MARKETING

STRATEGIES OF
HERO
MOTOCORP
 TABLE OF CONTENTS

1. EXECUTIVE SUMMARY...................................................................................4

2. INTRODUCTION ................................................................................................6

3. COMPANY PROFILE........................................................................................20

4. RESEARCH OBJECTIVE & METHODOLOGY..............................................30

5. LITERATURE REVIEW....................................................................................31

6. PRIMARY FINDING AND ANALYSIS............................................................46

7. RECOMMENDATIONS.....................................................................................63

8. CONCLUSION & IMPLICATIONS..................................................................64

9. BIBLIOGRAPHY...............................................................................................66

10. COPY OF THE QUESTIONNAIRE...................................................................67

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 INTRODUCTION

Indian Two-Wheeler Industry

The Indian two-wheeler (2W) industry recorded sales volumes of 3.4 million units in Q3,
2011-121, a growth of 11.0% (YoY) but flat (QoQ). Although the YoY volume growth of
the industry remained in double digits, the pace of growth during the last quarter was at
its lowest gear in the last three years. The deceleration in growth was contributed mainly
by the motorcycles segment which grew at a much lower rate of 9.2% (YoY) in Q3,
2011-12; even as the scooters segment continued to post 20%+ (YoY) expansion. Overall,
ICRA expects the domestic 2W industry to report a volume growth of ~13% in 2011-12
as we expect growth to fade further in Q4, 2011-122 due to base effect.

In an environment where the northward movement of inflation, fuel prices and interest
rates has been the nemesis of the Indian automobile industry at large, the 2W industry has
been the most resilient reflected in its healthy volume growth of 15.0% (YoY) in 9m,
2011-12. The growth has been supported by various structural positives associated with
the domestic 2W industry including favourable demographic profile, moderate 2W
penetration levels (in relation to several other emerging markets), under developed public
transport system, growing urbanization and expected strong replacement demand, besides
moderate share of financed purchases. ICRA expects these strengths, coupled with the
OEMs’ thrust on exports, to aid the 2W industry to report a volume CAGR of 10-12%
over the medium term to reach a size of 21-23 million units (domestic + exports) by
2015-16.

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Trend in Sales Volumes of the Indian 2W Industry

Although the YoY volume growth of the industry remained in double digits, the pace of
growth during the last quarter was at its lowest gear in the last three years. In an
environment where the increase in inflation, fuel prices and interest rates has been the
archenemy of growth in the Indian automobile industry at large, the 2W industry has been
the most tough and was reflected in its vigorous volume growth.

A look on the volumes of major 2-wheeler OEMs -

There seems to be an early mix shift underway - favoring scooters over bikes (beneficial
to Honda) and favoring executive segment over premium (benefits Hero over Bajaj) has
been seen. While growth in scooters appears structural (driven by appeal of the scooter as
a vehicle that cuts across gender and age biases), while the growth in executive segment
appears cyclical as consumers baulk at high fuel prices and downshift to more fuel
efficient products. A long-term trend of consumers preferring premium bikes should

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resume – volumes should recover, though timing will remain uncertain - maybe in FY14,
but potentially after that too.

To understand deeper on the available segments (Motorcycles) and the respective

offerings -

1) Economy Segment -

2) Executive Segment -

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3) Premium Segment -

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Even though the number of offerings in the premium segment seems high, maximum
volume churners still remain the products in executive & economy segments. With an
aggressive pricing for Pulsar 200 NS & Duke 200; Bajaj plans to gain strategically in
terms of volumes over the period of time. Bajaj's dominance in Executive segment is the
the primary reason for its high operating margin and thus emerge as one of the most
profitable 2-wheeler OEMs.

Profile of the Indian 2-wheeler companies -

HeroMotoCorp is now world’s largest manufacturer of two-wheelers. The company has

benefited from the demand shift to motorcycles, as it focuses solely on this product
segment (although has a product called Pleasure in Scooter segment). With fuel efficiency
and riding comfort as the main selling points, HMC has been able to address a wide
market and post robust sales growth even after its separation from the Japanese major
Honda.

Bajaj Auto is well positioned in the motorcycle segment as the 2nd largest player with
around 30% market share. Over the last decade, the company has successfully changed
its image from a scooter manufacturer to a two-wheeler manufacturer. Its product range
encompasses scooterettes, scooters and motorcycles. Though the company is miles
behind Hero in terms of sales volumes, it is now India’s most profitable two-wheeler
manufacturer.

TVS Motor Company Limited is the third largest two-wheeler manufacturer in India. It
is the flagship company of the parent TVS Group employing over 40,000 people with an
estimated 15 million customers. It manufactures motorcycles, scooters, mopeds and auto
rickshaws. TVS Motor is credited with many innovations in the Indian automobile
industry, notable among them being the introduction of India's first two-seater moped, the
TVS 50cc. The company became the leader in its category of sub 100 cc mopeds, having
sold 7 million units. It also introduced the TVS Scooty, which is India's second largest
brand in the scooterette segment. The TVS Jive launched in November 2009 became
India's first clutch-free motorbike aimed at a stress-free rider experience. But the growth
in F12 was dismal and seems to lose ground against competition.

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Honda Motorcycle and Scooter India, Private Limited (HMSI) is the wholly owned
Indian subsidiary of Honda Motor Company, Limited, Japan. Founded in 1999, it was the
fourth Honda automotive venture in India, after Hero Honda, Kinetic Honda Motor Ltd
and Honda Siel Cars India. The entry of Honda into the Indian market as HMSI began
with the launch of the Honda Activa, a 100 cc scooter. A slightly modified trendier
version of the Activa was soon launched, as the Honda Dio. Honda Eterno was launched
thereafter to add to the portfolio of HMSI's scooters. The Honda Unicorn was the
first motorcycle released by HMSI. The Honda Shine has since been released.

India Yamaha Motor, IYM (officially India Yamaha Motor Private Limited) is
an Indian subsidiary of Yamaha Motor Company, formed in 2008 as a joint venture
with Mitsui. It produces a range of motorcycles for domestic consumption and export.
Yamaha motors in India have been present in the market of low range economy bikes for
a long time. All bikes in their store were designed for mass market, but with the
introduction of FZ-16, FZ-S, Fazer, and R15 they have made an impression on the mid
range bike market in India.

Suzuki Motorcycle India Pvt. Ltd. is a subsidiary of one of the world's leading two-
wheeler manufacturer Suzuki Motor Corporation. The company’s products include
motorcycles and scooters. The company was incorporated in 1997 in India.

Mahindra Two Wheelers Limited (MTWL) is backed by the Mahindra Engineering

Services (MES), the Italy-based design house, engines engineering and Taiwan’s Sanyang
Industry Company Limited (SYM). In 2011 Mahindra became the first Indian two-
wheeler manufacturer to enter the Moto Grand Prix Championships. This two wheeler
maker formally entered the two wheeler industry by acquiring with the successful
acquisition of business assets of Kinetic Motor Company Limited.

Market Share Trends

The Indian motorcycles segment continues to be dominated by Hero MotoCorp which

has maintained its market share at over 55% in the domestic motorcycles segment over
the last five quarters. The top three players accounted for 89.5% of the industry’s

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volumes in Q3, 2011-12 (92.0% in 2007-08), with Honda Motorcycles reclaiming its spot
as the third largest player, a position which it had lost out to TVS in the previous quarter
after having retained it since Q4, 2009-10. In the 75-125cc segment of motorcycles (that
represented 71% of total motorcycles sales volumes in 9m, 2011-12), Hero MotoCorp
continues to be a strong market leader with a share of 74.2% in 9m, 2011-12 (70.4% in
9m, 2010-11). In the >125cc segment of motorcycles, while Bajaj Auto continues to
account for nearly half the segment’s volumes (49.1% in 9m, 2011-12), Yamaha has been
the fastest growing having improved its market share from 8.1% in 9m, 2010-11 to 10.1%
in 9m, 2011-12.

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Trend in Market Share in Motorcycles Segment (Domestic)

Sales Volumes Analysis - Scooters

Barring Q1, 2011-12, the growth in scooter segment’s sales volumes has generally
outperformed that of the motorcycles segment, partly due to the former’s smaller base. In
Q3, 2011-12 too, the sales volumes of the domestic scooters segment at ~660,000 units
recorded a growth of 21.6% (YoY), higher than the 9.2% growth in motorcycle sales.
With this, the share of the scooters segment in the total domestic two-wheeler volumes
increased to 19.4% in Q3, 2011-12 from 17.6% in 2010-11.

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Trend in Quarterly Sales Volumes of Scooters (Domestic)

Market Share Trends

Overall, Honda Motorcycles continues to maintain its leadership position in the scooters
segment through its flagship brand Activa (besides Aviator and Dio) enjoying a market
share of 50.7% in Q3, 2011-12. While capacity shortfall at the company’s plant at
Manesar (Haryana) had restricted its volume growth in the recent past, the company
began commercial production at its new plant at Tapukara (Rajasthan) in July 2011. This
has allowed the company to consolidate its market position over the last two quarters.
However, Hero MotoCorp’s demonstrated success in improving market share (through its
sole brand Pleasure) coupled with new scooter models proposed to be launched by Hero
MotoCorp, TVS and Yamaha over the short to medium could imply shrinkage of market
share gap between the market leader and others over time.

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Trend in Market Share in Scooters Segment (Domestic)

Hero MotoCorp

Trend in Financial Performance of Hero MotoCorp

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Revenues: In Q3, 2011-12, Hero MotoCorp’s revenues at Rs. 5,983.6 Crore grew by
16.9% YoY and 3.4% QoQ, supported by 11.3% YoY and 2.9% QoQ increase in sales
volumes and 5.0% YoY and 0.5% QoQ increase in average realizations. Till 2010-11,
exports accounted for 2.5% of the company’s sales volumes. Although since the time
Hero MotoCorp’s JV agreement with its erstwhile partner Honda (Japan) ceded in Dec
2010, the company has been unable to scale up its exports much; it is likely to get more
aggressive on the exports front as and when its fourth manufacturing plant gets
established (for which the company is mulling a location near one of the ports).

Operating Profit Margins (OPM): Hero MotoCorp’s OPM at 15.0% in Q3, 2011-12,
declined marginally by 15 basis points (bps) QoQ but increased by 454 bps YoY. The
YoY expansion in HMCL’s core EBITDA margins, however, was relatively lower at 194
bps YoY on exclusion of the estimated royalty payments made by HMCL to its erstwhile
partner Honda Motor Company (HMC, Japan) in Q3, 2010-11. Going forward, HMCL’s
ability to sustain the scale required to absorb the additional expenses being incurred for
creating a new corporate brand, introduction of new models, building of R&D capability
and exploring overseas markets will govern its profitability.

Net Profits: Hero MotoCorp’s Q3, 2011-12 PAT at Rs. 613.0 Crore grew by 42.9% YoY
and 1.6% QoQ. Overall, the company’s revenues and PAT touched a record high in Q3,
2011-12.

Bajaj Auto

Trend in Financial Performance of Bajaj Auto

Revenues: In Q3, 2011-12, Bajaj Auto’s revenues at Rs. 5,063.2 Crore grew by 21.2%
YoY but declined by 3.9% QoQ) led by continued strong exports growth in both the 2W
as well the three-wheeler (3W) segments; increase in average realization due to both
price increase as well as favourable change in product mix; and favourable currency
movement on exports. The company management’s outlook on exports (~32% of 2W
volumes in Q3, 2011-12) remains robust with a target to achieve export of 1.5 million
units in 2011-12E, reflecting a growth of 25% over 2010-11.

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Operating Profit Margins (OPM): Bajaj Auto’s OPM improved to 21.0% in Q3, 2011-
12, higher by 63 bps YoY and 89 bps QoQ. The improvement in margins was supported
by relatively higher realizations from exports, operating leverage benefits and
rationalization of spends on sales promotion. The DEPB benefits were discontinued post
September 2011; however, BAL has undertaken price increase on export models (besides
price increase on domestic models), which should allow the company to sustain its
margins going forward.

Net Profits: In Q3, 2011-12, while Bajaj Auto’s OPBITDA growth at 25.0% (YoY) was
robust, the company’s PAT at Rs. 795.2 Crore grew at a relatively lower rate of 19.2%
(YoY). This was due to the exceptional MTM loss of Rs. 58.9 Crore recorded by the
company in Q3, 2011-12 related to the valuation of forward exchange contracts. This is a
notional loss and would get reversed on maturity of the underlying contracts (assuming
the company’s actual exports remain in line with its budgeted estimates during the term
of the contract).

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TVS Motor

Trend in Financial Performance of TVS

Revenues: In Q3, 2011-12, TVS’ Net Sales at Rs. 1,762.2 Crore grew by 7.0% YoY but
declined by 11.5% QoQ. While the company’s total 2W volumes in Q3, 2011-12 grew by
0.9% YoY and total three-wheeler (3W) volumes declined by 11.0% YoY, the revenue
growth was much higher by virtue of favourable change in product mix. Thus,
notwithstanding the increase in proportion of low-ticket mopeds in TVS’s domestic 2W
sales volumes from 39% in Q3, 2010-11 to 41% in Q3, 2011-12, the increase in
proportion of >100cc scooter (Wego) and >125cc motorcycles (mainly Apache RTR
family) in its sales mix enabled it to improve its average realization YoY.

Operating Profit Margins (OPM): TVS’ OPM at 6.5% in Q3, 2011-12 was 44 bps
higher YoY but 40 bps lower QoQ. While the company’s product mix in Q3, 2011-12 was
in its favour on YoY basis, its relative deterioration on QoQ basis accordingly translated
into movement in OPM.

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Net Profits: While TVS recorded OPBITDA growth of 14.6% YoY in Q3, 2011-12, the
company’s PAT growth at 1.4% YoY was much lower on account of higher tax rate and
lower ‘other income’. Also, the company’s PAT in Q3, 2011-12 declined by 26.1% on
QoQ basis both due to negative revenue growth (QoQ) as well as decline in OPM on
QoQ basis.

Facts about India's growing two-wheeler market

 According to industry body, the Society of Indian Automobile Manufacturers, the

Indian two-wheeler industry is expected to post an annual growth of 11-12 per cent,
and the market is expected to double every four years till 2020. According to data
from Nomura and Crisil, as many as 10 million two-wheelers were sold in India
2011-12. Vehicles in the executive segment formed the bulk of sales at 6.5 million,
followed by the economy segment (1.8 million) and premium segment (1.7 million).
 The recent series of hikes in the price of petrol have played a significant role in the
sale of two-wheelers, according to SIAM, as most first-time four-wheeler buyers in
rural India and tier II and tier III cities have deferred their purchases. Two-wheelers
account for a whopping 76 per cent of market share in the automobile sector in Asia’s
third-largest economy. Passenger vehicles account for 16.25 per cent.
 Barely 18 months after India’s most successful two-wheeler marriage ended, Honda
made its ambitions clear by launching the 110cc Dream Yuga, its first low-cost
motorcycle meant to target the budget market ruled by Hero and Bajaj. The Dream
Yuga comes at an attractive Rs. 44,642, and will compete with Hero’s Splendor,
which costs Rs. 42,950. The Splendor is India’s top-selling bike.
 Other two-wheeler companies such as Yamaha and Suzuki, too, are steadily focusing
on the mass-market segment in an attempt to dislodge the two giants—Hero and
Bajaj. Yamaha last month announced a new $280 million factory in India to nearly
triple its capacity to 2.8 million motorcycles by 2018, while Suzuki Motor, which is
expected to launch a mass-market offering soon, is building a new factory to take its
India capacity to close to one million motorcycles by 2014.
 Hero has a market share of around 56 per cent in the overall domestic two-wheeler
market. At 25.5 per cent, Bajaj comes a distant second, but maintains a healthy lead
over Honda and TVS, which have 7.5 per cent and 6.2 per cent market share,

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respectively. In terms of volume growth over the previous fiscal year, Hero leads with
16.5 per cent, followed by Honda (13.6 per cent), Bajaj (7.4 per cent) and TVS
Motors (minus 0.3 per cent). Top brands from each stable are as follows: Hero –
Passion, Splendor and Pleasure (scooter); Bajaj – Pulsar and Discover; Honda –
Unicorn, Twister and Activa (scooter); TVS – Flame, Apache and Scooty (scooter)

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 COMPANY PROFILE

Hero MotoCorp Ltd. (Formerly Hero Honda Motors Ltd.) is the world's largest
manufacturer of two - wheelers, based in India. In 2001, the company achieved the
coveted position of being the largest two-wheeler manufacturing companyin India and
also, the 'World No.1' two-wheeler company in terms of unit volume sales in a calendar
year. Hero MotoCorp Ltd. continues to maintain this position till date.

Vision

The story of Hero Honda began with a simple vision - the vision of a mobile and an
empowered India, powered by its bikes. Hero MotoCorp Ltd., company's new identity,
reflects its commitment towards providing world class mobility solutions with renewed
focus on expanding company's footprint in the global arena.

Mission

Hero MotoCorp's mission is to become a global enterprise fulfilling its customers' needs
and aspirations for mobility, setting benchmarks in technology, styling and quality so that
it converts its customers into its brand advocates. The company will provide an engaging
environment for its people to perform to their true potential. It will continue its focus on
value creation and enduring relationships with its partners.

Strategy

Hero MotoCorp's key strategies are to build a robust product portfolio across categories,
explore growth opportunities globally, continuously improve its operational efficiency,
aggressively expand its reach to customers, continue to invest in brand building activities
and ensure customer and shareholder delight.

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Manufacturing

Hero MotoCorp two wheelers are manufactured across three globally benchmarked
manufacturing facilities. Two of these are based at Gurgaon and Dharuhera which are
located in the state of Haryana in northern India. The third and the latest manufacturing
plant is based at Haridwar, in the hill state of Uttrakhand.

Technology

In the 1980's the Company pioneered the introduction of fuel-efficient, environment

friendly four-stroke motorcycles in the country. It became the first company to launch the
Fuel Injection (FI) technology in Indian motorcycles, with the launch of theGlamour FI in
June 2006.

Its plants use world class equipment and processes and have become a benchmark in
leanness and productivity.

Hero MotoCorp, in its endeavor to remain a pioneer in technology, will continue to

innovate and develop cutting edge products and processes

Products

Hero MotoCorp offers wide range of two wheeler products that include motorcycles and
scooters, and has set the industry standards across all the market segments.

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Distribution

The Company's growth in the two wheeler market in India is the result of an intrinsic
ability to increase reach in new geographies and growth markets. Hero MotoCorp's
extensive sales and service network now spans over to 5000 customer touch points. These
comprise a mix of authorized dealerships, service & spare parts outlets, and dealer-
appointed outlets across the country.

Brand

The new Hero is rising and is poised to shine on the global arena. Company's new
identity "Hero MotoCorp Ltd." is truly reflective of its vision to strengthen focus on
mobility and technology and creating global footprint. Building and promoting new brand
identity will be central to all its initiatives, utilizing every opportunity and leveraging its
strong presence across sports, entertainment and ground- level activation.

2010-11 Performance

Total unit sales of 54,02,444 two-wheelers, growth of 17.44 per cent

Total net operating income of INR 19401.15 Crores, growth of 22.32 per cent Net profit
after tax at INR 1927.90 Crores Total dividend of 5250% or INR 105 per share including
Interin Dividend of INR 70 per share on face value of each share of INR 2 each EBIDTA
margin for the year 13.49 per cent EPS of INR 96.54

Milestones

1983

Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
Shareholders Agreement signed

1984

Hero Honda Motors Ltd. incorporated

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1985

First motorcycle "CD 100" rolled out

1987

100,000th motorcycle produced

1989

New motorcycle model - "Sleek" introduced

1991

New motorcycle model - "CD 100 SS" introduced

500,000th motorcycle produced

1992

Raman Munjal Vidya Mandir inaugurated - A School in the memory of founder

Managing Director, Mr. Raman Kant Munjal

1994

New motorcycle model - "Splendor" introduced

1,000,000th motorcycle produced

1997

New motorcycle model - "Street" introduced

Hero Honda's 2nd manufacturing plant at Gurgaon inaugurated

1998

2,000,000th motorcycle produced

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1999

New motorcycle model - "CBZ" introduced

Environment Management System of Dharuhera Plant certified with ISO-14001 by DNV
Holland
Raman Munjal Memorial Hospital inaugurated - A Hospital in the memory of founder
Managing Director, Mr. Raman Kant Munjal

2000

4,000,000th motorcycle produced

Environment Management System of Gurgaon Plant certified ISO-14001 by DNV
Holland
Splendor declared 'World No. 1' - largest selling single two-wheeler model
"Hero Honda Passport Programme" - CRM Programme launched

2001

New motorcycle model - "Passion" introduced

One million production in one single year
New motorcycle model - "Joy" introduced
5,000,000th motorcycle produced

2002

New motorcycle model - "Dawn" introduced

New motorcycle model - "Ambition" introduced
Appointed Virender Sehwag, Mohammad Kaif, Yuvraj Singh, Harbhajan Singh and
Zaheer Khan as Brand Ambassadors

2003

Becomes the first Indian Company to cross the cumulative 7 million sales mark
Splendor has emerged as the World's largest selling model for the third calendar year in a
row (2000, 2001, 2002)

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New motorcycle model - "CD Dawn" introduced
New motorcycle model - "Splendor +" introduced
New motorcycle model - "Passion Plus" introduced
New motorcycle model - "Karizma" introduced

2004

New motorcycle model - "Ambition 135" introduced

Hero Honda became the World No. 1 Company for the third consecutive year.
Crossed sales of over 2 million units in a single year, a global record.
Splendor - World's largest selling motorcycle crossed the 5 million mark
New motorcycle model - "CBZ*" introduced
Joint Technical Agreement renewed
Total sales crossed a record of 10 million motorcycles

2005

Hero Honda is the World No. 1 for the 4th year in a row
New motorcycle model - "Super Splendor" introduced
New motorcycle model - "CD Deluxe" introduced
New motorcycle model - "Glamour" introduced
New motorcycle model - "Achiever" introduced
First Scooter model from Hero Honda - "Pleasure" introduced

2006

Hero Honda is the World No. 1 for the 5th year in a row
15 million production milestone achieved

2007

Hero Honda is the World No. 1 for the 6th year in a row
New 'Splendor NXG' launched
New 'CD Deluxe' launched
New 'Passion Plus' launched

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New motorcycle model 'Hunk' launched
20 million production milestone achieved

2008

Hero Honda Haridwar Plant inauguration

New 'Pleasure' launched
Splendor NXG lauched with power start feature
New motorcycle model 'Passion Pro' launched
New 'CBZ Xtreme' launched
25 million production milestone achieved
CD Deluxe lauched with power start feature
New 'Glamour' launched
New 'Glamour Fi' launched

2009

Hero Honda GoodLife Program launched Hunk' (Limited Edition) launched

Splendor completed 11 million production landmark
New motorcycle model 'Karizma - ZMR' launched
Silver jubilee celebrations

2010

New model Splendor Pro launched

Launch of new Super Splendor and New Hunk

2011

New licensing arrangement signed between Hero and Honda (Hero Honda is renamed as
Hero)
Launch of new refreshed versions of Glamour, Glamour Fi, CBZ Xtreme, Karizma
Crosses the landmark figure of 5 million cumulative sales in a single year

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SWOT Analysis of Hero MotorCorp

Strength

1 Ability to understand customer’s needs and wants.

2 Recognized and established brand name.
3 Effective advertising capability.
4 It’s after sales service
5 Maintenance cost is low
6 Resale value is high
7 Company’s name is synonymous with fuel efficient bikes and connectivity.
8 Huge brand equity and one of the biggest players in the two wheelers Indian
market
9 Huge variety of products in every segment
10 Excellent distribution, over 5000 dealerships and service centers
11 Good advertising and excellent rebranding from Hero Honda to Hero Moto
Corp

Weakness

1 Market share in premium segment is low.

2 People are concerned after brand migration regarding technology.
3 Spare parts availability issues.

Opportunities

1 Global expansion in countries of Africa and South America.

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2 Expansion of target market (include women, male scooter and trans road bike).
3 Scooter market is increasing thus they can be India’s leader in scooter market.
4 Financial help easily available to customers.
5 Relatively low rate of interest and the discount of prices offered by the dealers
and manufacturers lead to the increasing demand for two wheeler vehicles.
6 Large market for the high performance segment which is increasing with the
upliftment of the lifestyle of people.
7 Purchasing power has increased of customers.
8 Strategic alliance with EBR and AVL for technology transfer.

Threat

1 Honda motorcycles and scooters India has become aggressive and launching
products for mass market in 100cc eg. Dream yuga
2 Bajaj motors is a strong competition in premium segment
3 FDI announced in automobiles is 100%
4 Petrol prices are increasing thus sale of premium segment bikes may decrease
5 Aluminum and steel prices will increase.
6 Strong competition from Indian as well as international brands
7 Dependence on government policies and rising fuel prices

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 RESEARCH OBJECTIVE AND METHODOLOGY

OBJECTIVE:

a. To do the comparison in two wheeler industry with special reference to Hero Motorcop

b. To identify the market position of Hero Motorcorp

c. To analyze the current competition scenario of Two Wheeler Industry

d. To explore the challenges and opportunities in Two Wheeler Industry

e. To identify the consumer preference towards Two Wheeler Companies

RESEARCH METHODOLOGY:

Secondary data: Company website, newspaper, magazines, books, articles and online
journals

Primary data: It will be collected through questionnaire survey.

Tool Used: A Structured Questionnaire will be used

Sampling Method: Random Sampling Method

Sample Size: 100

Target Audience: Marketers

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 LITERATURE REVIEW

Comparison between April-May 2012 and April-May 2013

Indian two wheeler industry saw a slight growth of 1.04% during the April-May period of
2013 compared against the same period of 2012. A total of 2,374,253 units were sold
during the period as 2,349,814 units were sold in April-May 2012.

Hero Motor Corp is the biggest manufacturer in Indian market who sold 1,035,823 units
during April-May 2013, thus registered a 3.54% decline in sales as against same period
the previous year where 1,073,815 units were sold. The provision of giving 5 year
warranty on every vehicle didn’t pay off well for Hero.

The notable highlight of the period is the flourishing sales of Vespa, as they sold 8280
units during the period April-May 2013 and posted a growth of 247.02% as against same

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period last year. Honda, Yamaha and Royal Enfield had also posted growths while Suzuki
sales took a downturn.

The period April-May of 2013 saw the share of Hero came down to 43.63%. Honda gain
some shares and put themselves at second place replacing Bajaj. Honda holds 19.79%
share as per April-May 2013 while Bajaj has now 17.35% share.

Motorcycles

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Sales of Hero declined by 7.27% while Yamaha also saw their sales went down by
9.39%. Apparently Honda registered 21.33% growth. Royal Enfield and Harley Davidson
also wrapped up the month with concrete sales figures.

Triggered by the decline of sales Hero’s share in motorcycle segment came down to
53.60% for April to May period of 2013. Their former partner Honda with improved
share of 11.67% stays as third place in terms of sales in Indian two wheeler market.

Scooters

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The sales of scooter witnessed an encouraging growth by 13.88% in the April to May
period of 2013 as compared to same period of 2012. Hero motor Corp had fared an
uplifting growth of 44.94% during the period April-May 2013 as against April-May 2012.
The newly launched Vespa has also reassured hopes for Piaggio as 8280 units were sold
out in April – May this year. M&M has suffered a steep decline of 48%.

Honda remains mater leader in this segment and owns 50.92% of market share. Hero has
again grew in market share for the period April-May of 2013 and now holds 21.07% of
Scooter market share. To recapture the lost market share , Honda has now introduced
110cc Activa-I priced at around Rs 44,000 and this will provide tough competition to
Hero and Suzuki in coming months.

Moped

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TVS is the lone player in moped segment. But their sales had declined by 11.45% for the
period April-May of 2013 as against same period the previous year. To increase Moped
sales, TVS has started TV commercial recently.

Bajaj Auto Vs Hero MotoCorp

In the current negative sentiment of the Auto sector, SIAM has lowered the growth
guidance for the four wheeler segment but has retained the guidance for the two
wheelers. In our latest analysis in our flagship magazine Dalal Street Investment Journal
we have covered comparative analysis of countries top two wheeler companies named
Bajaj Auto and Hero MotoCorp.

Bajaj Auto (BAL) and Hero MotoCorp (HMCL) together have 80% of market share in
the domestic motorcycle segment. Interesting both the companies are also Sensex
participants with a weight of 2.99%. The growth angle to the companies is that they have
exposure to the rural segment where there is the next wave of growth.

The distinctive feature of their business is that BAL has three wheeler categories. BAL
also derives exports revenues which forms a major part of its revenues. HMCL also has
exports revenues but it does not have any three wheeler category.

33
In the highly competitive market, both the companies have a long list of brands. BAL has
a top brand Pulsar while HMCL also has brands like CBZ, Karizma, and Splendor etc.
Over the years HMCL has played volume game while BAL has placed most of its brands
in the premium segment. BAL also markets foreign brands in India. HMCL on the other
hand is also expected to enter in the premium segment and has sourced the high end
technology in partnership with a US based company Erik Buell Racing (EBR).

On the financial front HMCL has shown a volume as well as revenue growth over the
past few years and in that terms it has outpaced the industry as well as its rival BAL.
Bajaj on the other hand is more profitable and has show a very good margin improvement
in last 5 years.

There are also few other factors that we have considered in our analysis such as
valuation, the issues of the inventory pile ups, Capex plans, tax outgo’s etc and one can
read that in detail in the three page analysis in the magazine.

SWOT Analysis of Bajaj Auto

Strengths

 Highly experienced management.

 Product design and development capabilities.
 Extensive R & D focus.
 Widespread distribution network.
 High performance products across all categories.
 High export to domestic sales ratio.
 Great financial support network (For financing the automobile)
 High economies of scale.
 High economies of scope.

Weaknesses

 Hasn't employed the excess cash for long.

 Still has no established brand to match Hero Honda's Splendor in commuter
segment.
 Not a global player in spite of huge volumes.
 Not a globally recognizable brand (unlike the JV partner Kawasaki)

34
Threats

 The competition catches-up any new innovation in no time.

 Threat of cheap imported motorcycles from China
 Margins getting squeezed from both the directions (Price as well as Cost)
 TATA Ace is a serious competition for the three-wheeler cargo segment.

Opportunities

 Double-digit growth in two-wheeler market.

 Untapped market above 180 cc in motorcycles.
 More maturity and movement towards higher-end motorcycles.
 The growing gearless trendy scooters and scooterette market.
 Growing world demand for entry-level motorcycles especially in emerging
markets.

SWOT Analysis of TVS Motors

Strength

1. Huge brand equity and one of the biggest players in the two wheelers Indian market

2. Excellent R&D, and wide variety of products in every segment

3. Excellent distribution and good number of service centers

4. TVS Group has over 40,000 employees and a customer reach of over 15 million

5. Associating itself with celebrity brand ambassadors

6. ‘Scooty’ as a brand has become a second name for the scooterrate segment

Weakness

1. Absence in the premium bike segment

Opportunity

1. Two-wheeler segment is one of the most growing industries

35
2. Export of bikes is limited i.e. untapped international markets

Threats

1. Strong competition from Indian as well as international brands

2. Dependence on government policies and rising fuel prices

3. Better public transport will affect two-wheeler sales

SWOT Analysis of Yamaha Motors

Strength

1. Excellent branding, advertising and global distribution

2. Yamaha Motor Corporation has over 39,000 employees

3. One of the major brand in motorsport like MotoGP, World superbike etc

4. Yamaha produces scooters from 50 to 500 cc, and a range of motorcycles from 50 to
1,900 cc, including cruiser, sport touring, sport, dual-sport, and off-road

5.Extremely high Size and reach of company

Weakness

1. Bikes like R15, R1 are quite expensive

Opportunity

1. Two-wheeler segment is one of the most growing industries

2.Export of bikes is limited i.e. untapped international markets

Threats

1. Cut Throat Competition

36
2. Increasing number of players in the market

3. Rising raw material cost

4. Increasing rate of interest on finance

Demand Drivers for the two wheeler industry

On one hand, growing economic well-being reflected in rising per capital GDP is likely
to make 2Ws more affordable; on the other, various fundamental drivers such as low 2W
penetration (in relation to several other emerging markets), favorable demographics
growing urbanization and swelling replacement demand are expected to enable the
growth momentum to sustain over the medium term.

Rise in GDP per Capita has increased affordability of 2W

India’s per capita real GDP growth of 7% (CAGR) over the last six years has contributed
substantially towards raising the standard of living of households, which in turn has been
one of the key drivers of growth for the country’s automobile industry. However, income
growth is likely to have been uneven across the different income deciles. Income at the
lower end of the distribution scale, which comprises the 2W target segment, is likely to
have grown at a rate below the overall per capita income growth rate. Yet economic
wellbeing has led to a significant increase in the number of households coming within the
2W target segment over the past few years. As per NCAER’s estimates, the number of
households having annual income between Rs. 200,000- 500,000 is estimated to have
increased to 22 million in 2015-16, a scale-up by a factor of 2.5x over 2011-12

Incidentally, this scale-up is almost similar to the expansion in the domestic 2W industry
size (by volumes) during this period. Given that economic and population growth would

37
further expand the universe of low to middle income earners who have the threshold
purchasing future as well. Also, significantly, 2W purchase prices and operating expenses
(inflation power to buy a 2W, the pattern of healthy industry growth is likely to hold in
the foreseeable adjusted) are now around 36% lower than they were a decade back,
considering that vehicle prices have not escalated much over the years, indicating
increasing in affordability of 2Ws

Under-penetrated market as compared to other emerging markets to provide

adequate headroom for future growth

Although India is the second largest 2W market in the world in terms of sales volumes
(after China), the 2W household penetration level in the country is much lower at around
36% than in some of the other emerging markets such as Brazil, Indonesia, Thailand and
Taiwan. Also, the penetration rates differ between India’s rural and urban areas, with the
rural areas being under-penetrated by a factor of 3x as compared to larger cities. That
said, assuming that households having annual income less than Rs. 90,000 do not have
the ability to own a 2W, the existing household 2W penetration in India in the addressable
income segment of households (i.e. income greater than Rs. 90,000) is estimated to be
around 74%12. Prima facie, this appears to be a large figure and suggests that
penetration-driven growth may be difficult for the 2W industry to accomplish over an
extended time horizon. However, the fact that in absolute terms there are still 28 million
households at present in the primary target income segment that do not own a 2W, the
scope for penetration-led future growth continues to be reasonably large. Additionally, the
social trend in favor of nuclear families coupled with expected expansion of the target
income segment pie going forward is expected to further increase the number of
households which could be potential targets for the 2W industry.

Favorable demographic profile to continue to feed the consumption cycle

A large youth population potentially offers a sizeable market for consumer products.
India currently has a very favorable demographic profile with average age of 25 years,
which is 9 years younger than China, and more than 12 years and 19 years younger than
the US and Japan, respectively. As per estimates, around 33% of India’s population of 1.2

38
billion belongs to the age bracket of 20-40 years. Within this, the population of males,
which is the key target segment for motorcycles, is estimated to be 206 million; and the
population of females, which is the key target segment for scooters13, is estimated to be
189 million, suggesting existence of large size of the addressable market. On conversion
of even 20% of this youth population into 2W owners, a demand for ~80 million 2W is
estimated to get generated over the medium term. Further, with the youth population
estimated to increase to 229 million by 2015E, a cumulative increase of 11% over 2011,
the 2W consumption cycle appears strongly sustainable. This age group is also
characterized by a combination of earning power and high spending propensity, which
would increase the likelihood of conversion of potential ownership into actual ownership.

Interplay of growing urbanization and rising rural incomes augurs well for domestic
2W demand

Urbanization has drawn people living in India’s rural and semi-rural hinterland to cities
and towns at a steady pace. The need for mobility in most Indian cities and towns
therefore has increased substantially, yet the proliferation of public transport system has
not kept pace. This is where the utility of a 2W as the most affordable mode of private
transport comes to the fore. Empirical data suggests that there is a strong positive
correlation between urbanization and 2W demand, particularly in the initial stages of
economic growth. For instance, 2W penetration in stateslike Delhi, Tamil Nadu and
Maharashtra is much higher than the pan-India penetration due to the relatively higher
degree of urbanization in these states. With urbanization expected to rise progressively,
around 89 million people are estimated to be added to India’s urban spaces over the next
decade (78 million people are estimated to have got added over the last decade), which
could potentially be one of the most defining changes likely to transpire. Especially so,
since this would add fuel to allied drivers, including increase in proportion of working
women and rise in wage and salaried people that is expected to have a strong positive
impact on the demand for consumer durables.

Further, to the extent the rise in urbanization is contributed by migration of people from
rural and semi-rural regions, it would in turn support increase in remittances to the rural

39
markets enhancing rural incomes. Industry estimates suggest that around 60% of the rural
economy now depends on non-agricultural sources of income, such as remittances from
cities, trading, and employment in the manufacturing sector. While the increase in crop
prices during the last three years has left larger disposable incomes with rural customers,
non-agrarian sources of income have also played an important role in supporting
consumption by rural masses. The interactions between rural and urban centres could be
part of a virtuous cycle, as cities have benefits beyond their boundaries. This is validated
by studies which show that rural populations adjoining large urban centres have around
20% higher income than the rural average. Thus, the legacy of lower penetration levels in
the rural market, scarcity of public transport infrastructure and the rising income levels
would be positive triggers for rural 2W demand, going forward. At the same time, rising
salary levels in urban areas, shortening replacement cycles, increasing traffic congestion
in cities would be factors augmenting 2W demand in urban areas.

Replacement demand to be a key contributor to 2W industry volumes going

forward

According to estimates, around 50% of the total domestic sales of 2W are now made to
first time buyers, 30% to customers looking to upgrade from their existing vehicle, and
20% to buyers seeking a second vehicle for the household. The break-up suggests that
currently around 50% of the sales in the domestic 2W market are made to replacement
buyers. Industry estimates also suggest that the 2W ownership cycle has now shrunk to
less than five years. Considering that the industry has sold around 79 million 2W in the
domestic market since the turn of the century, the total replacement demand works out to
a fairly large number. Add to this the healthy growth in sales to first-time buyers in recent
years, driven in particular by sales to the rural market, the replacement opportunity could
only increase in the future. From the consumer perspective, although replacement
involves fresh capital spending, the inducement of upgrading to an improved technology
2W, having better performance, features and more attractive styling; complemented with
increased spending propensity are expected to be the prime ingredients feeding
replacement demand.

40
Influence of Supply Side Factors and State of Competition

With demand drivers appearing in place to support the domestic 2W industry growth, the
supply side enablers too will have a key role to play in catalyzing the growth process.
Amongst various factors, adequacy of manufacturing capacity; availability of assorted
products across 2W categories suited to diverse customer segments; accessibility of
customer touch points and effective customer communication strategies hold prime
importance in complementing the underlying demand. At the same time it also creates
some competition concerns which we need to analyze.

Large additional capacity creation necessary to meet the expected strong 2W

demand

The 2W Original Equipment Manufacturers (OEMs) have made regular investments over
the years to meet the consistent rise in demand. The installed capacity of the top three
player’s viz., Hero Honda Motors Limited (HHML), Bajaj Auto Limited (BAL) and TVS
Motor Company Limited (TVS), which together command a market share of over 80% in
the domestic 2W market, rose from 8.4 million units in 2005-06 to 12.9 million units in
2012-13 incurring a cumulative capex of around Rs. 3,700 Crore over this period.

However, barring the 2010-11 and 2011-12 periods, the overall capacity utilization in the
industry has remained healthy. Generally, the variance in production volumes between the
highest and the lowest production month during a year is around 25-30%, which implies
that capacity utilization in the region of 75-80% is the typical industry norm. However, in
2012-13, the capacity utilization of the top three players at around 87% was the highest in
the last several years, reducing the capacity buffer available. Notwithstanding the above,

41
the primary reason for the OEMs’ inability to fully meet the prevailing demand in 2012-
13 was the shortage of components from select suppliers, rather than in-house capacity
constraints. Further, in 2012-13, the industry had to grapple with labor shortage issues
due to insufficiency of skilled manpower which impacted production in labor intensive
units particularly. To cater to the expected rise in future 2W demand, many OEMs have
announced capacity expansion plans comprising of both Greenfield as well as Brownfield
investments, which is expected to make capacity utilization revert to its historical levels.
As per estimates, to achieve industry volumes of 21-23 million units by 2015-16
(domestic and export), the OEMs will need to invest around Rs. 4,500 Crore over the
next five years for expanding their in-house capacity.

42
Distribution network: Unfair trade practices on the part of firms?

To get the best returns from the distribution network, an OEM strategy that balances the
necessity to expand customer touch points while ensuring adequate dealer profitability
and minimal channel conflict is crucial. Ideally, the distribution network of an OEM in a
city should be large enough to provide both sales as well as service convenience to
customers; yet it should be small enough such that every outlet could have optimum
capacity utilization. Considering that the overall 2W market continues to be under
penetrated, most OEMs have maintained their focus on expanding their sales-cum-service
outlets especially in the semi urban and the rural areas. Current established dealers have
helped OEMs scale up their networks quickly by setting up satellite dealerships along
with service facilities in the neighboring smaller towns. As per estimates, the rural market
now accounts for around 45% of total domestic 2W sales volumes elevating their
significance in the OEMs’ business strategies.

Estimated Dealer Margins Comparison – Bajaj Auto Vs Yamaha

Price based competition and Vicious circle

43
The Indian two wheeler market is increasingly becoming a price warfield17. Everyone
and their competitor wants to win the title of the 'World's cheapest bike' and the customer
has become the King. But the question remains if this price based competition is good for
the health of the industry? Isn't everyone eating their own margins in the quest for greater
market share and farther market expansion? And where does this leave smaller players
like LML (going through some very tough times as of now), Kinetic (good scooters,
questionable field network, trying hard in motorcycles) and even Yamaha and TVS? A
dominant firm like Hero Honda or Bajaj Auto can arm twist suppliers to deliver parts
cheaper, which the suppliers won't mind doing considering the volumes that these two
dominant player offer. Both the Munjal and Bajaj families are also typical in the way they
promote companies run by their brothers, cousins, in-laws etc. etc. So Bajaj Auto can
always ask for cheaper rates from a Varroc or Auragabad Electricals while Hero Honda
can do the same with MAC or Munjal Showa or Omax Auto. But what happens to LML
(still makes a lot of its components, very archaic), Kinetic (mostly independent
suppliers), TVS (Sundram Group suppliers, who anyways act independent, very
professional but is it the best way forward?), Yamaha (independent suppliers) or a new
entrant like Suzuki (they will buy components from anyone except a Munjal family or a
Sundram company)? Without volumes, one is not in a position to get the best prices.
Without the best component prices, the price of the final product goes up. But then these
small players have to fight Bajaj Auto. So they reduce the selling price of the bike which
implies the decline in the margins for these firms.

44
 PRIMARY FINDINGS AND ANALYSIS

For Customers

Q1. How many brand of two-wheeler do you know?

16% respondents know two brands however 33% respondents know four brands

45
Q2. Which type of two wheeler you prefer most?

40% respondents prefer regular motorcycles however 26% respondents prefer step thru’s

46
Q3. Which attributes do you like most in your two-wheeler?

28% respondents like stability at higher speed however 21% respondents like mileage

47
Q4. What is your source of finance?

17% respondents collect money from auto loan however 19% respondents collect money
through debit card

48
Q5. What are the external factors that influence you about purchasing bike?

26% respondents mostly influenced by family members however 18% respondents

mostly influnced by social factor

49
Q6. Which brand right now you are having?

20% respondents have Hero Honda however 18% respondents have Bajaj

50
Q7. Should Company go for innovation in context to development of new bike?

79% respondents replied yes that company should go for innovation in context to
development of new bike

51
Q8. While going for the development of new bike which point the company should
keep in mind?

22% respondents replied that company should focus on less fuel consumption however
18% respondents replied that company should focus on stylish design

52
Q9. According to you which company`s model you like most and why?

21% respondents replied that they like Hero Honda however 18% respondents replied
that they like Yamaha

53
For Retailer

Q1. Do you deal in two wheelers?

100% respondents replied yes that they deal in two wheelers

54
Q2. In which of the following brand do you deal?

22% respondents replied that mostly they deal in Hero Honda however 24% respondents
mostly deal in Yamaha

55
Q3. Which brand is more demanding by the customer?

23% respondents replied that Hero Honds is more demanding by customer however 21%
respondents replied that Yamaha is more demanding by the cutomer

56
Q4. What kind of feature mostly customers demand while they come to purchase
two wheeler?

25% respondents replied that customer mostly demand for good quality two wheeler
however 20% respondents replied that mostly customer look for low fuel consumption

57
Q5. Do customers demand for low price vehicle?

67% respondentsn replied yes that customers demand for low price vehicle

58
Q6. Are they ready to buy good quality two wheeler at any price?

51% respondents replied yes that cutomer are ready to buy good quality two wheelers at
any price

59
Q7. Do they prefer brand name while buying a two wheeler?

90% respondents replied yes that they prefer brand name

60
Q8. Do they consider after sale services?

85% respondents replied yes that they consider after sale service

61
 RECOMMENDATIONS

 The two wheeler companies should focus on gearless scooters. The market share
of gearless scooters is increasing at a healthy rate. Bajaj is virtually absent in this
range that caters to the needs of women and families. Presently Honda, Hero
Honda and TVS are big players in this segment.

 Entry into four wheeler segment Bajaj has entered into a joint venture with
Renault-Nissan in the development of a small car priced at $3000. This is a
significant move because it directly competes with Tata NANO. Bajaj has also
displayed its small car prototype in the recently held auto expo. It promises
double the mileage as compared to any car in the economy segment and is also
considering the option of introducing Diesel and LPG variants. The four wheeler
segment will also be able to hedge any risk that might arise because of the two
wheeler industry and would profit from retaining consumers switching from two
wheelers

 Scaling Up Service Centers Companies need to scale up its service centers both in
numbers and in capacity. Keeping in line with its growth target for the next 5
years, the service centers should not only cater to two wheelers but should also be
upgraded to cater to the needs of four wheelers that companies plans to launch.

 Focus on Easy Credit Lending

 Investment in Research and Development

 Focus on Exports and Global Market

62
 CONCLUSION & IMPLICATIONS

Cutomers

16% respondents know two brands however 33% respondents know four brands

40% respondents prefer regular motorcycles however 26% respondents prefer step thru’s

28% respondents like stability at higher speed however 21% respondents like mileage

17% respondents collect money from auto loan however 19% respondents collect money
through debit card

26% respondents mostly influenced by family members however 18% respondents

mostly influnced by social factor

20% respondents have Hero Honda however 18% respondents have Bajaj

79% respondents replied yes that company should go for innovation in context to
development of new bike

22% respondents replied that company should focus on less fuel consumption however
18% respondents replied that company should focus on stylish design

21% respondents replied that they like Hero Honda however 18% respondents replied
that they like Yamaha

For dealers

100% respondents replied yes that they deal in two wheelers

22% respondents replied that mostly they deal in Hero Honda however 24% respondents
mostly deal in Yamaha

23% respondents replied that Hero Honds is more demanding by customer however 21%
respondents replied that Yamaha is more demanding by the cutomer

63
25% respondents replied that customer mostly demand for good quality two wheeler
however 20% respondents replied that mostly customer look for low fuel consumption

67% respondentsn replied yes that customers demand for low price vehicle

51% respondents replied yes that cutomer are ready to buy good quality two wheelers at
any price

90% respondents replied yes that they prefer brand name

85% respondents replied yes that they consider after sale service

64
 BIBLIOGRAPHY

 Ardiyok, S. “Aftermarket theories in Competition Law and Regulation on Motor

Vehicles, International Journal of Business, Management and Economics, Vol. 1, No.
2, 2005.

 BAJAJ AUTO LTD- RIDING TOWARDS DARKNESS, : 23rd March 2011 Creating
Successful New Products: Challenges for Indian Industry

 Rishikesha T. Krishnan & Ganesh N. Prabhu, 31 July 1999 Government of India.

1980. Sixth Five Year Plan (1980-85). New Delhi: Planning Commission.

 Shapiro, C., “Aftermarkets and Consumer Welfare: Making Sense of Kodak”,

Antitrust Law Journal, Vol. 63, 1994.

 The Evolution and Structure of the Two-wheeler Industry in India: Sunila George
(IIM Bangalore), Raghbendra Jha (ANU, Canberra), Hari K. Nagarajan (IIM
Bangalore and NCAER, Delhi), 2001 The State of Competition in the Indian
Manufacturing Sector

 T.A. Bhavani and N.R. Bhanumurthy, Institute of Economic Growth, March 2007
TRADE LIBERALIZATION AND PRICE-COST MARGIN IN INDIAN
INDUSTRIES (B.N. Goldar and S.C. Aggarwal, 2005)

 TWO-WHEELER INDUSTRY: GROWTH DRIVERS INTACT, Anjan Ghosh ,

Subrata Ray, Jitin Makkar (ICRA), June 2011 Two-wheeler industry in India,
enrich.ch-india.com, 07 April 2009

65
 COPY OF THE QUESTIONNAIRE

For Customers
Q1. How many brand of two-wheeler do you know?
One Two Three

Four Five More than Five

Q2. Which type of two wheeler you prefer most?

Step thru’s Mopeds and Mokicks
Scooters Regular Motorcycles
Enfields Diesel Bullet

Q3. Which attributes do you like most in your two-wheeler?

Stability at higher speed Pick up
Mileage Fuel Consumption

Q4. What is your source of finance?

Auto Loan Salary
Debit Card Credit Card

Q5. What are the external factors that influence you about purchasing bike?
Family Member Social Culture
Economic Business Need

Q6. Which brand right now you are having?

Bajaj Hero Honda Suzuki Motor
Mahindra Two Wheeler Kinetic Motor LML India
Yamha

Q7. Should Company go for innovation in context to development of new bike?

66
 Yes No Not Sure

Q8. While going for the development of new bike which point the company should
keep in mind?
Stylish Design Fast Pickup Less fuel Consumption
Comfortable Easy to drive features
Cost Effective

Q9. According to you which company`s model you like most and why?
Bajaj Hero Honda Suzuki Motor
Mahindra Two Wheeler Kinetic Motor LML India
Yamha

67
For Retailer
Q1. Do you deal in two wheelers?
Yes No

Q2. In which of the following brand do you deal?

Bajaj Hero Honda Suzuki Motor
Mahindra Two Wheeler Kinetic Motor LML India
Yamha

Q3. Which brand is more demanding by the customer?

Bajaj Hero Honda Suzuki Motor
Mahindra Two Wheeler Kinetic Motor LML India
Yamha

Q4. What kind of feature mostly customers demand while the come to purchase two
wheeler?
Good Quality Stylish Comfortable
Long Lastic Low Fuel Consumption Easy to drive

Q5. Do customers demand for low price vehicle?

Yes No

Q6. Are they ready to buy good quality two wheeler at any price?
Yes No

Q7. Will they prefer brand name while buying a two wheeler?
Yes No

Q8. Will they consider after sale services?

Yes No

68