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
MRS. REKHA GULIA

SUBMITTED BY
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

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

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

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

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.

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

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

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.

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 HeroHonda 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, multiproduct, 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
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-theart bicycles and allied products in its fully automated plant at Waghodia.

14

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.

15

HERO GROUP ACHIEVEMENTS

Hero Group ranks amongst the Top Indian Business Houses comprising of 18 profitmaking 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.

16

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

18

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 2wheelers (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. Its 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 cityclutch, 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.
21

22

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 doesnt 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.

25

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.
Thats 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 threewheelers), home appliances, lighting, iron and steel, insurance, travel and finance.
The groups flagship company, Bajaj Auto, is ranked as the worlds fourth largest twoand 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
28

global market. He is one of Indias most distinguished business leaders and

internationally respected for his business acumen and entrepreneurial spirit.

29

MILESTONES

30

2005
December
June
February
2004
Sept/Oct
August
May
January
2003
October
October
July

Bajaj Dicsover launched

Bajaj Avenger launched
Bajaj Wave launched
Bajaj Discover DTS-i launched
New Bajaj Chetak 4 stroke with Wonder Gear launched
Bajaj CT100 Launched
Bajaj unveils new brand identity, dons new symbol, logo and brandline
Pulsar DTS-i is launched.
107,115 Motorcycles sold in a month.
Bajaj Wind 125,The World Bike, is launched in India.
Bajaj Auto launched its Caliber115 "Hoodibabaa!" in the executive motorcycle

February
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.
July 25th
Legend, Indias first four-stroke scooter rolls out of Akurdi.
October
Spirit launched.
1997
The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw are introduced.
1995
November
Bajaj Auto is 50.
29
Agreements signed with Kubota of Japan for the development of diesel engines
for three-wheelers and with Tokyo R&D for ungeared Scooter and moped
development.
The Bajaj Super Excel is introduced while Bajaj celebrates its ten millionth
vehicle.
One million vehicles were produced and sold in this financial year.
1994
1991

31
The Bajaj Classic is introduced.

BAJAJ PRODUCTS

32

33

34

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.

35

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.

36

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

41

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

(A) Business

(B) Personal

(C) Leisure

(D) Status

42

Q3:- would you like to change your bike from any other companys bike
in the same Segment?

(A)

Yes

(B)

No

43

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

(A) Yes
(B) No

44

Q5:->Are you satisfied with the services Provided to you by the company
if Yes or No? Why?

45

Reason for dissatisfaction

46

Q6:->which facilities would you need ?

47

Q8:->Do you get spare-parts of your bike easily from the market ?
(A) Yes
(B) No

48

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

(A) Brand
(B) Price
(C) Features
(D) Service
(E) Dealers advice
(F) Promotion schemes

49

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

(A) Yes
(B) No

50

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

52

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.

53

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
Its 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.

Its 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 twocategories 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% customers 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 Indias 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 2wheeler 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 companys 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) Dealers 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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