PROJECT REPORT ON

DISTRIBUTION CHANNEL OF

HERO HONDA AND YAMAHA

SUBMITTED TO:-

MR. JONES MATHEW

SUBMITTED BY:-

GROUP NO.-6Members are:-

Shyam Modi

Kamal Sidana

Chirag Adlakha

Sarada Prasan Behera

Sunny Saurabh Prashar

Sandeep Ranjan Pattnaik

INTRODUCTION TO THE PROJECT

We had selected Hero Honda because it has the largest market share in two-wheeler segment around 50% in INDIA. Besides its maximum market share in INDIAN market, it also has a very strong sales and distribution network including rural areas. It is also the largest selling two-wheeler manufacturer and seller in the world. Yamaha on the other hand is also well recognised manufacturer in the world. In INDIAN context it has about 1% market share. But as it is spreading its wings fast in INDIAN market with new and aggressive marketing strategy with a good sales and distribution network we liked to work on this topic.

OBJECTIVEIn this project we had worked on the sales and distribution of two motor bikes manufacturer in INDIA i.e. HERO HONDA and YAMAHA and we are comparing their distribution channel.

HERO HONDA

HISTORY OF HERO HONDA

It was founded on January 19, 1984 in Gurgaon, Haryana. Its headquarters is situated at New Delhi. Mr Brijmohan Lal Munjal is the chairman and founder of this company. This company is mainly associated in Industry-Automative products, motorcycles, scooters. “Hero” is the brand name used by the Munjal brothers for their flagship company Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was established in 1984 as the Hero Honda company,India.During the 1980s, the company introduced motorcycles that were popular in India for their fuel economy and low cost. A popular advertising campaign based on the slogan 'Fill it - Shut it - Forget it' that emphasised the motorcycle's fuel efficiency helped the company grow at a double-digit pace since inception.

Hero Honda has three manufacturing facilities based at Dharuhera and Gurgaon in Haryana and at Haridwar in Uttarakhand. These plants together are capable of churning out 3.9 million bikes per year. Hero Honda's has a large sales and service network with over 3,000 dealerships and service points across India. Hero Honda's customer loyalty program, the Hero Honda Passport Program, claims to be one of the largest programs of its kind in the world with over 3 million members.

At a time when most of the automobile manufacturers had to decrease production, Hero Honda increased its production capacity at its Haridwar manufacturing plant from 2,000 units per day to 3,000 units per day in January 2009. It took advantage of the tax benefits offered by the government to companies for establishing manufacturing plants in hill states like Uttarakhand. Hero Honda was not required to pay excise duty to the government for the first 10 years and income tax for the first five years of production at its Haridwar plant.

It has been referred to as the world's biggest manufacturer of 2-wheeled motorized vehicles

The 2006 Forbes 200 Most Respected companies list has Hero Honda Motors ranked at 108.

The company's most popular model is the Hero Honda's Splendor, which is the world's largest-selling motorcycle, selling more than one million units per year.

During the fiscal year 2008-09, the company has sold 3.28 million bikes and the net profit of the company stood at Rs. 1281.7 Crore, up 32% from the previous fiscal year.

DIFFERENT PRODUCTS OF HERO HONDA Achiever

Ambition 133, Ambition 135 CBZ, CBZ Star, CBZ Xtreme CD 100, CD 100 SS, CD Dawn, CD Deluxe, CD Deluxe (Self Start) Glamour, Glamour FI Hunk Joy Karizma, Karizma R, Karizma ZMR FI Passion, Passion+, Passion Pro Pleasure Street Splendor, Splendor+, Splendor+ (Limited Edition), Super Splendor, Splendor NXG

CORE COMPETENCIESBesides having very good sales and distribution network in urban market, it has

successfully spread its wings in the rural market. In December 2007, the company started a separate 'rural vertical'. To strengthen its network in rural areas, the company started sales, servicing, and spare part outlets in several small towns and villages across the country. The company recruited local people as sales executives and trained them to market its products to rural consumers.

In the fiscal year 2008-09, the sales of Hero Honda from the rural market amounted to 40 percent of the total sales compared to 35 percent during the fiscal year 2007-08.

Hero Honda's Rural ThrustThe global financial crisis of 2008-09 resulted in a credit crunch, rising unemployment,

declining income, and turmoil in the stock markets across the world. The Indian automobile industry also had been battling with the crisis since early 2008.

RURAL NETWORKDuring the financial year 2007-2008, the rural network of Hero Honda covered 18,000 of

the targeted 23,360 villages with a population of more than 5,000 across India.

PROMOTIONHero Honda promoted its products aggressively during festive seasons in different regions

of India as sales during festive season was generally higher compared to the rest of the year...

DISTRIBUTIONHero 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...

RETAIL FINANCEThe growth of the Indian two-wheeler industry was highly dependent on the availability of

retail finance. According to analysts, lack of financing could result in a decline in sales.

NUMBER OF DEALERSAs a company, dealers play a major role in serving customers, while growing and

sustaining the markets. Hero Honda has a network of more than 3500 strong and dedicated Authorized dealers. This network has helped Hero Honda in maintaining its brand name, image and its promise of reliable quality to every part of the country. The power of this highly efficient and motivated network goes a long way to create goodwill for Hero Honda brand among countless consumers besides creating availability and after sales services.

The channel of distribution is a direct dealer network. A direct dealer is a dealer who is authorized to purchase the product directly from the company and sell.

Some Of important dealers in DELHI -

Name City Address Phone No.

ARC MOTORS PVT LTD

Delhi

S-9, OKHLA INDUSTRIAL AREA, OKHLA PHASE-II

DelhiDelhi - 110020

2638315126383152

AUTO NEEDS (INDIA) PVT LTD

Delhi E-1/4, PANDAV NAGAROPP. MOTHER

DIARY PLANTPATPARGANJ

DelhiDelhi - 110092

2248647522484676

ESS AAY AGENCIES INDIA PVT LTD

Delhi

T-2336, FAIZ RD, KAROL BAGH

DelhiDelhi - 110005

2875333128753309

HIMGIRI AUTOMOBILES PVT

LTDDelhi

A-74, MAIN ROAD, KANTI NAGAR

KRISHNA NAGAR Delhi- 110051

2209900022097718

K.S.AUTOMOBILES Delhi

KHASRA NO-331/1/2, N.H-8,VILLAGE-

RANGPURI, MAHIPALPUR

DelhiDelhi - 110037

2678969326789694

KHANNA AUTOMOBILES

Delhi

WZ-1,GANESH NAGAR MARKET, NR TILAK

NAGAR, MAIN NAJAFGARH RD

Delhi

2599575725995858

METRO MOTORS Delhi

22, JAGDAMBA MARKET,NEAR

RITHALA METRO STATION,ROHINI

DelhiDelhi - 110085

2705000227050003

OSWAL MOTORS PVT. LTD

Delhi

A-20, G.T.KARNAL ROAD NR. AZADPUR

CHOWK Delhi

Delhi - 110033

2741948827143026

PASHUPATI MOTORS Delhi 81, ADCHINI,MAIN

MEHRAULI ROAD, AUROBINDO MARG

DelhiDelhi - 110017

2696225526526893

JASODHA AUTO PVT LTD

Gurgaon

NEAR DISTRICT COURT, SOHNA

GurgaonHaryana - 122001

23012532301263

AUTONEEDS Gurgaon

501/2, MEHRAULI ROAD

GurgaonHaryana - 122001

23278512327852

R.K.AUTOMOBILES Delhi

45-46/487, ZULFE BENGAL,MAIN

G.T.ROAD, SHAHDARA Delhi

Delhi - 110095

2211595922130468

YAMAHA

HISTORY OF YAMAHAIn August 2001 Yamaha Motor India Pvt. Ltd. (YMI) was incorporated as a 100%

subsidiary of Yamaha Motors Corporation. The fact that YMI keeps the requirements of Indian customers, namely, good mileage, comfort, durability, style and affordability has made it popular. YMI's manufacturing facilities comprises of 2 state-of-art plants at Faridabad (Haryana) and Surajpur (UP). The infrastructure at both the plants supports production of motorcycles for the domestic as well as overseas market.

Mr Yukimine Tsuji, Chief Executive Officer & Managing Director, India Yamaha Motor Pvt. Ltd. The infrastructure at both the plants supports production of motorcycles and it's parts for the domestic as well as oversees market. At the core are the 5-S and TPM activities that fuel our agile Manufacturing Processes. We have In-house facility for Machining, Welding processes as well as finishing processes of Electroplating and Painting till the assembly line.

The stringent Quality Assurance norms ensure that our motorcycles meet the reputed International standards of excellence in every sphere.

As an Environmentally sensitive organization we have the concept of "Environment-friendly technology" ingrained in our Corporate Philosophy. The Company boasts of effluent Treatment plant, Rain water - Harvesting mechanism, a motivated forestation drive. The IS0-14001

certification is on the anvil - early next year. All our endeavours give us reason to believe that sustainable development for Yamaha will not remain merely an idea in pipeline.

We believe in taking care of not only Your Motoring Needs but also the needs of Future Generations to come.

The new Surajpur plant has been inaugurated by Mr. T.Kazikawa C.E.O & MD Yamaha Global on 6th July 2009, which has capacity to produce 6 lakh motorcycles annually including Fazer followed by FZ-16, FZ-S, YZF-R15 and other models. The plant capacity can be augmented up to 1 million units.

Resurgence plan

It is increasing the number of spare parts supply shops from 70 to 95, while simultaneously improving service capabilities at dealerships. We will add 150 service centres to the existing 57. It is now mandatory for new dealers to have a service shop attached, which meets our quality standards,” added Mr Koji Arai, Director and Chief Sales Officer. Nearly 500 dealers will be part of the Yamaha family by the end of 2009.

The Japanese bike maker has targeted production of three lakh motorcycles this calendar, which is a 50 per cent jump from 2008 and translates into 70 per cent utilisation of plant capacity. The focus will be on 150cc plus bikes, which is part of its mission plan called ‘Resurgence of Yamaha in India’.

The company’s Faridabad plant makes engine components, transmission gears and shafts, while the Surajpur facility caters to manufacture of body parts, chassis, gasoline tanks, painting and bike assembly. It will soon have a new assembling unit here and the existing one will take over the painting function. After 2010, vendors will be asked to move within Surajpur when operations scale up.

The YMI models are:- Crux Crux S Crux-R Enticer R15 Fazer Fazer DIX Fazer DX Fazer LX G5 Libero Libero LX RX 135 RX-Z YBX 125

YD 125

R1

DEALERS

DEALER NEW DELHI

Dealer Name

CHANDER AUTO SERVICE

Address 17/4-5 MAIN MARKET YUSUF SARAI

City New Delhi

Contact Person

Pravesh Chander

Phone-office

011-46082545/26194688/3445/9810265145

Phone Res 6447228

Dealer Name

DELHI SCOOTERS

Address A 31-A;RAJOURI GARDEN RING ROAD

City New Delhi

Contact Person

S C Kakkar

Phone-office

25103418 / 25411667

Phone Res 6220768

Dealer Name

OSWAL-AUTO'S

Address A-20;G.T KARNAL ROAD OPP.HANS CINEMA

City New Delhi

Contact Person

Ramesh Jain

Phone-office

47807777( 10 lines), 9212007777, 9311107777, 65155255,27420750 / 27120020

Phone Res

Dealer Name

CARLTON MOTORS PVT. LTD.

Address 1282-86 KASHMERE GATE BARA BAZAR

City New Delhi

Contact Person

Vinod Nagpal

Phone-office

23917046 / 23987340

Phone Res 7435138

Dealer Name

ADARSH YAMAHA

Address 77-78 A;SRI AURBINDO MARG;ADHCHINI

City New Delhi

Contact Person

Mr. Rajiv Kumar Kataria

Phone-office

51436067

Phone Res 51436049

Dealer Name

JINDER AUTO PVT LTD

Address B-294;SARASWATI- VIHAR;PITAMPURA;NEW DELHI -110034

City New Delhi

Contact Person

Mr Gurjinder Singh Anand

Phone-office

27015997,27015998,9899439051,9899439053

Phone Res

Dealer Name

SHIVA MOTORS

Address M/S SHIVA MOTORS;E-11;100 FT ROAD;WEST JYOTI NAGAR (EXT);DELHI – 110094

City New Delhi

Contact Person

Mr Praveen Kumar

Phone-office

9990032261/ 011-22131744/ 22591466

Phone Res

Dealer Name

BULLAND AUTOMOTIVE PVT LTD

Address BULLAND AUTOMOTIVE PVT LTD;A-10;RAJU PARK;DEVLI ROAD;KHANPUR EXTN.;NEW DELHI - 110062 (DELHI)

City New Delhi

Contact Person

Mr S K Gandhi / Mr Ramkesh Basisht

Phone-office

011-29915888, 29915999, 9811104510, 9810275888,9911227329,9911239941,9911270122

Phone Res

Dealer Name

PRINCE AUTOMOBILES

Address M/S PRINCE AUTOMOBILES;9A;AMAR COLONY;MAIN ROHTAK ROAD;NANGLOI;NEW DELHI-110041 (DELHI)

City New Delhi

Contact Person

Mr Vinod Kr Gupta

Phone-office

011-25475783, 25962100, 9810018303

Phone Res

Dealer Name

YAMAHA - PRO SERVICE – DELHI

AddressYAMAHA - PRO SERVICE DELHI;C/o YAMAHA MOTOR INDIA SALES PVT LTD;B-1/F-8;MOHAN CO-OPERATIVE INDL. ESTATE;MASPAR HOUSE;MATHURA ROAD;NEW DELHI – 110044

City New Delhi

Contact Person

Mr Raminder Singh

Phone-office

9810579107

Phone Res 9810579107

Dealer Name

YAMAHA FACTORY SHOP-SAKET

AddressM/S YAMAHA FACTORY SHOP-SAKET;NEW DELHI;C/o YAMAHA MOTOR INDIA SALES PVT LTD;GF-2 & GF-4;MGF METROPOLITAN MALL;SAKET;NEW DELHI – 110017

City New Delhi

Contact Person

Mr Sushil Singh

Phone-office

011-40566962 / 40566963 / 9999192192

Phone Res

Dealer Name

SETCO

AddressMain Shop: M/s SETCO;1/13;WEST PATEL NAGAR;OPP METRO PILLAR NO 201;NEW DELHI - 110008;DELHI.;Branch 1: A-2 Ganesh Nagar ( Pandav Nagar ) Main Road;Opposite Mother Dairy;New Delhi-110092 ;Phone: 011 - 646 444 02;Branch 2 :A-383/1/2 Main National Highway No-8 ;Mahipalpur Extension;New Delhi-110037 ;Phone: 011 - 646 444 01

City New Delhi

Contact Person

Mr Sandeep Dhingra /mr Varun Mahindra / Mr Sukh Sagar Dhingra

Phone-office

011-45539998 / 9810225685 / 01164644401 – 02

Phone Res

Dealer Shop

SETCO

Shop Address

A-2 Ganesh Nagar, Main Road, Opposite Mother Dairy

Shop Contact Person

Mr Varun Dhingra

Shop Contact No

011 - 646 444 02

Shop Email

Dealer Name

PRIME AUTOMATION

Address M/S PRIME AUTOMATION;C-42;MAIN ROAD;EAST KRISHNA NAGAR;EAST DELHI;NEW DELHI - 110051;DELHI

City New Delhi

Contact Person

Mr Arun Goel

Phone-office

09971802095,011-43108835, 43108836, 43108837, 09810035970

Phone Res

Dealer Name

ADARSH YAMAHA

Address AMBIKA YAMAHA;F-26/4;OKHLA INDUSTRIAL AREA;PHASE-II;NEW DELHI – 110020

City New Delhi

Contact Person

Mr Rajiv Kr Kataria

Phone-office

011-40767771/ 011-29215118, 9810082234

Phone Res

Dealer Name

ZOOM ROADY’S

AddressM/S ZOOM ROADY’S;RZ-F-16;MAHAVIR ENCLAVE;NEAR MAHAVIR NAGAR;PALLAM DABRI ROAD;DWARKA. NEW DELHI – 110045;DELHI

City New Delhi

Contact Person

Mr. Virender Arora

Phone-office

09810099299

Phone Res

DEALER GURGAON

Dealer Name PICKUP WHEELS PVT LTD

Address M/s PICK UP WHEELS PVT LTD;G-12;CENTER POINT;PIZZA HUT BUILDING;SUSHANT LOK-1;GURGAON;HARYANA

City Gurgaon

Contact Person Mr Sanjay Bajaj

Phone-office 0124-4228100, 9873820000,9873922000

Phone Res

CORE COMPETENCIESOne of its core competencies is the technologies which it uses. The technologies used by

it comparatively more advanced than its competitors.

4-valve engine

forged parts

roller rocker arm

fuel injection

SALES AND DISTRIBUTION OF HEROHONDA

In DELHI the distribution network it follows is-

The bikes are manufactured at its manufacturing unit in Gurgaon from there it’s supplied to the dealers. The dealers sell it to the customers or the consumers.

Hero Honda has around 760 dealers all over INDIA. Some dealers are 3S and some are 4S which Hero Honda has divided in terms of grades. The 4S dealers provide sales, services, spares and safety where as 3S dealers concentrates on sales, service and spares features.

Manufacturer

Dealers

Customers

There are 15 dealers in DELHI and 2 dealers in GURGAON.

Hero Honda has around 22 service point in DELHI alone. In DELHI it works in collaboration with BHARAT PETROLEUM CORPORATION LTD i.e. this petrol pumps also has a HERO HONDA service work shop known as city works.

Its service centre covers very huge geographical location in INDIA. Around every 300kms the service centre of HERO HONDA is available

Besides this network distribution all over INDIA. It also follows ARD (Authorised Representative of Dealer) in order to cater the rural market.

These ARD'S had been set up in order to capture the rural market throughout INDIA. Although some ARD'S also exist in the urban areas, about 95% of the total ARD'S have been set up to cover Rural India, which gives them lots of advantage over their competitors.

SALES AND DISTRIBUTION OF INDIA YAMAHA MOTORS PVT. LTD.

Manufacturing Plant in Surajpur, Noida Production

Takes Place

Only In Noida

Although the distribution network or strategy followed by all the automobiles companies is almost similar but still there is some slight difference between their approaches. For instance, in case of India Yamaha Motors India Pvt. Ltd. Formerly known as Yamaha Motor India Pvt. Ltd. Strategies its distribution network in the manner that when a bike gets produced in the company i.e. In this case the bike gets produced at the Surajpur plant in NOIDA after which from here it is taken to the DC(also known as Distribution centre) which is usually a storage house of the company for the bikes as all the bikes that are being produced in the company can not be kept in

Bikes taken to Distribution Centers (Primary Storage

Place of Bikes)

Bikes are being sent to all over India according to the demands from various states to a temporary storage house

known as Depots

(Almost one depot in each state)

Dealers in different regions of that particular states places their order

with the depot

Customers

the itself, therefore, this distribution centre acts as the primary storage house for the bikes. This distribution centre takes care of about how much supply of motor cycles is to be sent to which state on the basis of the demand. As the demand for the bikes arises from a particular state, then the distribution centre sends the bikes to those states and there the bikes are being stored in the depots of that state. These depots also acts as the storage space for the company's vehicles and these depots exists in almost every state of India in order to take care the need for the bikes of that state. As and when the dealer places the order for the bikes due to the needs of customers or when he is falling short of a particular model or the dealership does not have the bike in the colour which the customer has demanded then these depot helps in fulfilling their demands. There are around 18 depots all over India.

However the company is planning to bring down the number of depot to 4-5 i.e. each depot for each zone handling the distribution of bikes in India. It has around 500 dealers all over India including 20 in NCR.

Yamaha Motors has also evolved the concept of direct shops in its distribution network which means that these shops are handled by the company itself. Yamaha has these direct shops in the cities like Delhi, Mumbai, Kolkata and Pune. It has around 10-11 dealers in Delhi and also has 3 stockists in Delhi as well.

The greatest feature of India Yamaha Motors India Pvt.Ltd is that it follows the method of both the depot and direct selling to dealers for enhancing its distribution network and it also provides some benefit to its dealers who place the order for the purchase of bikes in bulk like offering them discounts.

COMPARISONS OF THE DISTRIBUTION NETWORK OF HERO HONDA AND INDIA YAMAHA MOTORS PVT. LTD.:-

1) Yamaha Motors distribution takes place through its depot as well as by direct selling to its dealers whereas Hero Hondas distribution takes place through the direct selling to its dealers.

2) Yamaha also has the concept of these direct shops that are also engaged in the distribution work i.e. these shops are directly owned and handled by them for the sale and distribution of their bikes whereas Hero Honda does not have any such concept.

3) Hero Honda has just introduced the concept of City works which is usually a Hero Honda service centre that works in collaboration with the Bharat Petroleum though it's just a source of promotion for them but along with this it has also setup ARD's (known as Authorised representative of Dealer) which is also a dealership that is being setup to cater to the rural market so that the bikes could be also made available in the rural areas thus enhancing its distribution network in the rural markets as well. About total ARD's setup in India around 95% of them have been established to cater or fulfil the rural markets whereas only 5% of them cater to the urban areas.

4) As the sales and distribution set up by India Yamaha is comparatively costlier than that of hero Honda sales and distribution channel. Due to the docs or warehouse set up by them. But in near future they are planning to keep only 4 docs through out INDIA at DELHI, MUMBAI, KOLKATA and CHEENAI. So, that they can able to reduce the sales and distribution cost.

REFRENCES1.) PICK UP WHEELS PVT LTD (India Yamaha)- Mr.Rakesh kr Sidana,.BranchManager

2.) ARC DEALERS (Hero Honda)-Mr Partho Das, Service engineer

3.)www.herohonda.com/distributors.html - Accessed on 14th Jan 2010 at 2.20 p.m.

4.)www.yamahaindia/delhi/distributors.html - Accessed on 14th Jan 2010 at 2.20 p.m.

5.) www.herohonda.com/brandmodels.html - Accessed on 14th Jan 2010 at 2.25 p.m.