PDCS MINOR PROJECT

“COMPARATIVE STUDY OF HERO HONDA MOTORS WITH BAJAJ AUTOMOBILES”

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT OF BACHELOR OF BUSINESS ADMINISTRATION (BBA)

SUBMITTED TO SUBMITTED BYMRS. REKHA GULIA SHAMBHU

ENROLLMENT NO-13319201709

SESSION: 2009-2012

LINGAYAS LALITA DEVI INSTITUTE OF MANAGEMENT AND SCIENCE

MANDI, NEW DELHI

ACKNOWLEDGEMENT

The present work is an effort to throw some light on “Comparative Study of Hero

Honda Motors with Bajaj Automobiles”. The work would not have been possible to

come to the present shape without the able guidance, supervision and help to me by

number of people.

With deep sense of gratitude I acknowledged the encouragement and guidance

received by MRs. REKHA GULIA.

I am also thankful to all my faculty of my college for extending his full sopport to me

during the making of the project. I convey my heartful affection to all those people

who helped and supported me during the course, for completion of my Project

Report.

SHAMBHU

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TABLE OF CONTENTS

1. ACKNOWLEDGEMENT

2. EXECUTIVE SUMMARY

3. OBJECTIVE OF STUDY

4. OVERVIEW OF AUTO MOBILE INDUSTRY IN INDIA

5. INTRODUCTION TO THE INDIAN MOBIKE INDUSTRY

i. COMPANY PROFILE HERO HONDA

ii. HERO GROUP ACHIEVEMENTS

iii. INTRODUCTION TO HERO HONDA PRODUCTS

iv. PRODUCT PROFILE OF HERO HONDA

6. MARKETING STRATEGIES OF HERO HONDA MOTORS

i. BAJAJ AUTOMOBILES MILESTONES

ii. BAJAJ PRODUCTS

7. RESEARCH METHODOLOGY

8. INDUSTRY ANALYSIS

i. ANALYSIS OF QUESTIONNAIRE

ii. REASON FOR DISSATISFACTION

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9. SWOT ANALYSIS

i. SWOT ANALYSIS OF BAJAJ AUTOMOBILES

ii. PERT ANALYSIS OF AUTOMOBILE INDUSTRY

iii. ECONOMICAL ANALYSIS

iv. FINDINGS

10. CONCLUSION

11. BIBLIOGRAPHY

12. APPENDICES

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EXECUTIVE SUMMARY

In view of the increasing competition due to globalization and the expansion of the

economy .All industries need to constantly add more attributes and features which

consumer wants in two wheelers of their company .In context company had to adopt

more innovative and consumer friendly attributes so that there product should be more

popular among the customers.

Today in this present world the HERO HONDA & BAJAJ AUTOMOBILES in two

wheeler segment of India and are leading as the world number one two wheeler

company from the past three consecutive years.

The research assingned to was to study the parameter ore the features that effect most

of the customer satisfaction in the Hero Honda motors limited & BAJAJ Automobiles

.There are many features which effect the two wheeler company but important among

all of them are the following :-

(1) Fuel efficiency

(2) Maintenance

(3) Availability of the product

(4) Resale value

(5) Look and style

(6) Image and brand

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OBJECTIVE OF STUDY

The objective of my research project is

To study the company profiles of HEROHONDA MOTORS & BAJAJ

AUTOMOBILES in regard to their history, market shares and product i.e. Bikes.

To make a comparative analysis of the bikes of HERO HONDA & BAJAJ.

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OVERVIEW OF AUTO MOBILE INDUSTRY

IN INDIA

A two-wheeler is used as a personal/family vehicle or a goods carrier in the

developing countries, whereas it is confined to sports/racing (heavy motorcycles) or

short distance shopping (mopeds) in developed countries.

The world two-wheeler market is dominated by Japan. Japanese manufacturers

account for around 65% of the total two-wheeler production in the world. However,

production within Japan has been declining due to lower domestic demand and shift

in manufacturing base outside the country. Japan is also the world's largest exporter of

two-wheelers in the world controlling around 75% of the world trade. Its major

markets are China, USA and Europe. In terms of player positions, Honda Motors

Corporation, Yamaha Motors and Suzuki Motors Corporation share the top three slots

in the world two-wheeler market. The table below shows the production and sales

figures of motorcycles and scooters in Japan during the past decade More than 50% of

the production in Japan is exported out of the country. This scenario contrasts directly

with the Indian scenario. In India, only about 2% of the production in FY99 was

exported

The Asian continent is the largest user of two-wheelers in the world. This is due to

poor road infrastructure and low per capita income, restrictive policy on car industry.

The technology for two-wheelers is not as well developed as for car industry. This is

due to oligopoly between top five players in the segment, compared to thirty

manufacturers in the car industry

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INTRODUCTION TO THE INDIAN MOBIKE

INDUSTRY

The Indian two-wheeler industry is dominated by three players, Bajaj, Hero Honda

and TVS Suzuki, who account for 80 percent of the total two-wheeler market. The

other players including Kinetic Engineering, LML and others account for the

remaining 20 percent of the market. The industry can be divided into three broad

segments: Scooters, motorcycles and mopeds. In the scooters segment Bajaj is the

market leader, Hero Honda is the market leader in the motorcycles segment and in the

segment of mopeds, TVS controls the major chunk of the market.

Most Indian players in the two-wheeler industry had been into some kind of strategic

alliance, technical collaboration or joint venture with foreign players, mainly Japanese

firms. Hero-Honda, is a joint venture between the Munjal-promoted Hero Group and

Honda Motor Co. of Japan; TVS-Suzuki was an alliance with TVS and Suzuki Motors

(till September 2001); Bajaj-Kawasaki a joint venture between Bajaj Motors and

Kawasaki; and Yamaha-Escorts, a joint venture between Escorts and Yamaha Motor

Corp. (till June 2001).

Indian automobile market, be it the two-wheeler segment, the three-wheeler segment

or the car segment, is yet to come to a stage where all the models are developed

indigenously. For years now, Indian companies have been dependent on their foreign

joint venture partners or collaborators to provide them with the technical know-how.

This trend too is in for a change. Leading the pack in this arena is Bajaj, which has

been Successful at designing models in-house. Bajaj's Saffire and Spirit, have been

able to bag the scooter of the year award for 2003 and 2004 respectively. In fact, its

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Spirit was adjudged the "Indigenous product design of the year" for the year 2000.

The recently launched Pulsar from the Bajaj stable is yet another home-grown

product, albeit in tandem with Japanese design house, Tokyo R&D. Bajaj has been

laying increased emphasis on its R&D so as to be able to launch new products to tap

the markets at all possible price points. Other companies too are adapting the strategy

of designing and developing products indigenously. TVS's Victor is yet another

development in this direction and this indigenously built model has been a success in

the markets.

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JOURNEY SO FAR

Indian companies had relied heavily on their foreign counterparts for technical

support, design of the model etc., while they provided the distribution and branding in

the Indian market. Now that the Indian market for motorcycles is fairly developed and

consumers are well aware. The inadequacy of the public transportation system, the

upwardly mobile middle class, which has the disposable income and the intent to own

a two-wheeler and the sheer size of the Indian market is proving to be an attractive

factor to many multinational companies. India's two-wheeler industry is the second

largest market in the world after China. Honda Motors, whose tie-up with Hero-

Honda is going to expire soon, has already entered the fray with Honda-Activa.

Others are also queuing up.

Yamaha Corporation, which was operating in India through a joint venture with

Escorts Group, had decided to call it quits in mid-2001 by buying off Escorts' 50

percent share in the joint venture. Yamaha now plans to tap the Indian market on its

own with models such as RX-135, RXZ, YBX125, YD125, and ACE. Its name has

become fairly established while the joint venture had been in operation for two

decades. On its own now, Yamaha has started implementing its ambitious plans for

the Indian market and has embarked on a challenge 21 project, a time-bound initiative

that is aimed at reorienting and revitalizing the entire Indian operations in order to

achieve a competitive edge. Yamaha has set for itself the target of capturing 21

percent of India's motorcycle market by 2006. India is one of the few countries where

Yamaha, the world's second largest motorcycle manufacturer operates a fully owned

subsidiary.

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COMPANY PROFILE

HERO HONDA

INTRODUCTION TO HERO GROUP

MISSION STATEMENT

IN PURSUIT OF EXCELLENCE

We, at Hero Honda, are continuously striving for synergy between technology,

systems, and human resources to provide products and services that meet the quality,

performance, and price aspirations of our customers. While doing so, we maintain the

highest standards of ethics and societal responsibilities, constantly innovate products

and processes, and develop teams that keep the momentum going to take the company

to excellence in the new millennium".

WE CARE FOR ENVIRONMENT

A philosophy closest to Hero Honda is that which pertains to the environment, which

is why the company goes that extra step to ensure that each one of the high

technology 4-stroke Hero Honda motorcycles meet the most demanding of pollution

norms at every level. This is a policy that the company has followed since the very

beginning.

WE CARE FOR COMMUNITY

Hero Honda is a company with a difference. Constantly involved in social

activities, spreading. Awareness about the community and environment, the company

has taken a giant step in the fields of Health care; Education; Engineering;

Environment and many more

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HERO HONDA

"Hero", the brand name symbolizing the steely ambition of the Munjal brothers, came

into being in the year 1956. From a modest manufacturer of bicycle components in

the early 1940's to the world's largest bicycle manufacturer today, the odyssey was

fueled by one vision - to build long-lasting relationships with everyone, including

workers, dealers and vendors. This philosophy has paid rich dividends through the

years.

Hero, a name synonymous with two wheelers in India is today a multi-unit, multi-

product, geographically diversified Group of companies. Through fully integrated

operations, the Munjals roll their own steel, make critical components such as free

wheels for their bicycles, and have the foresight to simultaneously diversify into

myriad ventures, like product designing, IT enabled services, finance and insurance,

just to name a few.

Like every success story, Hero's saga contains an element of spirit and enterprise; of

achievement through grit and determination, coupled with vision and meticulous

planning. Throughout its success trail, the Hero Group and its members have

displayed unwavering passion of setting higher standards for themselves and

delivering simply the best to their customers.

The Hero Group philosophy is: "To provide excellent transportation to the common

man at easily affordable prices and to provide total satisfaction in all its spheres of

activity." Thus apart from being customer-centric, the Hero Group also provides its

employees with a fine quality of life and its business associates with a total sense of

belonging.

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"Engineering Satisfaction" is the prime motive of the Hero Group and it has become a

way of life and a part of the work culture of the Group. This is what drives the Group

to seek newer vistas, adopt faster technology and create quality driven products to the

utmost satisfaction of customers, partners, dealers and vendors.

Today the Hero Group has a number of accolades and achievements to its credit …

yet consumer requirements and newer technologies provide fresh challenges every

day, and at Hero the wheels of progress continue to turn.

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MILESTONES

Hero's success saga contains an element of spirit and enterprise; of achievement

through grit and determination, coupled with vision and meticulous planning.

1956 Hero Cycles Limited is established.

1961 Rockman Cycles Industries Limited established, which is today the largest

manufacturer of bicycle chains and hubs.

1963 It pioneered bicycle exports from India - a foray into the international market.

1971 Highway Cycles was set up to meet the demands of Hero Cycles. It is today the

largest manufacturer of single speed and multi-speed freewheels.

1975: Hero Cycles Limited became the largest manufacturer of bicycles in India.

1988: Majestic Auto Limited was formed and the Hero Majestic Moped was

introduced.

1991: Munjal Castings established.

1994: Hero Honda Motors Limited established in joint venture with Honda Motors of

Japan, to manufacture motorcycles.

1995: Munjal Showa Limited established to manufacture shock absorbers and struts

and is today among the top two shock absorber manufacturing companies in

India.

The 100 cc Hero Honda Motorcycle arrived and by 1988 was the No. 1 among

all motorcycles in India.

2000: Hero Cycles Limited entered the Guinness Book of Records as the largest

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bicycle manufacturer in the World.

2002: Hero Motors, a division of Majestic Auto Limited set up in collaboration with

Steyr Daimler Puch of Austria. Gujarat Cycles Limited, now known as Munjal

Auto Industries Limited was established to manufacture and export state-of-the-

art bicycles and allied products in its fully automated plant at Waghodia.

Sunbeam Auto Limited, earlier a unit of Highway Cycles Limited, established

as an ancillary to Hero Honda. It is the largest die casting plant in India.

2003 Introduced "Hero Puch" from Hero Motors Limited. This revolutionary

machine immediately set new records of petrol efficiency and usable power in

50 - 65 cc machines.

2004 Hero Cold Rolling Division established and is one of the most modern steel

cold rolling plants.

2005

Hero Honda receives National Productivity Council's Award.

Hero Honda receives the Economic Times - Harvard Business School

Association Award against 200 contenders.

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HERO GROUP ACHIEVEMENTS

Hero Group ranks amongst the Top Indian Business Houses comprising of 18 profit-

making companies, with an estimated turnover of USD1.36 billion during the fiscal

year 2005-06. The Group and its management have acquired a number of accolades

and achievements over the years:

Group Chairman, Mr Brijmohan Lall Munjal received the coveted "Ernst & Young

Entrepreneur of the Year" award for 2005.

A survey by leading business newspaper - Economic Times - declared Hero Honda as

"the most trusted automobile brand in India."

Hero Honda was ranked number 4rth in India by Review 2006 - an annual survey of

Asia's leading companies conducted by Far Eastern Economic Review.

Hero Group Management style has been acclaimed internationally by leading

institutions likes INSEAD (France).

World Bank has acclaimed Hero Cycles as a role model in vendor development based

on a worldwide study.

The London Business School, UK, has done a study on the Group as model of

entrepreneurship.

Boston Consulting Group has ranked Hero Group as one of the top ten Business

Houses on Economic value, in India.

ABN Amro has rated the Hero Honda stock as one of the most valuable and one of

the most under-rated.

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Engineering Exports Promotion Council has awarded Hero Cycles with the Best

Exporter Award for the last 28 years in succession.

HSBC-Merril Lynch has estimated Hero Group would be among the top value

creators in 2005-06.

Hero Cycles Limited is a Guinness Book Record holder since 1986 as the world's

largest manufacturer of bicycles.

Hero Honda ranked Number One in the two-wheeler category on Environmental

Performance by the Centre for Science and Environment.

The Hero Group is recognized as a long term partner and an ideal employer:

Hero Group's partnership with Honda is over 16 years old. Hero Cycles Limited has

not lost a single man-day of production since 1956

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INTRODUCTION TO HERO HONDA PRODUCTS

Hero Honda is the largest player in the motorcycle segment. Its Focus is on

manufacturing mobikes which are contemporary in design and style and as well as

eco friendly to environment. Hero Honda Motors ltd was the first company to

concentrate manufacturing fuel-efficient bikes instead of powerful bikes. The

company has a comprehensive range of bikes in its stable

1. CD-100DX

2. CD-100SS

3. Splendor

4. Street Smart

5. Sleek

6. CBZ,

7. Passion.

However ‘ Street ‘ failed to evoke market fancy while sporty ‘ CBZ ‘ dropped down

the popularity chart in early 90s. Hence the company continues to rely on urban –

centric ‘ Splendor ‘; its primary revenue spinner with the USP of fuel – efficiency,

which accounts for over 60-70%of its sales. The " Passion " launched in mid -Jan

2001has had a resounding success contributing to 26% of total volumes and has not

cannibalized the volumes of ‘ Splendor ‘. With the sale of over 1mn motorcycles in

2004-05, the company has also become the largest volume seller among all Honda

Companies and ventures in the world.

The company has now shifted its focus towards launch of new products. HHML

launched a 100cc motorcycle ‘ Joy ‘ in FY2001delivering 65 to 70 km per litre in city

driving conditions. The company hopes to achieve sales of 8,000 to 10,000 units of

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Joy per month. The company is also planning to launch motorcycles in 200cc –300 cc

category and is looking at the possibility of introducing a " luxury motorcycle " in the

same category. HHML has planned an additional capacity of 1.5mln units pa at

Dharuhera plant by investing Rs3bn ($65mn) to meet the huge and increasing demand

for motorcycles.

The Honda Motor Corporation of Japan has set the annual sales target of 2.75 mln 2-

wheelers (25% of worldwide target) for 2006 in India, to be contributed to the extent

of 1.5 mln by HHML and the balance by its wholly owned subsidiary Honda

Motorcycles & Scooters India Pvt. Ltd.

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PRODUCT PROFILE OF HERO HONDA

HERO HONDA SPLENDOR

The most successful model of Hero Honda Motors ltd which has caught the fancy of

Indian customers. It’s sale accounts for 40 % of the product profile. The reason for its

success is the unbeatable mileage. A combination of style and economy makes the

Splendor is a bike worth investing in. The latest from the Hero Honda factory offers

both performance and looks. It has good looks, excellent handling characteristics and

a smooth drive over any type of terrain, thanks to the changes in the suspension at

front and near as well as the new frame design. All these features contribute to the

Splendor being one of the best selling four stroke-two-wheelers in India.

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HERO HONDA STREET 100

The Street 100 is Hero Motor's latest two-wheeler on offer in the step-through

category. The Hero Honda Street 100 is equipped with unique features like city-

clutch, which is designed specially for city driving. It has rotary gears, which allow

the rider to flip directly from the fourth gear to neutral once the bike has come to a

halt, a must for the present ‘stop-and-go’ traffic. A self-starter button comes as an

option. The Street can be purchased with a variety of seat layouts and has options like

a water pump, spray can, larger luggage tray, etc. Its major competitor is the much

cheaper K4 from Kinetic. Major plus points that justify the higher price are the

centrifugal clutch and the rotary gears. However, the liberal use of plastics negates

much of the ‘feel good’ factor and has hindered sales to a large extent.

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HERO HONDA CBZ

The Hero Honda CBZ (pronounced CeeBeeZee) is the latest offering from Hero

Honda for the Indian market. With a 156cc engine, the company claims that the bike

has a top speed of 100kph within 5.6 seconds. Though the bike has the largest

displacement engine, its top speed doesn’t match up to many of its competitors. In all

other respects, it is a bit too early to decide whether the CBZ will sell in the same

numbers as the Splendor. Though the initial market response has been good, only time

will be the final arbiter. It was the first attempt by the company to target youth who

would love to drive a bikes whch have sleek looks and don`t mind shelling out few

extra bucks for it . Initially it was accepted by the customers very well but due to high

maintenance costs its not a hot seller for the company.

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HERO HONDA CD 100 SS

CD100SS is designed for those who live life in the fast lane, rough and tough, for

those who would love to take a bike on the stumbling village roads. It shares almost

all components with the CD100, except for the additional reinforcement. With larger,

reinforced shock absorbers, wider tyres, heavier body weight and engine guard, the

Hero Honda CD 100 SS weights slightly more, resulting in some cut down in the fuel

economy it offers. Minor problems of the CD100 have been rectified in the SS model.

If you wish to ride into the hinterland, this is the bike for you. It is a modified version

of cd 100.

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CD 100

Launched in May 1985, it is the legendary " Fill it shut it Forget it" motorcycle. It was

India's first 100cc, 4-stroke motorcycle. Its simple design and fuel-efficient engine is

accepted in both rural as well as urban areas. IT was the first successful model of hero

group of motorcycles and it caught the fancy of the customers by the tag line " Fill it

Shut it Forget it”. Was one of the first models of mobike launched by hero group aith

technical tie up with Honda, Japan.

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Hero Honda passion was launched in 2000 in order to create excitemnent in the

market. IT was an attempt by HHML to modify the splendor in looks. The base

engine was same as of splendor. It was promoted my tagline “BORN IN STUDIO

“thus highlighting the sleek looks of passion. It was a hit among the young crowd and

was very well received in urban markets of India.

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MARKETING STRATEGIES OF HERO HONDA

MOTORS

By everyone. The farmer in Punjab. The fisherman in Kerala. The trader in Mumbai.

And the worker in Bengal. Imagine having a place in their hearts. Imagine echoing

their heartbeats. Imagine being part of the great Indian fabric.

That’s the great Indian dream. Of every company and it is what Hero Honda is trying

to accomplish through its advertisement and marketing initiatives for the entire range

of Hero Honda motorcycles and the latest campaign broadcasted onn all premier

channels “ desh ki dhadkan “ is a step in that direction. Says Navroze D. Dhondy,

CEO, Percept Advertising, which made the 60-second television commercial, "We

wanted to say that Hero Honda was more than a bike. It was a friend, something that

has been part of your life, something that has shared your best moments."

So who's the target? Everybody. The models in the advertisement range from children

to old people. The message? Everybody needs a Hero Honda. In the shape of a

CD100, or a CBZ, or a Splendor, or a Street. "Desh ki Dhadkan" is the catch line.

"Dhak, Dhak," the message. "We echo the heart beat of every Indian," the claim. "We

were looking for something new. We wanted to tell the viewer that we were way

above the rest," says Atul Sobti, senior vice-president, marketing, Hero Honda.

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BAJAJ AUTOMOBILES

The Bajaj Group is amongst the top 10 business houses in India. Its footprint stretches

over a wide range of industries, spanning automobiles (two-wheelers and three-

wheelers), home appliances, lighting, iron and steel, insurance, travel and finance.

The group’s flagship company, Bajaj Auto, is ranked as the world’s fourth largest

two- and three- wheeler manufacturer and the Bajaj brand is well-known in over a

dozen countries in Europe, Latin America, the US and Asia.

Founded in 1926, at the height of India's movement for independence from the

British, the group has an illustrious history. The integrity, dedication, resourcefulness

and determination to succeed which are characteristic of the group today, are often

traced back to its birth during those days of relentless devotion to a common cause.

Jamnalal Bajaj, founder of the group, was a close confidant and disciple of Mahatma

Gandhi. In fact, Gandhiji had adopted him as his son. This close relationship and his

deep involvement in the independence movement did not leave Jamnalal Bajaj with

much time to spend on his newly launched business venture.

His son, Kamalnayan Bajaj, then 27, took over the reins of business in 1942. He too

was close to Gandhiji and it was only after Independence in 1947, that he was able to

give his full attention to the business. Kamalnayan Bajaj not only consolidated the

group, but also diversified into various manufacturing activities.

The present Chairman and Managing Director of the group, Rahul Bajaj, took charge

of the business in 1965. Under his leadership, the turnover of the Bajaj Auto the

flagship company has gone up from Rs.72 million to Rs.46.16 billion (USD 936

million), its product portfolio has expanded from one to and the brand has found a

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global market. He is one of India’s most distinguished business leaders and

internationally respected for his business acumen and entrepreneurial spirit.

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MILESTONES

30

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2005  

December Bajaj Dicsover launched

June Bajaj Avenger launched

February Bajaj Wave launched

2004  

Sept/Oct Bajaj Discover DTS-i launched

August New Bajaj Chetak 4 stroke with Wonder Gear launched

May Bajaj CT100 Launched

January Bajaj unveils new brand identity, dons new symbol, logo and brandline

2003  

October Pulsar DTS-i is launched.

October 107,115 Motorcycles sold in a month.

July Bajaj Wind 125,The World Bike, is launched in India.

February Bajaj Auto launched its Caliber115 "Hoodibabaa!" in the executive motorcycle

segment.

2001  

November Bajaj Auto launches its latest offering in the premium bike segment ‘Pulsar’.

January The Eliminator is launched.

2000  

The Bajaj Saffire is introduced.

1999  

Caliber motorcycle notches up 100,000 sales in record time of 12 months.

  Production commences at Chakan plant.

1998  

June 7th Kawasaki Bajaj Caliber rolls out of Waluj.

BAJAJ PRODUCTS

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RESEARCH METHODOLOGY

METHODOLOGY

Types of Research

Exploratory research: In well-established fields of study, hypotheses usually are

drawn from the ideas developed in previous research studies or are derived from

theory. “Hypotheses are tentative answers to questions that serve as guides for most of

the research.”

DESIGN OF EXPLORATORY STUDY

Study of Secondary Data: The quickest and the most economical way from

researchers is to find possible hypothesis is to take the advantage of the work done

earlier and thus utilize their efforts.

In-depth Interviews: We used in-depth interviews because it attempts to

influence respondents to talk freely about their subject of interest. No formal

questionnaire was used in depth interviews. The interview was conducted with an

outline “ co-relation between employee commitment and organizational

performance” in mind.

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Basic methods of collecting Primary Data:

1. Questionnaire Method: The questionnaire used by us for the purpose of data

collection were of structured type( Non-disguised as well as Disguised).

2. Contact Method: In order to derive information from the intended organization,

it was elementary for us to search for a link, which could enable us to conduct a

research in that organization. The personal contact of one of the group members in

the aforesaid organization helped us in getting an appointment soon.

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INDUSTRY ANALYSIS

37

38

39

40

ANALYSIS OF QUESTIONNAIRE

Q1:->Which type of bike do you have?

(A) Performance segment bike

(B) An Average segment bike

PerformanceSegment

Average Segment

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Q2:->Please select your main purpose of using a bike?

(A) Business (B) Personal

(C) Leisure (D) Status

BUSINESS

PERSNAL

LEISURE

STATUS

70%

12%

10%

8%

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Q3:- would you like to change your bike from any other company’s bike

in the same Segment?

(A) Yes

(B) No

YES

NO88%

12%

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Q4:->would you like to change the segment of your bike?

(A) Yes

(B) No

YES

NO80%

20%

44

Q5:->Are you satisfied with the services Provided to you by the company

if Yes or No? Why?

YES

NO94%

6%

45

Reason for dissatisfaction

Low average

Maintaince

Less no ofservice stations

others

10%

35%

29%

26%

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Q6:->which facilities would you need ?

Low price

service station

incentives

others

10%

35%

29%

26%

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Q8:->Do you get spare-parts of your bike easily from the market ?

(A) Yes

(B) No

Yes

No

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Q9:->What are your main preferences while buying our products ?

(A) Brand

(B) Price

(C) Features

(D) Service

(E) Dealer’s advice

(F) Promotion schemes

Brand

Price

Features

Services

Dealer's advice

Promotionscheme

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Q10:->Would you like to purchase the products of our company in future

(A) Yes

(B) No

Yes

No

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Q.11 WHAT IS YOUR PREFERENCE OF BIKES IN INDIAN BIKE

INDUSTRY

51

Q.11 WHAT IS YOUR FAVOUROTE STATUS OF BIKES AMONG

THE TWO COMPANIES

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SWOT ANALYSIS

SWOT OF HERO HONDA

Hero Honda motors ltd is highest selling mobike company in India and is the largest

two wheeler manufacturer in the world. As the case is every company has it strengths

and weaknesses and Hero Honda Is no Exception: -

STRENGTHS

Market Leader in terms of sales and turnover

Successful Technical Tie up with Honda and a very healthy relationship with them

A wide network of dealers across the nation

A wide network of authorized service stations at different parts of the country

A wide veriety of product portfolio

Very strong brand image of making fuel efficient and reliable bikes

High product and brand recall among the customers infect hero Honda is the first

choice among the majority customers.

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WEAKNESS

Major weakness of hero Honda are

Not a strong player in the rural market

Tie up with Honda expiring in 2 yrs

Very few models at the lineup stage

R& d of hero Honda is weak

Not a great player in entry level bikes which is dominated by bajaj

Not a Strong Player in the Premium Market

Only 2 models which are successful Splendor and passion

Not a very strong marketing deptt. Only one campaign was a hit “fil it shut it and

forget it”

It’s a non player in scooter market which is huge even though that industry is

going through a rough pace

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OPPORTUNITIES

1. It’s a growing market thus company has high growth potential in future

2. Premium segment is still not fully exploited with right product HHML can do

wonders

3. Neighboring countries markets are not exploited fully

4. Need to tap African and European market.

THREATS

1) Entry of new players

2) Honda entering in the bike market will pose a considerable threat

3) Competitors becoming aggressive with new product launches and high

marketing pitch

4) Aggressive Yamaha posses another threat

5) NO tie up with any other company can lead to losses.

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SWOT ANALYSIS OF BAJAJ AUTOMOBILES

STRENGTHS:

Bajaj Automobiles draws it's strength from 29 years of experience in handling the

ever changing automobile scenario

strong customer relationships

ability to provide the cutting edge technology at best-value-for-money

an excellent service & support infrastructure.

WEAKNESSES:

The company needs to evolve a comprehensive plan & strategy to make inroads

into a part of middle class & upper middle class.

Lack of R & D centers also makes it difficult to launch new products over here.

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OPPORTUNITIES:

The present rate of growth of the Automobile Industry & a large potential

available in these areas provides excellent opportunity for the company to widen

its market.

With the fast growing economy the pricing strategy needs to be tackled with care

as it can decide upon long term decisions of the company.

Globalization is yet another opportunity, if followed effectively & promptly.

THREATS:

It is natural that threats from the existing as well as new entrants will affect the

present turnover & Market share. The nearest competitors having the identical

product range are the greatest threat to the company.

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PERT ANALYSIS OF AUTOMOBILE INDUSTRY

POLITICAL ANALYSIS

Traditional GOVERNMENT OF INDIA has considered the automobile industry as a

luxury segment. But realizing the growing importance of two-wheelers with the

increasing necessity of personal transportation for the middle class in eighties, priority

was given to the sector by favorable foreign policy. This brought about technology

revolution to the two-wheelers as Japanese majors entered in technical and financial

participation with Indian majors.

GOI has a moderate intervention in the operations of two and three-wheeler industry.

Excise duty structure, emission control, safety of rider, etc are all policy decisions.

The excise duty on two-wheelers, which previously ranged between 10 to 30%,

according to the engine capacity was rationalized in 1991-92 budget to only two-

categories viz 15% upto 75cc and 25% above 75cc. This mainly affected

manufacturers of 100cc category in the early nineties. Since then the excise duty

structure for two-wheelers has been left unchanged till 1999.

In the 1999-2000 budget, as a result of rationalization of duty structure the excise duty

up to 75cc vehicles was increased to 16% while for those above 75cc decreased to

24%. As a result, scooter prices were reduced by Rs200-400 per vehicle.

The components used for manufacturing two-wheelers are charged an excise duty of

15%. The industry has been asking GOI to reduce this excise duty to 10%.

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Two and three-wheelers sector was the first to be de-controlled from the clutches of

government regulations. This has resulted in the entry of world majors and subsequent

in technology and equity participation with Indian players. This has lead to

technology revolution for the two-wheelers in 1980's.

The regulation of safety of the rider is controlled by state government notifications,

these vary in different states. For example helmets are compulsory for two-wheeler

riders in New Delhi and some other states. The same is optional in Maharashtra and

Karnataka.

The price of the two-wheelers varies across the country due to variation in registration

charges, state taxes and octrai levied by states.

The GOI controls availability and price of petrol, the fuel for two-wheelers. But with

the dismantling of Administered Price Mechanism (APM), The availability of

unleaded petrol across the country will be a crucial factor, as catalytic converters

work satisfactorily only under unleaded petrol.

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ECONOMICAL ANALYSIS

Automobile industry is the indicator of the technological health of the country. It also

reflects economical status of a country.

India planners need to consider that the auto industrys one segment that is capable of

very rapid growth unlike traditional areas like agriculture, minerals, chemicals,

energy, textiles, gems etc. While all sectors need to be encouraged, the auto sector is

not only capable of very rapid growth but also of good exports and huge employment.

In the past, auto industry suffered from the stigma of being considered elitist and was

subjected to crippling restrictions and taxation that still hold it back. There is 40%

MODVAT on the components and 35% customer’s duty on imported kits. After

production there 245 to 32% excise duty plus 12% local sales tax some other local

taxe. So every time you buy a car, bike or truck, you give one to government in taxes.

The impact on employment is also little understand.

Every direct or indirect salaries job also generates huge territory employment to the

providers of food, clothing, shelter, health, education entertainment, recreation,

construction etc. accounts of 10% of India’s auto industry, the cumulative impact is

huge.

Indian two-wheeler manufacturers have everything going for them in this battle. They

have a large, mature market, which offers them tremendous volumes. All of them

have built up huge capacities which offer scale economies. They have technology

support from some of the leading names in the world such as Honda, Yamaha, Suzuki

and Kawasaki.

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If India cut the total taxes on auto by half, there would be a huge immediate boost in

sales and production. If this sacrifice by the governments can generate may times

greater value in jobs and economic activity, this time of crisis is the ideal time to use

autos as a vehicle to kick start the entire economy.

SOCIAL ANALYSIS

The main social factor that associated with automobile industry is the environmental

concerns and HEALTH HAZARDS, (including the welfare of workes etc, )in form of

various diseases due to auto pollution. . Some of the issues of pollution related to

automobile are discussed below.

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FINDINGS

The company offers a good outlook in a long-term perspective. It is expected to

emerge as the top corporate in creating value for shareholders by 2003-04 if it

manages to sustain the volume growth rate in the near future. HHML has been

included in the BSE Sensex from Jan 2002 replacing M&M, which is a reflection of

its stranglehold on the domestic automobile market. HHML is set to follow a phased

distribution and product strategy .The company being buoyed by the success of its ‘

OM Project ‘ that has paid off by clocking sales of 1 mln bikes last fiscal; has initiated

a new programme ‘ Joy of Leadership ‘ for fiscal 2001-02 and will be complemented

by customer relationship initiative called ‘ Hero Honda Passport ‘ with a tagline of "

Suhana Safar " across all its dealerships and service stations in the country. The

scheme will allow the customers to avail of a host of privileges, benefits and

exclusive rewards. It is promoted proactively through conventional media . The

company has decided to tap the upcountry and semi-urban markets and about 30 –

35% of the rural base with a distinct product positioning. The company is

aggressively cutting costs and are indigenising most of its manufacturing activities .

In the future there will be continued pressure on profitability and sustaining the

market share will be a daunting task.

Towards this end the company has to be consistent in launching successful new

products at regular intervals. It also remains to be seen if it can prevent an erosion in

market share to new competitors such as Bajaj and TVS Suzuki.

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While the parent has set up a 100% subsidiary in the country, HMSI will manufacture

only scooters till 2004, while HHML will continue to manufacture only motorcycles

till the year 2004, after which the both the companies will be free to foray into any 2-

wheeler segment. HHML has technical collaboration with Japanese partner Honda

Motors till 2005, and with the launch of new products the outgo in terms of

promotional and collaborator expenses will also rise thereby initially affecting the

profit margins. The company pays a royalty of Rs200 per motorcycle for product

range upto Splendor and also for the incremental technology introduced. For other

models the incremental royalty payments range from 3 % to 5 % and are valid for a

specific period.

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CONCLUSION

1. There is a preference of executive segment of bikes has been observed in the

metros .

2. More than 90% of the bike owners are satisfied with the performance of their

bikes.

3. The major reason for dissatisfaction among the least number of dissatisfied

owners is the maintenance cost which they bear.

Majority of the customers want to have some incentives with the purchase of the bike.

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BIBLIOGRAPHY

1. www.herohonda.com

2. www.bajajauto.com

3. www.rediff.com

4. www.google.com

5. Competition success review.

6. Hero Honda and Bajaj outlets.

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APPENDICES

QUESTIONNAIRE

NAME:->--------------------------------------------------------------------

ADDERESS:-

>------------------------------------------------------------------------------------------------------

-----------------------------------------

AGE:->--------------------

OCCUPATION:->----------------------------------------------------------

Q1:->which type of bike do you have?

(A) Performance bike

(B) An average bike

Q2:->Please select your main purpose of using a bike?

(A) Business (B) Personal

(C) Leisure (D) Status

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Q3:->Would you like to change your bike from any other company’s bike in the same

Segment?

(C) Yes

(D) No

Q4:->Would you like to change the segment of your bike?

(A) Yes

(B) No

Q5:->Are you satisfied with the performance of your bike, if Yes or No? Why?

Q6:->Are you satisfied with the services Provided to you by the company, if Yes or

No? Why?

Q7:->Which facilities would you need ?

(A) Low Price

(B) Service Station

(C) Incentives

(D) Others

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Q8:->Do you get spare-parts of your bike easily from the market ?

(A) Yes

(B) No

Q9:->What are your main preferences while buying our products ?

(A) Brand

(B) Price

(C) Features

(D) Service

(E) Dealer’s advice

(F) Promotion schemes

Q10:->Would you like to purchase the products of our company in future ?

(A) Yes

(B) No

Q.11 what is your preference of bikes in indian bike industry

Q.11 what is your favourote status of bikes among the two companies

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