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(http://www.authorstream.com/Presentation/nishaa1023-1071314-2-wheeler-industry-india/)
Two-Wheeler Industry in India:
Two-Wheeler Industry in India Presented by: Nisha Arora Ahmed Raza Sandeep Show S. Praveen Reddy Md. Shamim Anwar Rajeev
Kumar Mishra

Roadmap:
Roadmap Overview Market Segmentation Major Players Government Initiatives Technological Advancement Production & sales trend
Herfindahl Index Michael Porters Analysis Issues & Concerns Growth Drivers Outlook

Overview:
Overview India is the 2 nd largest producer of two wheelers Automobile industry contributes 4% to GDP Contributes 76% to Automobile
Industry in volume terms Registered the growth rate of 26.55% in Apr-Feb 2011 Exports recorded growth of 59.3% during Apr-Feb 2011 in
terms of volume Hero Honda, Bajaj Auto and TVS Motor are the leading players Market Penetration-92 vehicle per 1000 people Potential to
emerge as a key contributor to Indian economy

Market Segmentation:
Market Segmentation Motorcycle segment 75 125cc 125 250cc Greater than 250cc Scooter segment Less-than-75cc 75-125cc Greater
than 125cc Mopeds Electric TWs Source:SIAM

Major Players in 2-wheeler Industry:
Major Players in 2-wheeler Industry Source:SIAM

Governments Initiatives:
Governments Initiatives Automobile Industry was delicensed in July 1991 Import of components is freely allowed 100% Foreign Direct
Investment National Automotive Testing and R&D Infrastructure Project (NATRiP) Automobile exports are being promoted through the
Focus Market Scheme (FMS) and the Focus Product Scheme (FPS) Automotive Mission Plan (AMP) 2006-2016

Slide 7:
Increase export revenue to $ 35 billion by 2016 from $ 4.1 billion On 29.01.07, the Prime Minister released Automobile Plan 2006 -2016 to
give a road map to Indian Automobile Industry Indian Automotive Industry Increase turnover to $145 billion by 2016 from $ 35 billion
Provide employment to additional 25 million people by 2016 AMP 2016 By 2016, the Automotive sector is expected to contribute 10% of
the country s GDP and 30~35% of the Industry Government of India SIAM ACMA

Advanced Technologies:
Advanced Technologies DTSi ABS Fuel Injection Digital meters Engine Locking

Sales seen moderation during 2010-11:
Sales seen moderation during 2010-11 The demand determinants of the industry are factors like affordability, product innovation,
infrastructure and price of fuel Source: SIAM

Herfindahl Index:
Herfindahl Index

Michael Porters Analysis:
Michael Porters Analysis Inter-firm rivalry (HIGH) Bargaining power of Buyers (LOW) Threat of Substitutes (MODERATE) Threat of
potential Entrants (MODERATE) Bargaining power of Supplier (LOW) Standard products used in manufacturing Promotional strategies
Availability of Public transport Availability of 4 wheeler in affordable range Capital Investment Differentiation in promot -ion & product
strategy Skilled labour & good R&D Availability of popular brands Full info. about cost & products Consciousness among buyers
Availability of suppliers Low Switching cost

Issues & Concerns:
Issues & Concerns Environmental & safety concerns:- Implementation of emission standards Lack of distribution network Rising input cost
Rise in fuel prices Increasing interest rates Fluctuation in foreign exchange rates for exports Withdrawal of DEPB scheme for exporters
w.e.f Jun 2011

Growth Drivers :
Growth Drivers Rising income levels & middle class population base Good rural demand Young working population Affordable prices Fuel
efficiency & better mileage Inadequate public transport system Easy availability of finance Increasing exports Good alternative for parking
space problem Easy ride in traffic and narrow roads Increasing demand for gearless vehicles from women segment

Outlook:
Outlook Two-wheeler (TW) sales to accelerate at a CAGR of 11-12 % till FY15 Rural penetration to drive growth in the TW domestic
demand Revival in economic buoyancy to push TW demand Replacement demand increasing at a higher pace Motorcycle segment is
expected to grow at a CAGR of 8-9% in next five years Scooter to outpace industry growth Mopeds to remain niche segment Investments of
around Rs.9-10 billion expected in the next two to three years Exports to grow at CGAR 20% till FY15





1. Presented By:Ankur Kejriwal. Group-8 1
2. Introduction. Benefits of Two-Wheeler. Overview. Contribution to G.D.P. Segment Wise Market Share.
Demand Drivers. Influence to Supply Side. Market Share. Export. Effect of G.D.P on Two-Wheeler.
Two-Wheeler Penetration in India. Installed Capacities of Two-Wheeler Companies. Effect of Inflation.
Government Initiatives. Conclusion. Group-8 2
3. India, is the second largest producer of two-wheelers in the world. In the last few years,the Indian two-
wheeler industry has seen spectacular growth. The country stands next toChina and Japan in terms of
production and sales respectively.Majority of Indians, especially the youngsters prefer motorbikes rather
than cars.Capturing a large share in the two-wheeler industry, bikes and scooters cover a majorsegment.
Bikes are considered to be the favorite among the youth generation, as theyhelp in easy commutation.Two-
Wheelers Segment in India:1.Motorcycles.2.Scooters.3.Mopeds. Large variety of two wheelers are
available in the market, known for their latesttechnology and enhanced mileage. Indian bikes, scooters and
mopeds represent styleand class for both men and women in India. Group-8 3
4. Two-wheelers are the most popular and highly sought out medium of transport in India.The trend of owning
two-wheelers is due to its-1.Economical price2.Safety3.Fuel-efficient4.Comfort levelHowever, few Indian
bike enthusiasts prefer high performance imported bikes. Some ofthe most popular high-speed bikes are
Suzuki Hayabusa, Kawasaki Ninja, SuzukiZeus, Hero Honda Karizma, Bajaj Pulsar and Honda Unicorn.
These super bikes arespecially designed for those who have a zeal for speedy drive. Group-8 4
5. The Indian two-wheeler (2W) industry recorded sales volumes of 13.4 millionunits in 2011-12. A growth
of 14.0% over the previous year. In a year where in growth in other automobile segments
particularly,passenger vehicle (PV) and medium & heavy commercial vehicle (M&HCV),slowed down to
single digits. 14% growth recorded by the 2W industry remained steady. The momentum in the 2W
industrys volume growth too has been losingsteam lately as evident from the relatively lower volume
growth of 11.0%recorded in H2, 2011-12 (YoY) against a growth of 17.1% recorded in H1, 2011-12 (YoY).
Group-8 5
6. The deceleration in growth is largely attributable to the motorcycles segmentwhich grew at a much lower
rate of 7.8% (YoY) in H2, 2011-12 vis--vis 16.4% inH1, 2011-12. The scooters segment continued to post
20%+ (YoY) expansion during bothhalves of the last fiscal. The share of the scooters segment in the
domestic 2W industry volumesincreased to 19.1% in 2011-12 from 17.6%. Over the medium term, the 2W
industry is expected to report a volume CAGR of9-11% to reach a size of 24-26 million units (domestic +
exports) by 2016-17. Group-8 6
7. Two-Wheeler Sector Contributes to 6% of Indias G.D.P: Group-8 7
8. Group-8 8
9. Group-8 9
10. Group-8 10
11. Group-8 11
12. Group-8 12
13. Group-8 13
14. Table 1: 2W Penetration in India(Figures in million) 2009-10Total number of households 222Households
(with annual income <90,000) 114Households (with annual income between 90,000-1,000,000)
104Households (with annual income >1,000,000) 42W population in India 802W PenetrationBased on total
number of households 36%Based on addressable income levels 74% Group-8 14
15. Actual Expected*million units 2009-10 2010-11 2011-12Hero Honda 5.4 5.6 5.7Bajaj Auto 3.9 4.5 5.0TVS
2.4 2.8 3.0HMSI 1.6 2.0 2.2Suzuki 0.3 NA 0.5Yamaha 0.6 NA 1.1Royal Enfield 0.7 0.7 NAMahindra 2W -
0.5 0.5 Group-8 15
16. Least affected by the prevailing headwinds in the industry: The Indian twowheeler manufacturers are the
least impacted by adverse forces such asrising prices of fuel, rising interest rates and commodity inflation.
The addition to the fuel bill of a typical twowheeler owner, following a 10% rise in theprice of petrol, is
estimated at c0.2% of pretax income. The corresponding impact for acar owner is estimated at c0.5% of
pretax income. the adverse effect of an increase in commodity prices such as steel and aluminum
ismarginally lower for twowheelers in comparison to passenger vehicles. Growth in twowheeler sales has
been led by the rural segment, which comprised 45%of total sales in FY11.. regardless of the headwinds,
we believe the structural story in the twowheelersegment is still intact and the segment is estimated to
grow at a CAGR of 12% over FY12fFY14f. Group8 16
17. The Indian government encourages foreign investment in the automobile sector andallows 100% FDI
under the automatic route. It is a fully delicensed industry, freely allowingimports of automotive
components. The government has made successive policy changes that allow for stronger growth in
theautomotive sector. Major among these are: 1. Automotive Mission Plan: The plan has been prepared to
accelerate and sustain growth in the automotive sector during the period 2006 2016. It aims to make India
a global automotive hub. This will involve doubling the contribution of the automotive sector to the countrys
GDP by taking its turnover to USD 145 billion and providing additional employment to 25 million people with
special emphasis on the export of small cars, MUVs, two and threewheelers and auto components. 2.
National Automotive Testing and R&D Infrastructure Project: This is a USD 400 million initiative of the
Government of India and various state governments; it is aimed at creating a stateofart, dedicated testing,
validation and R&D infrastructure across the country. Group8 17






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