Indian Two Wheeler Industry

History In 1948, the Bajaj Auto company began saleing two-wheelers by importing. Bullet had a close competition with another sturdy bike named Rajdoot (Mid 50s). During the first half of the '60s, three companies namely Mopeds India Ltd (1965), SZUL Gwalior (1964) and Pearl Scooters Ltd (1962) entered the mopeds arena. Kinetic Engineering Limited launched the moped Luna in 1972. In 1972 Bajaj launched Bajaj Chetak Scooter.Bajaj Chetak has been hugely responsible for adding momentum to the transport system of the country. The two-wheeler market was opened to foreign companies in the mid 1980s. In 1982 TVS Suzuki Motor introduce 1st 100-cc motorcycle.

Evolution of the two wheeler industry in India is usefully split up into different periods a) 1960 1969 The automobile industry being classified as one of importance under Industrial Policy Resolution of 1948. A firm required licensing approval to open a plant. Capacity of production determined by the Government.

b) 1970 1980 During this period overall growth rate was high (around 15% per annum). This was the result of the steep oil price hikes in 1974 following which two-wheelers became popular modes of personal transport introduction of regulatory polices such as MRTP and FERA. The scooter and moped segments on the other hand were technologically more self-sufficient.

c) 1981 1990 Foreign collaborations were allowed for all two-wheelers up to an engine capacity of 100 cc. This prompted new entries majority of which entered the bike segment. These reforms had two major effects on the industry: 1. Licensed capacities went up to 1.1 million units per annum overshooting the 0.675 million units per annum target of 6th Plan. 2. Weaker players died out.

d) 1991 Onwards The two-wheeler industry was completely deregulated through the liberalization of the economy in 1991. The two-wheeler industry is characterized by; a) Increase in the number of brands available in the market which caused firms to compete on the basis of product features. b) Increase in sales volumes in the motorcycle segment.

Present Scenario of the Two-wheeler segment is the most important componentautomobile Sector.

Hero Honda, Bajaj and TVS are the Indian companies and Yamaha & Honda are international automobile brand. Hero Honda is the biggest player in this sector in India as well as in the world. India manufactures about 38,00,000 2-wheeler annually.

India ranks second in the production of two wheelers. The demand for scooters is price sensitive compared to motorcycles. Demand for bikes and scooty increasing continuously.

Operating Characteristics 2nd largest in the world. Hero Honda and Bajaj Auto are two of the Indian companies that top the list of world companies manufacturing two-wheelers. The composition of the industry consists of motorcycles, scooters and mopeds. 90% are less than 125 cc. Common means of transport in rural, town and cities. Increased availability of cheap consumer financing in the past 3-4 years. Fuel-efficient and low maintenance models. Increasing urbanisation, which creates a need for personal transportation Difference between two-wheeler and passenger car prices makes twowheelers the entry level vehicle. Increasing number of models with different features to satisfy diverse consumer needs.

Major Players

Market ShareTVS (7%) Yamaha (5%)

HMSI (9%)

Hero Honda B ajaj HS M I TV S Y am aha

Bajaj Auto (18%) Hero Honda (59%)

Segment Wise Market ShareExecutive Segment (40,000-50,000 Rs)HMSI (6%) Bajaj Auto (20%) TVS (1%)Hero Honda Bajaj HMSI TVS

Economy Segment (30,000-40,000 Rs)TVS (24%) Hero Honda (34%)

Hero Honda (70%)

Hero Honda Bajaj TVS

Premium Segment (> 50,000 Rs)TVS (13%) Hero Honda (22%)

Bajaj Auto (42%)

HSMI (10%)

Hero Honda Bajaj HS MI TV S

Bajaj Auto (55%)

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. The world's single largest two wheeler company. One of the most successful joint ventures worldwide. 7th most admired brand of India as ICMR survey. Over 19 million Hero Honda two wheelers running on Indian roads today. Hero honda posts its strongest-ever quarter in Q1 10.

SWOT AnalysisStrengthsHero Honda introduced First stroke bike in the Indian market. Hero Honda gives 80 Km/Liter Avg. Huge sale network (3500 Dealers). Better sale service. It has the highest share in automobile sector. It has a good brand image. It gives better service for customers. Best customer preference. Debt equity ratio is only 0.1. The company has clarified about its intention of setting a third plant in addition to its existing two plants.

Weakness1. Suppose to be very sophisticated. 2. Not fit for ruler India. 3. They have big gap between cubic capacities of its products. 4. Its market share is reducing from last few years. 5. Spare parts are too costly.

Opportunities Hero Hondas the first manufacture to launch eco friendly bikes with 4-stroke engines. They have attained a stronger good will and popularity in the industry and the consumers. They should go in new segments of bikes.

Cont. There is large no. of young consumers in the market. Company has to focus on them. They have big opportunities in heavy bike segments. As government polices are amended against pollution in metro cities, Hero Honda being 4 stroke bike manufacture have great opportunities to explore its new innovations and technologies.

ThretesMain threats to Hero Honda are their competitors. The cost of the product is very high in comparison to other companies. Decreasing market share.

Product Range

Hero Honda CD 100,CD 100 SS,CD Deluxe 97.cc,7.5bhp@8000rpm,4 stroke engine

Hero Honda Passion, Passion Plus 97 CC, 4-stroke engine, singale cylinder. 7.4 bhp @8000 rpm

Hero Honda Ambition 135cc,133 cc 135 cc , four-stroke engin,single piston, kick start 11 bhp

Hero Honda CD Dawn 97 CC,7.5 bhp @8500 rpm, 4 stroke engine

Hero Honda Glamour, Glamour F1 124.7 cc , 4-stroke cycle, single piston, kick start, 9 bhp@7000 rpm

Hero Honda Splendor,Splendor +, Super Splendor, Splendor NXG 124.7 CC,9 bhp @ 7000 rpm, 4 stroke engine

Hero Honda Achiever 149.1 CC, 4-stroke engine, single cylinder.13.4 bhp @ 8000 rpm

Hero Honda CBZ,CBZ Extreme 149.2 cc ,4-stroke cycle, single piston, kick start Power: 14.2 bhp hp @ 8500 rpm

HERO HONDA HUNK 149.2 cc ,4-stroke cycle, single piston, kick start Power: 14.4 bhp @ 8500 rpm

Hero Honda Karizma 225 4 Stroke,12.68 KW (17PS) @ 7000 rpm,223 cc

Marketing Strategy Hero Honda Motors is spreading its wings to capture the commuting bikers' imagination in rural India. Hero Honda plans to cover 100,000 of the 600,000 villages in the country under a campaign named Har Gaon, Har Aangan Hero Honda has 3500 dealers and service outlets Hero Honda followed a "Hub and Spoke System" in distributing its products in rural areas. The company gave a dealership to one dealer who would take care of a district. Hero Honda promoted its products aggressively during festive seasons. Hero Honda has roped in Hrithik Roshan and Saurav Ganguly as its brand ambassadors. Hero Honda organizes free service camps every year.

Cont.. Hero Honda with the help of ICICI Bank provides loan to the customers & also provide easy monthly installment scheme to customers. Hero Honda gives huge commission to their dealers. 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. 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.

Brand AmbassadorSaurav Ganguly Hrithik Roshan

Splendor

Super Splendor

Splendor NXGBharosa Bhi Style Bhi

HunkBig Bull

Karizma

25 Year Celebration

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. 15th most admired brand of India as ICMR survey 2009.

SWOT AnalysisStrengthsHighly 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).

Opportunities Double-digit growth in two-wheeler market. Untapped market above 180 cc in motorcycles. More maturity and movement towards higher-end motorcycles.

Cont.. The growing gearless trendy scooters and scooterette market. Growing world demand for entry-level motorcycles especially in emerging markets.

Threats1. The competition catches-up any new innovation in no time. 2. Threat of cheap imported motorcycles from China. Margins getting squeezed from both the directions (Price as well as Cost).

Product Range

Bajaj Platina Engine- 100 CC, four stroke, single piston

Bajaj CT 100 100 CC,8.2 bhp,7,500 rpm

Bajaj Platina 125 DTS-Si 125 CC, four stroke, single piston

Bajaj Discover DTS-i 120 cc and 135 cc,Air-cooled, four-stroke cycle, single piston

Bajaj XCD 125 cc and 135 cc, Twin spark Aircooled, four-stroke cycle, single piston

Bajaj Kawasaki Wind 125 124.6 cc, four-stroke cycle, single piston

Bajaj Pulsar DTS-i 150 cc/180 cc/200 cc/220 cc Aircooled, four-stroke cycle, Upto 20 bhp (14.6 kW) @8500 rpm

Bajaj Avenger DTS-i 178.6 cc Air-cooled, four-stroke cycle, single piston Power: 16.5 hp @ 8000 rpm

Marketing Strategy By the early 2000s, BAL lost its title of 'India's largest two-wheeler company' to Hero Honda Ltd. In an attempt to recapture market share, BAL decided to reorient its business, launching a series of new motorcycle models, which halted the downward trend in sales. It did not want to give up on scooters either. Bajaj Auto unveiled the new corporate identity on the 15th of January at the Auto Expo 2004, New Delhi. Corporate strategy is based on the guiding philosophy termed as 'Distinctly Ahead' The marketing strategy was fine-tuned and new product initiatives were planned.

Cont. It launched new scooter models and upgraded existing ones. To increase its volumes in the entry level segment of the motorcycle market, the Company has launched a new model CT-100 in May 2004. Project 110 percent was launched to spearhead Bajajs growth in the future. The project was so named since the aim was to increase the companys topline by 100 percent and bottom line by 10 percent. Around 300 dealers are a part of this portal and use it extensively. For example, dealers can log in to the system and place orders online. Bajaj has come out with variety of ads and were always successful in their advertisements.

Journey Of Bajaj

TVS Motors is the third largest company. It is the only Indian company without a foreign collaboration in the two-wheeler industry. TVS Motors Ltd. originally incorporated in 1982 to manufacture two-wheelers in collaboration with Suzuki Motors of Japan. 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'.

SWOT AnalysisStrengths Ability to understand customers needs and wants. Recognized and established brand name. Effective advertising capability.

Weaknesses They have big gap between cubic capacities of its products. Its market share is reducing from last few years. Bikes are not attractive as compare to there competitors.

Opportunities Global expansion. Expansion of target market (include women). Become Indias leader in the scooter market.

Threats Suzuki Motorcycles can take away market share and cause joint venture to go sour. Bajaj Motors and Hero Honda is a strong competitor.

Product Range

Star City 4Stroke,7.5 bhp / 5.50 kW @ 7500 rpm, 99.7 CC

Centra 4 Stroke,7.5 bhp / 5.59 kW @ 7500 rpm,99.8 cc

Victor, Victor EDGE, Victor GLX 4Stroke,10 bhp / 6.77 kW @ 7500rpm,100cc/124.8 CC 50

TVS Flame 4Stroke,10.5 bhp@ 7500 rpm, 124.8CC

Apache Self Start Manufacturer- TVS Motors Ltd. Engine- 150 CC,13.7 bhp@8,500 rpm,torque of 8.05 Nm at 6000 rpm

MARKETING STRATEGY The year 2005-06 was a landmark year for TVS Motor Company when it post a 15% growth. The Overdrive magazine of April 2006 has rated TVS Motor Company Limited as the best in Quality against competition. Better quality and product features at attractive prices. Stylistic features such as alloy wheel, disc brakes and tachometer. Greater focus has been given to improve the styling capability. The customer loyalty programme - Miles and Smiles, launched during 2005. The Company plans to improve its position in the executive segment by launching variants of this model.

The company network of over 2000 customer touch points consisting of 541 main dealers and about 1500 service centers. Company test rides and sales training to all involved parties 1. Marketing and sales staff 2. Dealers (Leading to personal involvment to sales) 3. Dealers sales and service people 4. Private garage mechanism Shootouts by auto-magazines with top ratings across, against leading competitor brands Leading to Sales on Wheels 1. Demonstrative method to show product benefits & superiorities 2. Customers personal feel of the bike during the sales talk

Cont.

Star City

Big Dreams

Victor EDGE

TVS Flame

Apache

Honda Motorcycles and Scooters India limited entered the Indian market with Honda Unicorn in 2004. It has a joint venture with Hero cycles named Hero Honda. 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. They were in a tie up with the Firodias owned Kinetic group However in the late 90s they parted ways after problems arose over marketing strategies issues.

SWOT AnalysisStrength Reliable brand name. Affordable price. Honda have a big share of market in scootreats segment. Honda is the first company who introduced the technology of central shock absorption in India. Honda having high tech engines. HMSI is the subsidiary company of Honda Motors Ltd. Which is the largest company in the proposed sector.

Weakness Less number of service center. Market share very less as compare to there competitor. Spares parts are not easily available. Low product range. Maintenance cost is very high.

Opportunity Increase in product range. Untapped market above 180 cc in motorcycles. More maturity and movement towards higher-end motorcycles. Honda can be use brand image of Hero Honda.

Threats There is high competition in the market. Threat of cheap imported motorcycles and components from China.

Product Range

Unicorn 4 Stroke,13.3 bhp / 9.9 kW @ 8000 rpm,149.1 cc

Shine Disk 4-Stroke,10.3 bhp @ 7500 rpm,124.6 cc

Stunner CBF 4-Stroke, Air-Cooled Engine,124.7 cc

CBR 4-Stroke,Liquid cooled Engine,150 cc

Marketing Strategy Honda strategy was strength on technology. It should be the newest one and always one step before competitors. Honda followed principle of developing market step by step. Knowing clients needs Honda : Offer a multi product line Took leadership in product innovation Exploit opportunities for economies of mass production Company is investing in productivity more then the actual needs just to be sure that they can grow faster than competition & can follow market potential if needed. Honda starts a highly automotive plant with a capacity 10 times in excess of demand. Honda become the most innovative company in whole motorcycle industry -company which lead changes and create/ identify new untapped market segments.

Unicorn

Shine

.Yamaha Motor Corporation is the auto mobile companyof 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 asa 100% subsidiary of Yamaha motor corporation, Japan

.Corporate Mission - "Creating Kando - Touching YourHeart"

SWOT AnalysisStrengths Yamaha motors India is the subsidiary company of Yamaha motors ltd, which is the MNC. company having a good brand name. Good share in Indian two wheeler automobiles sector. It is the one of the oldest company in the Indian market. Bikes are available at very cheap price. Popular in rural area.

Weakness Bikes are not attractive. No presences in scooter segment. No presences in above 150cc bike segment. Decreasing market share. Limited network.

Opportunities Above 150cc bike segment having full of opportunities. Set targets on scooters segment. Target youth. Large market is available for consumption.

Threats Large no, of competitors present in the market. New companies are watching Indian market. People are going for good average and stylish bikes. E-bikes are also in the market.

Product Range

Alba 4Stroke, 7.6 PS @ 7500 rpm, 106 cc

G5 4Stroke, 7.6 PS / 5.59 kW @ 7500 rpm, 106 cc

Gladiator DX 4Stroke, 8.0 kW @ 7500 rpm, 123.7 cc

Crux S 4Stroke, 7.3 PS / 5.59 kW @ 7500 rpm, 106 cc

YZF R15 4Stroke, Liquid Cooled Engine,4 valve/cylinders, 149.8 cc

FZ 16/S 4Stroke, 2valve/cylinder, 153 cc

FAZER 4Stroke, 2 valve/cylinder, 153 cc

YZF R1 4 Stroke, Liquid Cooled Engine , 4 parallel cylinders, 998 cc

Marketing Strategy Its business strategy designed to balance value, profitability, and growth. India Yamaha Motor has registered an impressive growth in sales during August 2009 as compared to the corresponding period last year. It sold 19508 units in August 2009 as against 11974 units sold in August last year. Yes Yamaha strategy which is designed to bring customers smile and takes care of all 4Ps of marketing. Yamaha Bike Station all across the country which is a dealership designed and specially trained to get customers smile. Company has 430 dealers in India. Yamaha is making all effort to win Customer trust and make them SMILE. Company started an auto-finance arm Bussan Auto Finance along with Axis Bank and Mitsui & Co. Ltd.

AlbaAbhi Gaya Abhi Aaya

Gladiator

The Enfield Bullet is still essentially hand made utilising very little assembly line activity. Bike has seen minor modifications and major quality improvements since it was first produced in India in 1955. The current range of Royal Enfield motorcycles are built on two engine platforms. The current range of Royal Enfield motorcycles have sport features such as Transistor Controlled Ignition, Disc Brakes, electric start and gas filled shock absorbers.

Product Range

Bullet 350 Standard 4-Stroke, 346 cc, Air cooled, SingleCylinder, 13.42KW@5625rmp

Electra 4S/5S 4-Stroke, 346 cc, Air cooled, Single Cylinder,13.42KW@5625rmp

Machismo 350/500 4-Stroke, 346 cc, Air cooled, Single Cylinder, 13.42KW@5625rmp

Thunder Twin Spark 4-Stroke, 346 cc, Air cooled, Single Cylinder,13.42KW@5625rmp

BCG Matrix of IndustrySplendor FZ Pulsar

Victor Crux

Star City

Apache

Unicorn

CT 100

Passion

The scooter and the scooterette share in the Indian two wheeler market is 13.4%. The exports in this segment are mainly South East Asian countries and occupy a one-fourth share in the total two wheeler exports from India The age old metal bodied geared scooters may be heading towards a timely death in the country in due course of time, then the silver lining, the age old set of two wheels could re-invent itself in the form of moto-scooters. These new set of wheels with their peppy performance is meant to draw the attention of the metro sexual two wheeler buyers. In terms of power Kinetic Blaze is only two Bhp less than the Bajaj Pulsar.

Market ShareHero Honda (14%)

TVS (16%)

Bajaj (7%)Hero Honda B ajaj HS M I TV S

HSMI (61%)

Honda Products

Activa 4-stroke, air cooled,7 bhp @ 7000 rpm,109 cc

Honda Aviator 4-Stroke, Air cooled 102 cc 7bhp @7000rmp

Eterno 4-stroke,6.0 KW (8.2 bhp) @ 6000 rpm, 147.7 cc

Dio 4 Stroke, 7bhp @7000rpm,102cc

Activa

Kinetic Engineering is credited with bringing in India the concept of personalized transport. Kinetic motor began in 1984 with collaboration with Honda motor of Japan to sell advanced scooters in India. Recently it is acquired by Mahindra. Kinetic has a dealership network of more than 400 dealers and authorized service centers across the country. Kinetic produces a complete two-wheeler portfolio which ranges from mopeds, scooterettes, scooters to bikes.

Product Range

Sym Flyte 4-Stroke,124.6cc, Air cooled,Single Cylinder

Blaze 4-Stroke, 125 cc, Air cooled, Single Cylinder

Nova EX/ 135 115/135 cc, 8.5 bhp@6500rmp

Sym Flyte

TVS Product Range

Scooty Pep Plus 4-stroke, 3.68kw (5 bhp) @ 6500rpm 87.8 cc

Streak 4-stroke, Air cooled, 3.68kw (5 bhp) @ 6500rpm, 87.8 cc

Scooty Teenz Manufacturer TVS Motors Ltd. Engine 2 stroke, 3.5 bhp @ 5500rpm, 60 cc

Pep Plus

Streak

Why sit behind

Hero Honda Pleasure

Hero Honda Pleasure 4-Stroke, Air cooled102 cc, 7bhp @ 7000rpm, torque 0.78 kgm @5000 rpm

PleasurePriyanka Chopra as Brand Ambassador

Bajaj product Range

Bajaj Wave 109.7cc, 8 bhp

Blade 4-Stroke, 100 cc, 22 bhp @ 5400 rmp

Bajaj Kristal Manufacturer- Bajaj Auto Engine- 95 cc, 5.38 KW @ 7500 rmp

Yo Smart Yo Smart, the cost-effective and eco-friendly scooter from Electrotherm India Ltd Capacity to take loads upto maximum 75 kilograms & top permissible speed of 25 kmph Characteristics: 1. Electrical motor fitted in real wheel hub 2. No transmission losses 3. Quick power, Noise free 4. Requires no petrol, 75 km range/charge mileage 5. Compact dimension, No engine 6. 6-8 hrs of charge duration, Less weight

Overall Dimension Weight Carrying Capacity

1750 X 615 X 1050 mm 75 Kg

Motor Power < 250 W Motor Permanent Magnet Brushless DC Motor

Battery Type Maintenance-free VRLA Deep Discharge, 20Ah Speed Charging Duration Range / Charge Mileage < 25 Km/hr 6 - 8 hours 75 Km

BCG MatrixActiva

Pep

Streak

Teenz

Pleasure

Yo Smart

First moped was launched by Kinetic group in 1972 named Luna. There has been a consumer preferential shift from mopeds to scooters and now motorcycles. Moped segment is primarily dominated by TVS Motors with a market share of >90%. There is a less scope remain for segment. Mopeds are used by low class people. Some other players are 1. Kinetic Motors 2. Hero Honda 3. Bajaj 4. Hero

TVS Moped

TVS XL 2-Stroke ,69.9 cc,3.5bhp @ 5000 rmp

TVS Luna 2-Stroke,Single Cylinder,59.5 cc

Kinetic Moped

V2/V2 XL/V2 80 Single Cylinder,2-Stoke 58.2/49.68/73.08 cc

Kinetic 100/DLX 4-Stoke 97.2 cc,5.1bhp@6500rmp

Luna/ Luna TFR 2-Stroke,Single Cylinder,59.57 cc

Kinetic Magnum 2-Stroke,Single Cylinder,59cc

Kinetic Safari Manufacturer- Kinetic Motors Engine- 2-Stroke,Single Cylinder,72 cc

Hero Honda MopedHERO HONDA STREET Manufacturer- Hero Honda motorcycle Ltd Engine- 97.2 cc, Four Stock Engine

Bajaj Moped

M 80 (4S/Major) ManufacturerBajaj Auto Engine- 2Stroke,74.08cc, 4.5 bhp@6000rmp

Hero Motors Hero Motors is a scooter and moped manufacturer located in Delhi. This company is part of the Hero Group that owns Hero Cycles and Hero Honda Motors. By 1975, it was the biggest bicycle manufacturer in India. In 1988 a new petrol efficient machine named Hero Punch was introduced to the market. In 1996, a large wheeled scooter with a choice between 50 and 75cc engines was introduced to the market. Today, Hero Motors division continues to be the worlds largest producer of 2 wheelers. Hero Motors has 20 companies with 300 suppliers. It has 5000 outlets.

Product Range

Hero Ankur Padel / Kick Start 49cc, 2.4 bhp@4500rmp

Hero Carry Kick Start 4-Stroke, 59.5cc, 4.6 bhp @ 8500rmp

Hero Panther Kick Start 4-Stroke, 72cc, 4.6 bhp@8500rmp

Hero Effy Kick Start 4-Stroke, 72cc, 4.6 bhp @ 8500rmp

Hero Puch 65 cc 2 - Stroke

Hero Envoy Kick Start 4-Stroke, 72cc, 4.6 bhp @ 8500rmp