The sector grew y 12 percent in 2011-12. This subsequent is further divided on the basis of launch prices into premium , executive and economy. The executive segment is the major contributor of sales followed by economy. Scooter segment is dominated by ‘ Honda Motorcycles and Scooters India (HAMS)’, an Indian subsidiary of Honda Motor Company, Japan. It has 48 percent market share by volume of scooters. Let Is the fastest growing subsequent. Mopeds subsequent constitute around 6 percent by volume and Is dominated by TV’S’.
Environment Analysis Operating in India has given competitive advantage to the two wheeler manufacturers so that they are able to export to countries in Africa, Latin America and South Asia. Factor Conditions Firstly, availability of cheap labor has helped the companies to manufacture at lower costs as compared to Japan and Europe. Also , Indian companies has been able to get access to technology due to collaborations with International two wheelers manufacturers. Hero collaborated with Honda in 1983 which lasted till December 2010. Baja] Initially collaborated with Pigging first and then Sukiyaki.
Similarly , TV’S had a venture with Suzuki motorman’s. This has further helped in reduction of costs due to lesser spending on R&D leading to a competitive advantage. Demand Conditions Due to lower per capita income as compared to Europe and America, the focus has been on cost by customers in India. Also due to growing middle class, the motorcycle manufacturers have focused heavily on executive segment. The similar demand condition in South Asian countries like Krishna and Bangladesh and Latin America has helped in growth exports of exports.
The demand of Africa is also on cheaper motorcycles which presents a huge opportunity for Indian manufacturers, articulacy In economy segment. Related and Supporting Activities The supporting Industries mainly Is divided Into automotive components and tares. The major players In automotive components have been Small and medium scale enterprises. Due to government support for Seems, the industry has grown-This has concentrated into seven major players. However strong growth of exports restricts the price of tares.
Firm Strategy,Structure and Rivalry Indian manufacturers have followed a low cost strategy . Due to the high volumes, manufacturers have achieved economies of scale. To further support their low cost strategy,manufacturers have maintained an efficient supply chains. Efficiency in supply chain has been achieved to by consolidating vendors and helping vendors source technology from abroad Competition in the industry is high and will further intensify due to entry of new players and reentry of some other players.
Global players like Yamaha, Suzuki and Honda have started direct presence in India. These players have diverse product portfolio and vast industry experience. Reentry of old players like ELM and Pigging will further intensify the battle. Hero Motor Corp. The company was established initially as ‘Hero Honda Motors Company’ in 1984 as a result of Joint venture with Honda motor company of Japan in 1983. The collaboration ended in 2010 and it was renamed to Hero Motor Corp. in 2011. It is the largest manufacturer of two wheelers in the world.
The company has highest market share in Indian market owing to wide product portfolio and strong distribution network Under motorcycle subsequent, the company has been extremely successful due to success in executive segment (market share of 65% in motorcycle segment), in which it has a share of around 69 percent. The company has not been very successful in the premium segment In scooter subsequent which is the fastest growing subsequent, Hero has been successful in increasing the market share of its Model ‘Pleasure’ to 10 percent to 16 percent by April 2012. It is trying to further gain market share by the launch of another model ‘Maestro’.
Exports Hero was having limited presence in the export market due to restrictions on import by Honda Motor Company. So Upton now, Hero motors exported primarily to Indian subcontinent I. E Sardinia,Bangladesh, Nepal and also to Colombia. With the end of Joint venture Hero is exploring options of going to venture into new markets like Africa and Latin America and increasing its foothold in south east Asian countries HAMS Honda Motorcycles and Scooters India(Hams) HAMS is the wholly own subsidiary of Honda Motor Company Japan established in 1999. It is the third largest manufacturer of scooters in India.
The major foothold of HAMS is in the scooter sector in which it has a market share of around 48 percent In motorcycle subsequent, company has a share of around 8 percent. It has tried to launch some new models to gain share but as been ineffective. It is not present in economy segment as of now due to the agreement with Hero Motto corps. With the end of Joint venture, the company is targeting to gain share in the economy segment Exports HAMS exports scooters and motorcycle to Europe, Middle east, South East Asia Latin America, West Asia, Bangladesh, Sardinia and Latin America.
However due to strong presence of its parent company, Honda in Europe and Latin America, the export to these regions are limited and the main focus of HAMS is to increase its domestic market share. TV’S Motto Corp. It was started as the first Indo Japanese motorcycle venture in 1982 as TV’S Suzuki 000-01 after which it was renamed as TV’S Motor Co Ltd. TV’S has fallen to 4th rank in terms of Market volume share and is loosing market share continuously owing primarily to lackluster performance in the executive and economical motor cycle segment.
Even in the scooter subsequent, it is facing stiff competitions from HAMS and Hero which have launched heavy non-gear scooters. This has forced TV’S to change its focus from lighter scooters to heavier ones and it has recently launched a new scooter ‘Wage’ in the segment. The major foothold of TV’S has been in moped subsequent where it is the market leader. The segment is growing at a healthy speed of around 17 percent for the last 5 years. Exports TV’S has a manufacturing facility at Agrarian (near Jakarta), Indonesia. T produces its premium segment model ‘ Apache’ and step thru motorcycles such as ‘Neo’. TV’S is expected to start assembly plants and distribution centers in markets such as Turkey,Nigeria and Thailand to increase its global presence. Current Situation Baja] Auto Limiter’s market share has been loosing its market share continuously from the past five years and it has declined to 23. 2 percent in 2007 to 19. 1 percent in 2011. The company has been loosing its foothold in the premium,its mainstay in the Indian market, mainly to Yamaha which has launched new bikes like Faze,FEZ 16 and SO.
BAL market share has declined to 45. 5 percent in 2011 from 52. 8 percent in 2007 in premium segment while market share of Yamaha has increased to around 15 percent. In order to counter this competition Baja] has been focusing on increasing its reach by increasing dealerships in particular in rural and semi urban areas. Dealerships have been increased to 589 from 159 by the end of the year 2012. Also it has been comic up with new and innovative financing strategies to grow its racket share. One of the scheme launched has been Direct Cash Collection (DDCD).
Under DDCD, Baja] provides financing options to customers who do not have a bank account or salary slip based on his ration card or voter identity card. This scheme has been particularly helpful in increasing market penetration in rural areas where customers can pay lump sum or fixed amount any month depending upon their requirement. Other strategies adopted by Baja] has been to increase its share in executive segment, which is the highest contributor in market sales by volume and is nominated by Hero Motto Corps. Baja] was having only 22 percent market share in executive segment as compared to Hero’s share of around 65 percent.
It launched ‘Boxer 150’ and ‘Plating 125’ , upgraded executive segment versions of its economy segment models but had to discontinue model in domestic market due to dismissive sales. It also launched Discover 125, executive model of its successful brand ‘Discover’. The model has received good response but it has cannibalized the sales maintain its position in premium segment ,Baja intends to launch Pulsar 350 in its LULAS range of motorcycles which have been highly successful in Indian as well as export market.
Also it has formed a Joint Venture with KIT, an Austrian motorcycle manufacturer in 2008. As per the agreement, the two companies will Jointly develop 4 stroke 125 c and 250 c engines for which KIT will be providing technical know how. Also as a part of the agreement Baja] also has taken control of distribution of KIT products in India and some other Southeast Asian nations. Baja] started production of KIT 200, a premium segment 200 c bike from India from January 2012 which is priced at around RSI 1. 7 lash.
Baja] plans to convert its pro-biking showrooms through which it currently sells Sukiyaki Ninja bikes into KIT showrooms where it will be also selling premium KIT bikes along with Ninja. It has also started 40 service centers which are dedicated to KIT. Recently it also announced the launch of KIT 350 an off road bike in India. This would have been profitable as government of India allowed a confessional import duty of only 10 percent on Completely Knock Down (CD) units as compared to normal import duty of 60 percent.
