.com
www.tvsmotorsltd.com

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