Industrial Review Project On Banking Two-Wheeler Industry

Industry Review Project
Submitted in partial fulfillment of the requirements for the award of the
Degree of Bachelor of Business Administration
Of Christ University
By
Anant Murarka (1620606), Rohan Somani (1620634), Anuj Srinivas Udupa (1620683)
Under the guidance of
Prof Mahesh Kumar Sharda
Department of Management Studies
2018
2
DECLARATION
We, Anant Murarka (1620606), Rohan Somani (1620634), Anuj Srinivas Udupa (1620683),
hereby declare that the Industry Review Project Report, submitted to Christ University, in
partial fulfillment of the requirements for the award of the Degree of Bachelor of Business
Administration is a record of the Industry Analysis done by us during 2018 under the
supervision and guidance of Prof Mahesh Kumar Sharda Class Teacher’s name, Department
of Management Studies and it has not formed the basis for the award of any Degree/
Diploma/ Associate ship/ Fellowship or other similar title of recognition to any candidate of
any University.
Date: Anant Murarka

(1620606)
Rohan Somani
(1620634)
Anuj Srinivas Udupa
(1620683)

3
CERTIFICATE
This is to certify that the industry review project report, submitted to Christ University, in
Administration, is a record of the industry study done by Anant Murarka (1620606), during
2017-18, under my supervision and guidance and the project report has not formed the basis
for the award of any Degree/ Diploma/ Associate ship/ Fellowship or other similar title of
recognition to any candidate of any University.
Date: Prof. Mahesh Kumar Sharda

(Class Teacher)

4
CERTIFICATE
Administration, is a record of the industry study done by Rohan Somani (1620634), during
2017-18, under my supervision and guidance and the project report has not formed the basis
for the award of any Degree/ Diploma/ Associate ship/ Fellowship or other similar title of
recognition to any candidate of any University.

(Class Teacher)

5
CERTIFICATE
Administration, is a record of the industry study done by Anuj Srinivas Udupa (1620683),
during 2017-18, under my supervision and guidance and the project report has not formed the
basis for the award of any Degree/ Diploma/ Associate ship/ Fellowship or other similar title
of recognition to any candidate of any University.

(Class Teacher)

6
ACKNOWLEDGEMENT
We would like to express our profound gratitude to all those who have been instrumental in
the preparation of this project report. We wish to place on record, our deep gratitude to our
project guide Prof Mahesh Kumar Sharda, a highly esteemed and distinguished guide, for her
expert advice and help.
We would like to thank Hon. Col. Dr. (Fr.) Thomas C Mathew, Vice Chancellor, Christ
University, Dr. Jain Mathew, Associate Dean, Department of Management Studies, Christ
University, Dr. Amalanathan S, Head of Department, Department of Management Studies,
Christ University, for their support.
Lastly we would like to thank God, our Parents and Friends for their constant help and
support.
Anant Murarka
(1620606)
Rohan Somani
(1620634)
Anuj Srinivas Udupa
(1620683)

7
Table of Contents
Page. Nos.
(Starting and
ending page
Chapter Content number)
I Introduction to the Industry 9-27
Company Profile
II
• Company 1 28-41
• Company 2 42-61
• Company 3
62-79
III Research Methodology 80-82
Comparative Analysis
(…of three companies from the industry on a given

IV parameters) 83-92
V Findings and Conclusion 93-94
Bibliography and Annexure 95

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CHAPTER I

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INTRODUCTION TO THE INDUSTRY
History of Two wheeler industry in India
The Indian two-wheeler industry since its beginning, has evolved many folds in technology
and, in the numbers being manufactured and produced. It has seen tremendous growth in
about half a century, in comparison to other countries where two-wheelers are a major
component of transportation. The inception of the industry dates to 1955, when the first ‘350
cc Bullet’ bikes were commissioned by the Indian army. The rough terrains and harsh
conditions with narrow passageways needed strong motorcycles for the Western and
Northernmost regions of India. These bikes were manufactured by the ‘Royal Enfield’
company of the United Kingdom and assembled in Chennai.
Journey of Two Wheeler Industry in India
The three segments of motorised two-wheelers are Motorcycles, Scooters and Mopeds. The
journey of the Indian Two-wheeler industry can be described briefly based on the
advancements in these segments.
With such humble beginnings, during the decade that led up to 1970, the two-wheeler
industry received encouragement for foreign Collaborations. The production was controlled
by the government with licensing, to meter the number of units being produced in the plants.
The table3 shows the major players in the industry during this time frame.
Period of Entry 1955-1969

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The decade between 1970-80, perceived an increase in the overall growth of the industry, on
an average of about 15% per annum. Between 1974-79, sales of two-wheelers increased by
60%, while that of cars declined by 21% and jeeps grew only by 11%4. The main contributing
factor to this increase was a steep hike in the oil prices in 1974. The price hike, converted
most of the car and jeep owners or prospective users of this segment to two-wheeler
buyers/users. This was due to better fuel efficiency of two-wheelers over cars or jeeps. Thus
the two-wheeler became a popular mode of personal transport.
The 70’s saw a surge in the number of local players of manufacturing units. Between the
1980-90’s, the policies again saw a shift towards allowing foreign collaboration for below
100cc. This brought a whole new realm into the industry, through foreign companies that had
advanced technologies, mainly for the motorcycle segment. Fuel-efficiency improved by (60-
100) % in the new vehicles. In the seventies, motorcycle mileage was on an average between
25 to 50 kmpl (kilometre per litre), which had now improved to 50 to 80 kmpl. One major
occurrence of this decade was that several existing but weaker players died out giving way to
new entrants and superior products.

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The decade leading upto the end of the millennium, i.e., 1990’s saw a complete liberalisation
of the economy. The industry was deregulated, with several reforms to make Indian exports
competitive. There was an increase in the number of brands and thus the models and higher
competition. This also led to reduction in the sales for each individual brand. The recession of
1993-945, gave way for a decline in the sales numbers. The reasons for recession in the sector
were the incessant rise in fuel prices, high input costs and reduced purchasing power due to
significant rise in general price level and credit crunch in consumer financing. The market
improved and made tremendous progress towards the end of the millennium, nearing the year
2000.

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As an overview, the increase in sales volume of this industry is proof of its high growth. In
1971, sales were around 0.1 million units per annum. But by 1998, this figure had risen to 3
million units per annum. Similarly, capacities of production have also increased from about
0.2 million units of annual capacity in the seventies to more than 4 million units in the late
nineties.
Evolution of the Indian two-wheeler industry
The two-wheeler industry (henceforth TWI) in India has been in existence since 1955. It
consists of three segments viz., scooters, motorcycles, and mopeds. The increase in sales
volume of this industry is proof of its high growth. In 1971, sales were around 0.1 million
units per annum. But by 1998, this figure had risen to 3 million units per annum. Similarly,
capacities of production have also increased from about 0.2 million units of annual capacity
in the seventies to more than 4 million units in the late nineties4 . The TWI in India began
operations within the framework of the national industrial policy as espoused by the
Industrial Policy Resolution of 1956. (See Government of India 1980, 1985, 1992). This
resolution divided the entire industrial sector into three groups, of which one contained
industries whose development was the exclusive responsibility of the State, another included
those industries in which both the State and the private sector could participate and the last
set of industries that could be developed exclusively under private initiative within the
guidelines and objectives laid out by the Five Year Plans (CMIE, 1990). Private investment
was channelised and regulated through the extensive use of licensing giving the State
comprehensive control over the direction and pattern of investment. Entry of firms, capacity
expansion, choice of product and capacity mix and technology, were all effectively controlled
by the State in a bid to prevent the concentration of economic power. However due to lapses
in the system, fresh policies were brought in at the end of the sixties. These consisted of
MRTP of 1969 and FERA of 1973, which were aimed at regulating monopoly and foreign
investment respectively. Firms that came under the purview of these Acts were allowed to
invest only in a select set of industries. This net of controls on the economy in the seventies
caused several firms to a) operate below the minimum scale of efficiency (henceforth MES),
b) under-utilize capacity and, c) use outdated technology. While operation below MES
resulted from the fact that several incentives were given to smaller firms, the capacity under-
utilization was the result of i) the capacity mix being determined independent of the market
demand, ii) the policy of distributing imports based on capacity, causing firms to expand

13
beyond levels determined by demand so as to be eligible for more imports. Use of outdated
technology resulted from the restrictions placed on import of technology through the
provisions of FERA. Recognition of the deleterious effects of these policies led to the
initiation of reforms in 1975, which took on a more pronounced shape and acquired wider
scope under the New Economic Policy (NEP) in 1985. As part of these reforms, several
groups of industries were delicensed and ‘broadbanding’ 5 was permitted in select industries.
Controls over capacity expansion were relaxed through the specification of the MES6 of
production for several industries. Foreign investment was allowed in select industries and
norms under the MRTP Act were relaxed. These reforms led to a rise in the trend rate of
growth of real GDP from 3.7% in the seventies to 5.4% in the eighties. However the major
set of reforms came in 1991 in response to a series of macroeconomic crises that hit the
Indian economy in 1990-917. Several industries were deregulated, the Indian rupee was
devalued and made convertible on the current account and tariffs replaced quantitative
restrictions in the area of trade. The initiation of reforms led to a drop in the growth of real
GDP from 1990 – 1992, but this averaged at about 5.5% per annum after 1992. The decline in
GDP in the years after reforms was the outcome of devaluation and the contractionary fiscal
and monetary policies taken in 1991 to address the foreign exchange crisis. Thus the
Industrial Policy in India moved from a position of regulation and tight control in the sixties
and seventies, to a more liberalized one in the eighties and nineties. The two-wheeler industry
in India has to a great extent been shaped by the evolution of the industrial policy of the
country. Regulatory policies like FERA and MRTP caused the growth of some segments in
the industry like motorcycles to stagnate. These were later able to grow (both in terms of
overall sales volumes and number of players) once foreign investments were allowed in 1981.
The reforms in the eighties like ‘broadbanding’ caused the entry of several new firms and
products which caused the existing technologically outdated products to lose sales volume
and/or exit the market. Finally, with liberalization in the nineties, the industry witnessed a
proliferation in brands. A description of the evolution of the two wheeler industry in India is
usefully split up into four ten year periods. This division traces significant changes in
economic policy making. The first time-period, 1960-1969, was one during which the growth
of the two-wheeler industry was fostered through means like permitting foreign
collaborations and phasing out of non-manufacturing firms in the industry. The period 1970-
1980 saw state controls, through the use of the licensing system and certain regulatory acts
over the economy, at their peak. During 1981-1990 significant reforms were initiated in the
country. The final time-period covers the period 1991-1999 during which the reform process

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deepened these reforms encompassed several areas like finance, trade, tax, industrial policy
etc.
Major Players and their market share
Insights from the above data
• Hero Motocorp and Bajaj auto have lost market share. Bajaj auto has taken the biggest hit
its market share has nearly halved from FY11, however Bajaj is the largest exporter of 2W
from India, and it exported 1.21 million bikes in FY17. Hence its total sales during the year
were 3.21 million units • HMSI and Royal Enfield are the biggest gainers. HMSI has grown
its sales at 20% CAGR during this period driven mainly by its scooter segment. It has more
than doubled its market share. HMSI exported 283163 million units; it was the third largest
exporter of 2W in FY17. Total sales stood at 5 million units
• Royal Enfield has grown its sales at 55% CAGR, Royal Enfield directly competes with
Bajaj auto and its is evident that bajaj has lost its market share to Royal Enfield
• Others include Harley Davidson, Yamaha Motor, Mahindra, Piaggio, Kawasaki and
Trimuph

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Domestic Scooter Market
Domestic sales of scooters stood at 5.6 million units for year ending FY17. Domestic scooter
sales have grown at 16% CAGR for period FY14-17. There are 7 players currently in the
scooter market. Three players Hero Motocorp, Honda motorcycle Er scooter India (HMSI)
and TVS motors control 92% of the domestic market. HMSI is the leader in the market,
having a 60% market share. Honda sold 3.35 million units in FY17. Honda Activa is their
best-selling model and highest selling scooter in India, Activa sales for FY17 were 2.75
million units. The other best-selling models from the stable of Honda are Dio and Aviator
with sales of 264516 and 108683 respectively. Hero Motocorp sold 0.94 million units in
FY17 and control 17% of the market. The best-selling models from hero are Maestro, Duet
and Pleasure with sales of 378347,265223 & 146404 respectively in FY17. TVS motors sold
0.82 million units in FY17 and has 15% market share. The best-selling model from TVS is
Jupiter which sold 0.61 million units in FY17. It is also worth noting that Honda's market
share in FY13 was 49% and stood at 60% in FY17. The overall market has grown from 2.92
million units to 5.6 million units, 18% CAGR. In the same period sales of Honda have
increased from 1.42 million units to 3.35 million units, 24% CAGR. While the total pie has
grown, Honda is capturing a larger piece of that pie.

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Domestic Motorcycle Market
Domestic motorcycle sales stood at 11.09 million units in FY17. Sales have grown at 2%
CAGR in the period FY13-17. There are 11 players in the motorcycle market. Five players
Hero Motocorp, Bajaj auto, HMS], TVS motors and Royal Enfield control 93% of the
market. Hero Motocorp is the leader with 50% market share; Splendor is the largest selling
motorcycle in the country with sales of 2.5 million units in FY17. Other models of Hero —
passion, HF deluxe & glamour have sold 870382, 1408356 & 743978 million units
respectively. Bajaj auto has a market share of 18% and its top models are pulsar, plating and
CT100 with sales of 582912,383545 & 452712 respectively in FY17. HMS! has a market
share of 12%, its top model is CB shine with sales of 749026. TVS and Royal Enfield have
market shares of 7% and 6% respectively. Bajaj auto has been losing market share since
FY13, its market share then was 24% compared to 18% in FY17. Hero Motocorp has also
lost market share since FY13, it was 53% versus 50% in FY17. The beneficiary of this has
been Royal Enfield, which had a market share of 1% in FY13 and currently enjoys a market
share of 6%. It also needs to be noted that Bajaj auto is the leader in exports, it exported 1.21
million units in FY17, comprising 52% of total exports of 2W from India. Bajaj auto is only
present in the motorcycle segment.\

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Industry Growth Rate and Turnover
Operating profits of Bajaj and Hero Motocorp have increased when compared to FY15, the
volume growth of both these companies since FY15 is in single digits, however there has
been an improvement in operating margins, this may be due to the below reasons
• Higher realization per vehicle sold
• Fall in input prices (raw materials)
• Company has been able to manage fixed costs efficiently
• Efficient use of working capital Net profits of both these companies have improved, the
companies have negligible debt and benefits at the operating level have been passed to the
bottom tine
According to Society of Indian Automobile Manufacturers (SIAM) report, the top ten two
wheeler manufacturers combined to sell a total of over 1.70 crores two-wheelers in 2016 as
against 1.55 crores units in CY 2015, thereby registering a growth of 9.1 percent.

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India’s largest two-wheeler manufacturer Hero Motocorp sold over 65.80 lakh units
registering a growth of 4.5%. The company sold about 62.96 lakh units in Jan-Dec 2015
period. Following up with Hero is its former business partner Honda Motorcycles and
Scooter India (HMSI), which registered a growth of 9.6% by selling over 47.27 lakh units as
against 43.14 lakh units in CY 2015.
Hosur based TVS Motor Company continued at the 3rd sport. The company grew by over
15% by selling over 24.83 lakh two-wheelers in the domestic market in CY 2016 as
compared to 21.45 lakh two-wheelers in the same period of 2015. TVS reintroduced its
Victor 110 motorcycle and also launched Apache RTR200 4V in the Indian market in 2016.
Yamaha and Royal Enfield also posted a growth of 32.3% and 40% respectively. Mahindra
did make some noise in 2016 by acquiring JAWA and BSA but its 2-wheeler business shrank
by 54.2%. The company sold 69,106 units in 2016 as against 1.51 lakh units in CY 2015.
Evolution of the Policy Framework
The Indian auto policy has generally been in line with the prevailing industrial policy
framework. During the British regime, India had no auto industry to begin with and all the
automobiles were imported from the global auto manufacturers such as General Motors and
Ford Motors. In the 1940s, Hindustan Motors and Premier Motors were established by Indian
entrepreneurs, by importing know-how from General Motors and Fiat respectively. In the
1950s, a few other companies such as Mahindra and Mahindra, Ashok Motors (with
Technical Collaboration with Leyland Motors) and Bajaj Auto entered the market for
commercial vehicles and two-wheelers. Most of them either imported auto components or
produced them in-house, till mid-1950s, when India launched import substitution programme.
This development, followed by the L.K. Jha Committee’s recommendations in 1960 to

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develop an indigenous ancillaries sector, resulted in the evolution of a separate auto-

component sector. From being a highly protected segment pre1980s, the auto-component
industry in India has emerged into a global player, supplying not only to domestic firms but
also to numerous foreign Original Equipment Manufacturers (OEMs). Till 1991, the Phased
Manufacturing Programme (PMP), under which domestic OEMs had to increase the
proportion of domestic inputs over a specific time period, had laid foundation for the Indian
auto-component sector. However, assured demand for their products had rendered many
players in this sector inefficient. This led to abolition of this programme under the New
Industrial Policy of 1991. Passenger car segment was restricted to licensed production.
Commercial vehicles and two-wheelers were also restricted by licenses, but the extent of
restrictions was less and hence there were quite a few new entrants in these segments in the
1980s, especially in the CV segment.
The reforms of 1991, followed by the entry of global OEMs and Tier-1 suppliers in India,
paved the way for expansion of range, technologies and number of auto-component
manufacturers. This led to a major transition in the Indian auto industry, wherein the vehicle
manufacturers started outsourcing most of their components from the auto component
manufacturers. Ever since the delicensing of passenger car segment in 1993, the Indian auto
industry has grown bigger, with new international players entering the market. Since 2000,
there have been many significant policy developments such as removal of Quantitative
Restrictions (QRs) on auto imports and permission for 100 per cent FDI. Financial
liberalization in the early 1990s enhanced credit availability to consumers and this, in turn,
led to a boost of auto loans in India, which was a key driver of demand for automobiles. This
facilitated the transition of passenger cars from being regarded as luxury goods, accessible
only for the elites, to necessary goods, accessible to a wider section of the society.
Since 2000, India has been observing a Safety Decade. Efforts have been made for aligning
Indian safety standards with global ones. Roadmap has been prepared till 2007 for safety
standards, while an outline has been drawn till 2010. The National Road Safety Board is
under active consideration by the government, which will be responsible for road-related
measures, vehicle-related measures and research on road safety. One of the major measures,
which is likely to be implemented in the near future, is the measurement of road-worthiness
of vehicles, based on which a regulatory body under the government may be engaged in
certifying, whether a motor vehicle is road-worthy or not, in terms of emissions and safety.

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Auto policy, 2002, stresses on the need to provide direction to the growth and development of
the auto industry in India. This policy document resulted in reduction of duties in the auto-
component sector to a large extent and the automobile sector to some extent and extension of
R&D incentives to the auto sector. R&D thrust by the government can be inferred from the
recent measures such as 150 per cent weighted deduction on R&D expenditure and increased
R&D budget allocation for this sector. In 2005-06, a few major policy developments relevant
for the auto sector took place in India. Implementation of VAT has taken place in a few
states. Euro III emission norms have been introduced in 11 metro cities and at the same time,
the Euro II norms have been implementation in rest of the cities. These norms have been
delayed for the diesel vehicles due to the unavailability of fuel. Therefore, the government
has decided to implement these norms in phased manners in selected northern states. Finance
Bill 2006 reduced excise duty of motor vehicles to 12.5 per cent against 15 per cent before
and import duty of raw materials to 5-7.5 per cent against 10 per cent before and has given a
thrust to the development of infrastructure, which is the key factor influencing auto industry,
both as a driver of demand and as a facilitator of enhancing competitiveness in manufacturing
of auto products.
The introduction of above mentioned norms, in addition to safety and noise norms have led to
the increase in the workload on the Automotive Research Association of India (ARAI) testing
facilities. Keeping this in mind, the Government of India has made various efforts to improve
the testing facilities. These include the approval of two proposed additional testing facilities,
upgradation of the ARAI & Vehicles Research and Development Establishment (VRDE),
establishment of a world class test track and building of a few additional centres under the
NATRIP in and around the major auto hubs in India. This is an industry-government joint
initiative, involving an investment of₹. 1,718 crores. The additional centres would be set up
in Manesar, Pune, Ahmednagar, Chennai and Indore. Efforts have also been made to promote
alternative fuels. For this, the following three initiatives have been launched:
1. Agreement with the sugar industry on the off-take of ethanol has been made.
2. An action plan has been prepared to grow and procure bio-diesel at fixed price.
3. Hydrogen energy roadmap has been prepared by Ratan Tata.

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According to this roadmap, 10 lakh hydrogen-fuelled vehicles will be produced by 2010. The
accession to the UNWP (United Nations Working Party) 29 -1998 is another important
decision taken by the Indian Government in 2005-06. This agreement will prove a significant
step towards the global integration of the Indian auto industry. A great deal of progress has
been made on bilateral and regional trade agreements. The bilateral agreement with Chile and
Singapore and regional agreements with SAFTA (South Asian Free Trade Agreement) and
MERCOSUR (Southern Common Market) have been concluded, while the bilateral
discussion with Thailand and regional discussions with ASEAN and BIMSTEC (Bay of
Bengal Initiative for MultiSectoral Technical and Economic Cooperation) have reached the
final stage. In August 2006, a Draft of Automotive Mission Plan Statement was released by
the Ministry of Heavy Industries, in consultation with industry. This was released as a report
in December 2006. This document draws an action plan to take the turnover of the
automotive industry in India to US$145 billion by 2016 with special emphasis on small cars,
MUVs, two-wheelers and auto-components. Measures suggested include setting up of a
National Auto Institute, upgrading infrastructure, cutting the duties of raw materials and
fiscal incentives for R&D.
In August 2006, the Working Group on Automotive Industry in the Ministry of Heavy
Industries has brought out a report for the Eleventh Five Year Plan. This document stresses
on the need of speeding up the move towards VAT in the states and GST at the Centre.
Labour regulations, paperwork involved in government-related transactions, internal trade
barriers, infrastructure bottlenecks, raw materials, human capital, increasing interest rates and
threats due to FTAs are, as mentioned in this document, barriers to competitiveness. This
report notes that the effective levy is lower for a Counter-Vailing Duty (CVD) than excise
duties locally, because of the fact that excise is made after including the post-manufacturing
expenses in the price, while imported Completely Built Units (CBUs) have the advantage of
being levied the CVD before post manufacturing expenses. In addition, the document
recommends various other measures such as upgrading human resources, mandatory
inspection and control and retirement of vehicles based on road-worthiness. import tariffs of
commercial vehicles to 10 per cent is expected to induce further competition in the Indian
commercial vehicles sector. Since CVs are required in the development of infrastructure, duty
reduction on CVs may give a boost to infrastructure. Increase in total tax burden is certain to
occur now, because of the increase in educationcess from 2 per cent to 3 per cent of total
taxes. Extension of R&D incentives for five more years, reduction of Central Sales Taxes

22
(CST) and increased infrastructural expenditure are positive features of the budget, for auto
sector.
Emission and Safety Standards
In India, safety standards were introduced in the 1960s in auto components, while the Central
Motor Vehicles Rules came into existence in 1989. In 1991, the first state emission norms
came into 125 force for petrol vehicles and in 1992 for diesel vehicles. From April 1995,
fitting of catalytic converters in new petrol-driven passenger cars was mandated in the four
metros and unleaded petrol was also introduced. From April 2000, unleaded petrol is
available in the entire country. As for road safety, numerous awareness programmes are
arranged all over the country, since 2000-10 is a safety decade. In developed countries, lead
was phased out from petrol over a period of more than 10 years, while in India this was
achieved in just six years. The time gap between the introduction of norms in Europe and
India is narrowing down gradually. Euro I was introduced in the EU in 1983, while the same
was introduced to India in 1996. Euro II was introduced in the EU in 1996-97. Bharat Stage-
II norms, which are the Indian counterparts of Euro II, have been introduced for smaller
passenger vehicles (Gross Vehicle Weight < 3.5 tonnes) in 2000, and for heavier vehicles
(Gross Vehicle Weight > 3.5 tonnes) from 2001 in National Capital Region of Delhi. For
Mumbai, Chennai and Kolkata, these standards were extended to different months in 2001.
Later, these norms were extended to the rest of the country in phases by 2005. However, for
some categories of vehicles such as two-wheelers and three-wheelers, new generation norms
are yet to be announced. Bharat Stage-III norms have been implemented in many Indian
states in phases. There are numerous other policy initiatives from the government and
industry to encourage adoption of environment-friendly technologies, such as hydrogen
energy initiative by Tata and a few other government policies enumerated in the previous
subsection. However, there were some contradictions and policy changes in North-Eastern
states, in terms of implementation of emission norms. The component-suppliers of an MUV
major based in Mumbai, covered in our field survey, had adapted their technologies to suit
Bharat-I norms, which were introduced in North-Eastern states in 1997. With the
implementation of Bharat-II norms in this region in 2005, they had adapted their technologies
accordingly. However, it was later found that fuel that is consistent with Bharath-II norms
was not available in sufficient quantity and hence Bharat-I was implemented again, instead of
Bharath-II. Consequently, some of the suppliers had to close down their operations partly or

23
fully. Hence the emission norms-related policies should be designed in such a way that the
manufacturers get sufficient time to adapt their processes and technologies. At the same time,
both domestic and foreign firms at all levels should be prepared for the latest international
norms.
Inter-State Differences in Policies
A major weakness in Indian policy framework is inter-state differences in policies, as our

field survey respondents reported. This section summarises the major industrial policy
initiatives in the leading auto producing states. In addition to these policy differences, there
are individual memoranda of understanding between the companies and state governments,
resulting in further specialised incentives for the companies.
Tax Policies
Maharashtra is the only state that levies octroi taxes, among the major autoproducing states in
India. Thus, firms in this state find it expensive to procure components from other states.
However, in an attempt to develop its backward districts, the Maharashtra Government is
providing few incentives to the industrial units that are set up in these districts. These
incentives include the exemption from the electricity duty for 10 years, stamp duty and
registration fees for 5 years. There is octroi refund to the industries in these places. The
Haryana Government provides exemption from sales tax and Local Area Development Tax
(LADT) for certain time period for the industries that are newly set up. Tamil Nadu offers
exemption from the electricity tax for three years to all the new projects with investment
between₹. 50 crores and₹. 100 crores. Uttarakhand provides many tax incentives, such as the
following:
o Exemption from central excise is given for 10 years of establishment.
o 100 per cent income tax exemption is given for the first five years of establishment,
followed by 30 per cent for the next five years.
o Exemption from entry tax on plant and machinery is granted.

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Subsidies
-The Maharashtra Government provides capital subsidy to the SSIs.
- The Haryana Government gives financial assistance to the SMEs for patent registration. It
also provides capital subsidy to the export oriented firms and interest-free loan to the Small
Scale Industries (SSIs).
-The Tamil Nadu Government provides the following subsidies:
o Capital subsidy of₹. 25 lakh to all the new projects with investment between₹. 50 crores
and₹. 100 crores. The amount of subsidy increases with the volume of investment.
o Reimbursement of patent registration fee up to 50 per cent of expenses or₹. 1 lakh,

whichever is lower, is done.
o Subsidy of 25 per cent or₹. 25 lakh, whichever is lower, is given for the setting up of
Effluent Treatment Plants (ETPs).
-The Uttarakhand government provides the following subsidies:
o Capital subsidy of 15 per cent with a maximum of₹. 30 lakh is provided.
o 3 per cent interest incentives with a maximum of₹. 2 lakh are given for the SSIs.
The Automotive industry in India is one of the largest in the world and one of the fastest
growing globally. India manufactures over 18 million vehicles (including 2 wheeled and 4
wheeled) and exports more than 2.3 million every year. It is the world's second largest
manufacturer of motorcycles; there are eight key players in the Indian markets that produced
13.8 million units in 2010-11. At present the dominant products of the automobile industry
are Two Wheelers with a market share of over 75% and passenger cars with a market share of
about 16%. Commercial vehicles and three wheelers share about 9% of the market between
them. The industry has attained a turnover of more than USD 35 billion and provides direct
and indirect employment to over 13 million people. The Indian two-wheeler industry has
come a long way since its humble beginning in 1948 when Bajaj Auto started importing and
selling Vespa Scooters in India. Since then, the customer preferences have changed in favour
of motorcycles and gearless scooters that score higher on technology, fuel economy and

25
aesthetic appeal, at the expense of metal-bodied geared scooters and mopeds. These changes
in customer preferences have had an impact on the fortunes of the players. The erstwhile
leaders have either perished or have significantly lost market share, whereas new leaders have
emerged. With an expanding market and entry of new players over the last few years, the
Indian two wheeler industry is now approaching a stage of maturity. Previously, there were
only a handful of two-wheeler models available in the country. Currently, India is the second
largest producer of two wheelers in the world. It stands next only to China and Japan in terms
of the number of two wheelers produced and the sales of two-wheelers respectively. There
are many two-wheeler manufacturers in India. The major players in the 2-wheeler industry
are Hero Honda, Bajaj Auto Ltd (Bajaj Auto), TVS Motor Company Ltd (TVS) and Honda
Motorcycle & Scooter India, Private Limited (HMSI) accounting for over 93% of the sale in
the domestic two wheeler market. It is noteworthy that motorbikes segment’s share is just
below 80% of the total 2W market in India which is dominated by Hero Honda with a market
share of 59%. Scooter segment’s market share is about 18% which is led by Honda
Motorcycle & Scooter India, Private Limited (HMSI) with a market share of 43%. Three
fourth of the total exports in the two wheeler automobile industry are made in the motorcycle
segment. Exports are made mainly to South East Asian and SAARC nations. The level of
technology changes in the Motor Vehicle Industry has been high but, the rate of change in
technology has been medium. Investment in the technology by the producers has been high.
However, further investment in new technologies will help the players to be more
competitive. Currently, India’s increasing per capita disposable income which is expected to
rise by 106% by 2015 and growth in exports is playing a major role in the rise and
competitiveness of the industry. Consumers are very important for the survival of the Motor
Vehicle manufacturing industry. In 2008-09, customer sentiment dropped, which burned on
the augmentation in demand of cars. The key to success in the industry is to improve labour
productivity, labour flexibility, and capital efficiency. Having quality manpower,
infrastructure improvements, and raw material availability also play a major role. Access to
latest and most efficient technology and techniques will bring competitive advantage to the
major players. Utilising manufacturing plants to optimum level and understanding
implications from the government policies are the essentials in the Automotive Industry of
India.
This report on ‘Analysing the State of Competition In Indian Two Wheeler Industry’ gives
insight of the industry encompassing its evolution in India, demand drivers, influence of

26
supply side factors, commentary on industry players and competition and the trends in
domestic sales and exports. The report also shows the oligopolistic nature of the Indian two
wheeler industry and the propensity of the major players to increase their share. In a rapidly
growing two wheeler industry, especially in developing economies like India, it is extremely
important to analyse the state of competition to check whether a few firms may increase their
dominance and also the implications of after sale services provided by the two wheeler firms
to consumers.
BS IV Standards
Bharat stage emission standards (BSES) are emission standards instituted by the Government
of India to regulate the output of air pollutants from internal combustion engines and Spark-
ignition engines equipment, including motor vehicles. The standards and the timeline for
implementation are set by the Central Pollution Control Board under the Ministry of
Environment & Forests and climate change.
The standards, based on European regulations were first introduced in 2000. Progressively
stringent norms have been rolled out since then. All new vehicles manufactured after the
implementation of the norms have to be compliant with the regulations. Since October 2010,
Bharat Stage (BS) III norms have been enforced across the country. In 13 major cities, Bharat
Stage IV emission norms have been in place since April 2010 and it has been enforced for
entire country since April 2017. In 2016, the Indian government announced that the country
would skip the BS-V norms altogether and adopt BS-VI norms by 2020.
On November 15, 2017 The Petroleum Ministry of India in consultation with Public Oil
Marketing Companies decided to bring forward the date of BS-VI grade auto fuels in NCT of
Delhi with effect from April 1, 2018 instead of April 1, 2020. In fact, Petroleum Ministry
OMCs were asked to examine the possibility of introduction of BS-VI auto fuels in the whole
of NCR area from April 1, 2019. This huge step was taken due the heavy problem of air
pollution faced by Delhi which became worse around this year. The decision was met with
disarray by the automobile companies as they had planned the development according to
roadmap for 2020.
The phasing out of 2-stroke engine for two wheelers, the cessation of production of Maruti
800 & introduction of electronic controls have been due to the regulations related to vehicular
emissions.

27
While the norms help in bringing down pollution levels, it invariably results in increased
vehicle cost due to the improved technology & higher fuel prices. However, this increase in
private cost is offset by savings in health costs for the public, as there is lesser amount of
disease causing particulate matter and pollution in the air. Exposure to air pollution can lead
to respiratory and cardiovascular diseases, which is estimated to be the cause for 6.2 lakh
early deaths in 2010, and the health cost of air pollution in India has been assessed at 3% of
its GDP.

28
CHAPTER II
COMPANY PROFILE

29

30
Bajaj Auto Ltd.
Introduction
Bajaj Auto Limited is a global two-wheeler and three-wheeler manufacturing company. Bajaj
Auto manufactures and sells motorcycles, scooters and auto rickshaws. Bajaj Auto is a part of
the Bajaj Group. In the 1940s, Jamnalal Bajaj founded the company in Rajasthan.
It is based in Pune, Mumbai, with plants in Chakan (Pune), Waluj (near Aurangabad)
and Pantnagar in Uttarakhand. The oldest plant at Akurdi (Pune) now houses the R&D centre
'Ahead'. Bajaj Auto is the world's sixth-largest manufacturer of motorcycles and the second
largest in India. It is the world's largest three-wheeler manufacturer.
History
Bajaj Auto came into existence on 29 November 1944 as M/s Bachraj Trading Corporation
Private Limited. It started off by selling imported two- and three-wheelers in India. In 1959, it
obtained a licence from the Government of India to manufacture two-wheelers and three-
wheelers and obtained Licence from Piaggio to manufacture Vespa Brand Scooters in India
and started making Vespa 150 scooters, it became a public limited company in 1960. In 1970,
it rolled out its 100,000th vehicle. In 1977, it sold 100,000 vehicles in a financial year. In
1985, it started producing at Waluj near Aurangabad. In 1986, it sold 500,000 vehicles in a
financial year.
In 1995, it rolled out its ten millionth vehicle and produced and sold one million vehicles in a
year.
With the launch of motorcycles in 1986, the company has changed its image from a scooter
manufacturer to a two-wheeler manufacturer.
In 2017 it was announced that Bajaj Auto and Triumph Motorcycles Ltd would form an
alliance to build mid-capacity motorcycles.
According to the authors of Globality: Competing with Everyone from Everywhere for
Everything, Bajaj has operations in 50 countries creating a line of bikes targeted to the
preferences of entry-level buyers.

31
Founders Profile
Jamnalal Bajaj (4 November 1889– 11 February 1942) was an Indian industrialist, a

philanthropist, and Indian independence fighter. He was also a close associate and follower
of Mahatma Gandhi. Gandhi is known to have adopted him as his son. He founded the Bajaj
Group of companies in 1926. The group now has 24 companies, including 6 listed
companies. Besides Bajaj Auto Ltd, the other major companies in the group include Mukand
Ltd, Bajaj Electricals Ltd and Bajaj Hindusthan Ltd. One of his grandsons, Rahul Bajaj, runs
the family flagship company, Bajaj Auto. Several institutions in India bears his name,
including the Jamnalal Bajaj Institute of Management Studies. A locality, JB Nagar, in the
sub-urban Andheri in Mumbai has been named after him. Jamnalal Bajaj Award was
established in 1978 by the Jamnalal Bajaj Foundation and are given away each year on his
birth anniversary.
Early years in 1898, when Jamnalal Bajaj was born into a poor Marwari family, as the third
son of Kaniram and Birdibai, in a village named Kashi Ka Bas, near Sikar, Rajasthan. He was
later adopted as a grandson by Seth Bachhraj and his wife Sadibai Bachhraj, a rich Rajasthani
merchant couple of Wardha. Seth Bachhraj was a distant relative on his father's side, and was
a well-known and respected trader in the British Raj.
Upon coming of age, under the guidance of Seth Bachhraj, Jamnalal got involved in the
family business of his grandfather. During this period, he acquired the skills of being a
tradesman—rigorous book keeping and buying and selling commodities—excelling in his
work by the time Seth Bachhraj died. In 1926 he founded what would become the Bajaj
group of industries.
Follower of Gandhi
Upon Mahatma Gandhi's return from South Africa, Jamnalal took in interest in Gandhi's way
of life, his principles, such as Ahinsa (non-violence), and his dedication to the poor. He could
understand Gandhi's vision that home-made goods were the answer to India's poverty. He
considered that some British companies were importing cheap, raw cotton from India and
sending back finished cloth. He was humbled by the simple life that Gandhi was leading at
the Sabarmati Ashram. He was impressed by the Ashram's routine of prayer and physical
work. He brought his wife Jankidevi and his children to live in the Ashram. However, 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.

32
Freedom Struggle
In 1920, Jamanalal was elected chairman of the reception committee for the Nagpur session
of the Indian National Congress. He gave up the title of Rai Bahadur conferred on him by the
British government and joined the non-co-operation movement in 1921. Later, in 1923, he
participated in the flag satyagraha, defying a ban on flying the national flag in Nagpur, and
was detained by British forces. This earned him national admiration.
He wanted Gandhi to move to Wardha and make it the center of his activities. After
the Dandi March in April 1930, Gandhi moved to Sevagram, a small village near Wardha,
since he wanted to live close to the rural populace. Gandhi vowed not to return to Sabarmati
Ashram until freedom was achieved.
Jamanalal was named the president of Gandhi Seva Sangha, a group of workers who
dedicated their time to constructive work. He was later elected a member of the Congress
Working Committee and as the treasurer of Congress in 1933.
Social Initiatives
Jamanalal Bajaj was interested in initiatives such as the removal of untouchability, promotion
of Hindi, and Khadi and village Industries. He had toured across the country promoting
Khadi. In 1925, he was chosen as the treasurer of the All India Spinners Association. He was
also the president of the All India Hindi Sahitya Sammelan (literary convention) that
promoted Hindi as the single language to unite all Indians. He was instrumental in
publishing Hindi magazines and books. He initiated the Gandhi Hindi Pustak Bhandar
(bookshop) in Bombay and started the Sasta Sahitya Mandal (publishing house).
He founded the Dakshin Bharat Hindi Prachar Sabha (university) along with C.
Rajagopalachari in hopes of spreading the learning of Hindi across the country.
With the intent of eradicating untouchability, he fought the non-admission

of Harijans into Hindu temples in his home town of Wardha. As orthodox Hindu priests
and Brahmins objected, he opened his own family temple, the Laxmi Narayan Mandir, in
Wardha, for the Harijans in 1928. He began a campaign by eating a meal with Harijans and
opening public wells to them. He opened several wells in his fields and gardens.
Due to his devotion, he was elected the chief of the Jaipur Rajya Praja Mandal in 1938. While
chief, he negotiated a truce between the maharajas of Sikar and Jaipur.

33
In honour of his social initiatives the Jamnalal Bajaj Award has been instituted by the Bajaj
Foundation. Past awardees include Nelson Mandela and Desmund Tutu.
Product Portfolio:
No. Name Product
1 Dominar 400
2 Pulsar
3 Avenger
4 V15
5 Discover
6 Platina

34
7 CT100
Structure
Rahul Bajaj
[Chairman]
Pradeep
Rajiv Bajaj Shrivatsava Abrabham Joseph
[Managing [Executive [Chief Technology
Director] OfXicer]
Director]
R C Maheshwari Rakesh Sharma

Kevin P D'SA Ravi Kyran Subhas Rao
[President [President
Commercial International [President [President Human [President Retail
Finance] Resource] Finance]
Vehicle Business] Business]
Market Presence:

35
In FY2017, Bajaj Auto sold over 2 million motorcycles in India, which was 5.4% higher than
in the previous year. This was driven by: a) The CT and the Platina in the entry or utility
segment. By creating a new value proposition for the Platina and through aggressive
marketing of the CT 100, the Company sold 836,304 units in FY2017, and earned a healthy
market share of 32%. b) The ‘V’ in the commuter segment. Through its creatively
differentiated offering, the V15 sold 203,262 units. In addition, the newly launched sibling in
this category — the V12 — has sold over 31,000 units. Bajaj Auto is confident that the V
family will occupy a white space where the traditional commuter segment ends (100 cc to
125 cc) and the sports / performance segment begins (150 cc and above); and, in doing so,
increase its market presence in the commuter category. c) The Pulsar and the Avenger in the
sports or performance segment. For the year, Bajaj Auto sold 734,590 units and continued to
reinforce its leadership position in this segment, with a market share of 45% versus 43% in
the previous year. d) The KTM, the Pulsar RS200 and the Dominar 400 in the niche super-
sports segment. KTM is India’s fastest growing sports motorcycle brand. Its sale of 34,970
units in FY2017 was 15% higher than the previous year. Together, KTMs, the Pulsar RS200
and the Dominar 400 sold 63,575 units.
Future Strategies
This is where cost-effective bikes in the 300-750 cc range can make their way into diverse
markets, albeit with greater commonality in customer preferences. The likes of Triumph and
KTM will obviously be keen to meet these requirements in order to grow their presence and
Bajaj will play a key role here as it has successfully done with KTM.
This, in turn, begs the question: Will a Harley also turn to Bajaj for a similar alliance to be
able to take on such challenges in emerging markets? For now, any partnership with Bajaj
may seem completely unrealistic but anything could happen with the rapidly changing global
bike market.
With KTM, Bajaj has clearly shown how a partnership can be steered successfully in the right
direction. What started as a modest 14 per cent stake a decade ago has since grown to 48 per
cent but, more importantly, set in place a strong roadmap for the future.
Back home, Bajaj will be keen on increasing its presence in a market where Honda has been
seeing the fastest growth thanks to its super successful Activa scooter. As a result, the 100-
110 cc commuter segment, which was largely dominated by motorcycles, is rapidly facing
the heat from scooters.

36
Bajaj has, of course, chosen to steer clear of this space and would rather focus on bikes where
the differentiator strategy is a key part of the plan. Although it does have models like the
CT100 and Platina in the entry commuter space in bikes, the Pulsar is still its flagship brand
and continues to be the market leader in the sports segments a good 15 years after it debuted.
The challenge now for Bajaj is to get some of its other brands to replicate this success story.

37
Financials
Mar 17 Mar 16 Mar 15 Mar 14 Mar 13
12 mths 12 mths 12 mths 12 mths 12 mths
EQUITIES AND
LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share
289.37 289.37 289.37 289.37 289.37
Capital
Total Share
289.37 289.37 289.37 289.37 289.37
Capital
Reserves and
17,567.20 12,756.05 10,805.95 9,877.89 7,775.93
Surplus
Total Reserves
17,567.20 12,756.05 10,805.95 9,877.89 7,775.93
and Surplus
Total
Shareholders 17,856.57 13,045.42 11,095.32 10,167.26 8,065.30
Funds
Minority Interest 0. 03 0.04 0.04 0.06 0.00
NON-CURRENT
LIABILITIES
Long Term
0.00 162.48 111.77 57.74 71.27
Borrowings
Deferred Tax
313.62 188.25 141.58 143.18 115.10
Liabilities [Net]
Other Long Term
176.43 29.78 57.59 87.43 122.06
Liabilities
Long Term
78.13 47.57 82.44 121.23 136.16
Provisions
Total Non-
568.18 428.08 393.38 409.58 444.59
Current

38
Liabilities
CURRENT LIABILITIES
Short Term
0.00 0.00 0.00 0.00 27.14
Borrowings
Trade Payables 2,235.98 2,027.11 1,799.82 2,111.81 1,981.89
Other Current
855.93 604.53 767.47 766.35 548.95
Liabilities
Short Term
120.93 321.45 1,909.57 1,852.70 1,607.86
Provisions
Total Current
3,212.84 2,953.09 4,476.86 4,730.86 4,165.84
Liabilities
Total Capital And
21,637.62 16,426.63 15,965.60 15,307.76 12,675.73
Liabilities
ASSETS
NON-CURRENT ASSETS
Tangible Assets 1,957.14 1,936.38 1,917.24 2,006.42 1,807.16
Intangible Assets 44.65 89.29 0.00 0.00 0.00
Capital Work-In-
10.64 26.89 101.72 32.55 223.29
Progress
Intangible Assets
Under 31.53 25.35 153.22 111.51 70.26
Development
Fixed Assets 2,043.96 2,077.91 2,172.18 2,150.48 2,100.71
Non-Current
9,426.96 8,444.94 3,184.69 6,158.07 3,347.59
Investments
Deferred Tax
0.00 0.00 0.00 0.00 33.41
Assets [Net]
Long Term Loans
29.74 682.24 511.07 720.55 463.16
And Advances
Other Non-Current 668.43 0.02 0.04 1.02 1.02

39
ASSETS
Total Non-
12,169.09 11,800.72 6,398.77 9,683.32 6,494.14
Current Assets
CURRENT ASSETS
Current
6,050.08 1,218.32 5,800.56 2,289.70 2,711.33
Investments
Inventories 728.38 719.07 814.15 641.21 643.96
Trade Receivables 953.29 717.93 716.96 796.21 734.33
Cash And Cash
301.36 867.03 592.74 500.90 566.51
Equivalents
Short Term Loans
75.76 871.60 1,295.30 979.35 1,313.14
And Advances
OtherCurrentAssets 1,359.66 231.96 347.12 417.07 212.32
Total Current
9,468.53 4,625.91 9,566.83 5,624.44 6,181.59
Assets
Total Assets 21,637.62 16,426.63 15,965.60 15,307.76 12,675.73
OTHER ADDITIONAL
INFORMATION
CONTINGENT
LIABILITIES,
COMMITMENTS
Contingent
0.00 1,980.12 1,594.74 1,170.58 1,252.99
Liabilities
BONUS DETAILS
Bonus Equity
258.85 258.85 258.85 258.85 258.85
Share Capital
NON-CURRENT
INVESTMENTS
Non-Current
Investments 0.00 8,444.94 3,184.69 6,158.07 3,347.59
Unquoted Book

40
Value
CURRENT INVESTMENTS
Current
Investments
0.00 1,218.32 5,800.56 2,289.70 2,711.33
Unquoted Book
Value
Profit & Loss Statement:
Standalone Profit & Loss account ------------------- in Rs. Cr. -------------------

INCOME
Revenue From Operations [Gross] 22,694.87 23,546.24 22,013.21 20,727.04 20,617.87
Less: Excise/Sevice Tax/Other Levies 1,321.35 1,293.46 909.28 1,009.40 1,128.91
Revenue From Operations [Net] 21,373.52 22,252.78 21,103.93 19,717.64 19,488.96
Other Operating Revenues 393.16 434.81 508.08 431.87 508.29
Total Operating Revenues 21,766.68 22,687.59 21,612.01 20,149.51 19,997.25
Other Income 1,221.97 913.27 582.42 706.41 795.49
Total Revenue 22,988.65 23,600.86 22,194.43 20,855.92 20,792.74
EXPENSES
Cost Of Materials Consumed 13,285.36 13,717.01 13,752.79 12,936.47 13,523.74
Purchase Of Stock-In Trade 1,382.47 1,276.40 1,154.57 959.10 858.83
Changes In Inventories Of FG,WIP And
-43.68 63.45 -57.56 -18.90 24.00
Stock-In Trade
Employee Benefit Expenses 997.07 918.44 897.30 726.58 639.48
Finance Costs 1.40 0.48 6.49 0.49 0.54
Depreciation And Amortisation Expenses 307.29 307.16 267.40 179.61 163.97
Other Expenses 1,745.38 1,949.76 1,808.41 1,505.42 1,378.80
Less: Amounts Transfer To Capital Accounts 22.27 17.02 60.05 64.90 62.85
Total Expenses 17,653.02 18,215.68 17,769.35 16,223.87 16,526.51
Profit/Loss Before Exceptional,

5,335.63 5,385.18 4,425.08 4,632.05 4,266.23
ExtraOrdinary Items And Tax
Exceptional Items 0.00 0.00 -340.29 0.00 0.00
Profit/Loss Before Tax 5,335.63 5,385.18 4,084.79 4,632.05 4,266.23
Tax Expenses-Continued Operations
Current Tax 1,455.92 1,686.10 1,258.00 1,362.02 1,156.00
Deferred Tax 50.41 46.67 13.05 28.08 66.66
Tax For Earlier Years 1.74 0.00 0.00 -1.37 0.00
Total Tax Expenses 1,508.07 1,732.77 1,271.05 1,388.73 1,222.66
Profit/Loss After Tax And Before
3,827.56 3,652.41 2,813.74 3,243.32 3,043.57
ExtraOrdinary Items

41
Profit/Loss From Continuing Operations 3,827.56 3,652.41 2,813.74 3,243.32 3,043.57

Profit/Loss For The Period 3,827.56 3,652.41 2,813.74 3,243.32 3,043.57
OTHER ADDITIONAL INFORMATION

EARNINGS PER SHARE
Basic EPS (Rs.) 132.30 126.20 97.00 112.00 105.20
Diluted EPS (Rs.) 132.30 126.20 97.00 112.00 105.20
VALUE OF IMPORTED AND INDIGENIOUS RAW
MATERIALS
Imported Raw Materials 0.00 562.42 588.04 550.61 628.53
Indigenous Raw Materials 0.00 13,154.59 13,164.75 12,385.86 12,895.22
STORES, SPARES AND LOOSE TOOLS
Imported Stores And Spares 0.00 24.37 18.26 16.72 11.73
Indigenous Stores And Spares 0.00 1,216.05 1,085.34 930.56 844.90
DIVIDEND AND DIVIDEND PERCENTAGE
Equity Share Dividend 144.68 1,591.52 1,446.84 1,446.84 1,302.15
Tax On Dividend 29.45 323.99 287.73 245.89 221.30
Equity Dividend Rate (%) 550.00 550.00 500.00 500.00 450.00
Awards & Recognition
• Bajaj Pulsar 135 LS received Bike of the Year 2010 award from BBC - TopGear and
Bike India.
• Pulsar 220 DTS-Fi received the Bike of the Year 2008 award by all major Indian
automobile magazines like Overdrive, AutoCar, Business Standard Motoring and Bike
Top Gear.
• In 2006, Bajaj Auto won the Frost & Sullivan Super Platinum Award for manufacturing
excellence in its Chakan Plant.
• It received award for The Most Customer Responsive Company in Automobiles category
in a survey conducted by Economic Times for the years 2004, 2006 and 2008.
• Bajaj Auto received the Bike Maker of the Year award in ICICI Bank Overdrive Awards
2004.
• Bajaj Pulsar 180 DTS-i won the BBC World Wheels Viewers Choice Two Wheeler of
the Year 2003 award.

42

43
TVS MOTORS
History
The company was born in 1911, thanks to the ambitious dreams of the founding father, T V
Sundaram Iyengar, who refused to settle managing smaller businesses like bus fleet
operations or vehicle servicing. He wanted to build a business that would create a family of
like-minded individuals pursuing only the best in quality and standards. And he made his
dreams a reality.
He began with Delhi’s first bus service in 1911 and founded T.V.Sundaram Iyengar and Sons
Limited, a company in the transportation business with a large fleet of trucks and buses under
the name of Southern Roadways Limited.[2] When he died in 1955, his sons took the
company ahead with several forays in the automobile sector, including finance, insurance,
and manufacturing of two-wheelers, tyres and other components. The group has managed to
run 97 companies that account for a combined turnover of nearly $6 billion.
Sundaram Clayton was founded in 1962 in collaboration with Clayton Dewandre Holdings,
United Kingdom. It manufactured brakes, exhausts, compressors and various other
automotive parts. The company set up a plant at Hosur in 1978, to manufacture mopeds as
part of their new division. In 1980, TVS 50, India's first two-seater moped rolled out of the
factory at Hosur in Tamil Nadu, Southern India. A technical collaboration with the Japanese
auto giant Suzuki Ltd. resulted in the joint venture between Sundaram Clayton Ltd and
Suzuki Motor Corporation, in 1982. Commercial production of motorcycles began in 1984.
Suzuki relationship
TVS and Suzuki shared a 19-year-long relationship that was aimed at technology transfer, to
enable design and manufacture of two-wheelers specifically for the Indian market. Re-
christened TVS-Suzuki, the company brought out several models such as the Suzuki Supra,
Suzuki Samurai, Suzuki Shogun and Suzuki Shaolin. In 2001, after separating ways with
Suzuki, the company was renamed TVS Motor, relinquishing its rights to use the Suzuki
name. There was also a 30-month moratorium period during which Suzuki promised not to
enter the Indian market with competing two-wheelers.
The success of the TVS group is rooted in their founder's personal belief system - a
commitment to the values of trust and customer service. Although the company is named

44
after the founder, the letters TVS have always stood for Trust, Value, and Service within the
company.
This remains the guiding, overarching philosophy by which the group functions. It was only
natural that success and market leadership followed. Today, the TVS Group is one of India's
leading suppliers of automotive components, with over 90 Companies under its umbrella and
revenue of around INR. 40,000 Cr in 2015-16. The first four companies in India to have won
the coveted Deming Prize are from the TVS Group.
Founder
T.V. Sundaram Iyengar was born in 1877 in Thirukkurungudi in the Tirunelveli

district of Madras Presidency, British India. Sundram Iyengar started his initial career as a
lawyer, as per his father's wishes, and then moved to work for the Indian railways and later in
a bank.
Sundram Iyengar later quit his jobs and laid the foundation for the motor transport industry in
South India when he first started a bus service in the city of Madurai in the year 1911.He
established the T.V. Sundram Iyengar and Sons Limited in 1911, which by his death in
1955, operated a number of buses and lorries under the title of Southern Roadways Limited.
This paved the way for the genesis of the TVS Group.
During the times of the Second World War, Madras Presidency was met with petrol scarcity,
to meet the demands; Sundram Iyengar designed and produced the TVS Gas Plant. He also
started a factory for rubber retreading, besides two more concerns, the Madras Auto Service
Ltd and the Sundaram Motors, a division of T V Sundram Iyengar & Sons Ltd., the former
was the largest distributor of General Motors in the 1950s. What began as a single man's
passion soon became the business of a family.
Sundram Iyengar had five sons and three daughters, and in his patriarchal Tamil Brahmin
family all male members got into the business. With his son, T.S. Duraisamy's early death,
four other sons— T.S. Rajam, T.S. Santhanam, T.S. Srinivasan and T.S. Krishna – became an
integral part of the business and ever since there have been four largely distinct branches that,
however, have worked under the TVS umbrella.
Apart from being a successful businessman, T V Sundram Iyengar was a patron of the arts.
He was praised by Rajaji, a senior statesmen and governor general of India at that time, for
his gesture of retiring and handing over the trade to his sons. He died in the early hours of 28

45
April 1955 at his residence in Kodaikanal at the age of 78 and at that his wife, four sons and
three daughters survived time. The Union Government of India honoured Sundram
Iyengar by unveiling busts in bronze and in marble in the city of Madurai, Tamil Nadu on 7
August 1956.
PRODUCT PROFILE
TVS Motor specializes in three types of products in the two-wheeler industry of the country.
Their product range includes products such as mopeds, scooters and motorcycles.
TVS Motor Product Range
SCOOTERS MOTORCYCLES MOPEDS
1 Ntorq Apache XL 100
2 Jupiter Victor XL 100 heavy duty
3 Wego Sport

46
4 Zest Star City Plus
5 Pep+
TVS CLIENT PROFILE
TVS Motors have a wide range of products in its portfolio. With nine different types of
products in its range and with over 40 variants in total, the company has created a very big
client base. TVS Motors caters to people in the low-income groups as well as people in the
upper middle class of the population. Products such as the XL 100 mopeds are suitable to the
low-income groups such as farmers or people in the rural areas of the country. The Apache
series of motorcycles caters to the speed enthusiasts of middle and upper middle class groups
of the country. The biggest sellers of the company are its scooters such as Pep+ and Wego
and the motorcycles Victor and Sport. The biggest buyers of scooters in the country are
people under the age 26. This includes working people who are usually recent graduates and
current students. Middle class working people usually purchase Victor motorcycles.

47
ORGANISATIONAL CHART
Name Age Since Current Position
K N Radhakrishnan President, Chief Executive Officer
K Desikan 53 2017 Chief Financial Officer
K. Srinivasan 2009 Compliance Officer, Company Secretary
Sudarshan Venu 25 2014 Joint Managing Director, Executive Director
Lakshmi Venu 2014 Director
H. Lakshmanan 82 2002 Non-Executive Non-Independent Director
Rajesh Narasimhan 2017 Non-Executive Non Independent Director
R. Ramakrishnan 69 2009 Non-Executive Non-Independent Director
Prince Asirvatham 64 2009 Independent Non-Executive Director
K. Bajpai 85 2003 Independent Non-Executive Director
C. Dua 64 2001 Independent Non-Executive Director
T. Kannan 61 2000 Independent Non-Executive Director
Hemant Singh 62 2013 Independent Non-Executive Director
MARKET POSITION
TVS Motor Company says it is in line with its target to achieve 18 per cent market share in
the Indian two-wheeler market in two years, despite the blip in sales in the third and fourth
quarters of this year from the demonetization effect. The firm hopes to close this financial
year with a 14.2 - 14.3 percent market share.
According to Radhakrishnan, the urban market has been reasonably doing well, except for
two months in November and December and growth picked up from January onwards. The

48
rural market was affected. “But, things are looking better now,” he said. As for the
company’s two-wheelers, the urban market accounts for 60 per cent of the sales, while the
rural contributes 40 per cent of the total sales.
“The Indian two-wheeler industry is likely to grow by 8-10 per cent next year (2017-18) and
we hope to grow faster than the industry. We have to grow better than the industry, in order
to achieve our target of 18 per cent market share in two years and we are confident of
achieving the same,” Radhakrishnan said. With projected better monsoon and a pick-up in the
rural economy, he hopes to clock better sales in 2017-18.
The company is keen to strengthen its portfolio with new launches and upgrades of existing
products to sustain customers’ interest and achieve higher sales. “We will launch one scooter
and one motorcycle in the year 2017-18,” he said, while not specifying whether those will be
upgrades of existing products or complete new products. “We have to keep launching new
products and upgrades to fill the gaps across price segments and also to sustain better sales,”
he pointed out.
For the year 2017-18, the company is lining up a capex of Rs 350 crore. “The investments
will go into new products and new technology, besides some capacity expansion for our own
version of the BMW motorcycle,” Radhakrishnan said. The company has already entered into
a manufacturing tie-up with BMW and as per which it will manufacture BMW motorcycles
(mostly below 500 cc engine capacity), which the latter will sell in the overseas market. TVS
too gets to launch its own version of a motorcycle (Akula) to be made on the BMW platform
and the same will be rolled out during 2017-18.
Meanwhile, the company had quickly geared itself up for the production of BS-IV vehicles, a
norm that becomes mandatory from April 1 this year. “As part of our plans to gear up for the
BS-IV norms, we have completely transitioned to the production of BS-IV vehicles from
February this year. There has been a nominal cost increase, ranging from Rs 500 to Rs 1,000,
based on models. After taxes, the on-road prices of various models could go up by 1.5-2 per
cent due to this transition,” he explained.
TVS Motor Company has strengthened its Number 2 position in the scooter market, helped
by record sales in recent months.
For the first time, TVS Motor clocked monthly scooter sales of more than lakh units; in fact,
it has done it for two straight months (August and September).

49
With robust sales in scooters, TVS Motor’s market share grew to 16.4 per cent in the scooter
market in Q2 of this fiscal from 12.9 per cent in Q2 of last year.
TVS Motor Company introduced its latest motorcycle from its stable TVS Victor in
Hyderabad and hinted at the company gaining market share in the next financial year by one
percentage point taking it to 15 per cent up from 14 per cent this year.
JS Srinivasan, Vice-President, Sales and Service, said that the country’s two-wheeler market,
which started off a bit sluggishly in the first half, has seen better momentum in the past few
months and is likely to be up by about two per cent, where TVS has a market share of 14 per
cent.
“We expect the two-wheeler market to grow by about five-six per cent next financial year.
With a couple of new models in the portfolio, including Victor and the to-be-rolled-out
Apache 200, we would be able to further consolidate our market share,” he explained.
Speaking on the sidelines of a press conference to launch the new bike, he explained that the
motorcycle market now generates volumes of about 14-lakh unit per month, registering a
growth of about two per cent. This is likely to go up by about 5-6 per cent next financial year.
TVS expects to close with total sales of 22 lakh this year in the domestic market.”
“TVS currently sells about 1.85 lakh units per month. This includes 55,000 motorcycles,
65,000 scooters and 60,000 mopeds per month. With the addition of two more models to the
portfolio, this number is expected to go up,” he said.
In the country’s motorcycle market, TVS has a market share of nine per cent and 15.5 per
cent in the scooter segment, and expects to consolidate both the segments next fiscal.
FUTURE
TVS Motor Company is planning to look at IT as a profit centre by providing IT and IT-
enabled services (ITeS) to external customers. TVS’ IT team, which comprises around 100
people, has over the years, developed domain competencies in niche areas like Just-in- Time
(JIT) management, Kanban (replenishment inventory based on ‘pull’ system) and Total
Productivity Management (TPM) and manufacturing execution systems. “Having developed
the competency for implementing IT projects in-house, we are looking at the possibility of
providing services for external business partners, particularly in areas where we have

50
developed core competence,” T. G. Dhandapani, Chief Information Officer, TVS Motor. The
in-house IT team has implemented projects at TVS’ Himachal Pradesh plant, its Indonesia
unit and at the company’s three-wheeler plant in Hosur. “We have six group companies and
once the IT projects at all our units are completed, we do not mind helping external
customers. Once the thirst of all our group companies has been fulfilled over the next one
year, then we will look at external assignments. IT for us has been a cost centre and we would
also like to look at it as a profit centre.”
Several companies have sought solutions for specific IT-related problems and have
approached the TVS IT team, which has been helping them and providing clarifications
purely on an informal basis. The company’s initiatives include digitizing new product
development based on market research and customer feedback.
TVS expects to outdo its past year’s performance. In keeping with its overall business plan,
the company expects to maintain cumulative growth in sales, leveraging its recently launched
products. New products to be introduced will trigger growth and improve profitability.
New Launches
Apache RTR, TVS Flame, New Motorcycle, New Scooter and Four Stroke Three-
Wheeler: In keeping with its plan for new launches during the current financial year, the
company, in June 2009, launched a larger capacity Apache Motorcycle in the premium
segment. The motorcycle's sporty, chiseled looks and unmatched performance-packed
superior engine technology make the bike a class leader in terms of acceleration,
performance, styling, ride handling and stability. TVS has also launched the 2009 model of
its Flame motorcycle under the brand name Flame SR125, which features an enhanced engine
and revamped graphics.
The new commuter motorcycle is loaded with a host of new and exciting features and is
being targeted at smart city commuters. Developed with AVL Austria, SR125s engine is
propelled by three valves, Controlled Combustion Variable Timing Intelligent (CC-VTi)
technology which ensures better pickup with optimum mileage and power.
The company would also be expanding its scooter platform to offer a large scooter and will
introduce an all-new motorcycle in the executive segment.

51
TVS Motor Company is planning to set up an arm that would exclusively finance its two-
wheeler customers. The new non-banking finance company (NBFC) is expected to
commence operations by the end of the current calendar year.
It may be noted that last year, the company had delisted its financing arm — TVS
Finance — from stock markets and said it will re-enter vehicle financing.
Venu Srinivasan, chairman and managing director, TVS Motor, said that the company had
approached the Reserve Bank of India (RBI) for approval that is expected to come in two
months and the operations would commence by the end of the current calendar year.
In a slowdown year, when the availability of retail finance, especially in small towns and
rural areas, is tight, an in-house retail finance arm would help, he said. He said the demand
for gear-less scooters and mopeds is closely linked to availability of finance.
Meanwhile, TVSM intends to set up an engine testing facility at its R&D centre in Hosur.
The company plans to launch two new vehicles — an automatic scooter and a motorcycle —
before the end of this calendar year. Last year, the company sold 6.44 lakh motorcycles, 4.38
lakh mopeds and 2.59 lakh scooters. It also sold 4,613 three-wheelers with two-stroke
engines. Sales have picked up and are averaging about 1,000 a month, Mr. Srinivasan said.
TVSM plans to invest Rs 450-500 crores this financial year, mostly on new products.
Despite the impact created by demonetization, the goods and services tax and higher emission
norms, TVS says it is confident of a double-digit operating earnings margin.
K N Radhakrishnan, chief executive, said till last October (the financial year starts in April),
the industry was growing at 12 per cent, while TVS' was 18.6 per cent. After which, industry
growth came down to 5.3 per cent, while TVS growth dropped to 11.3 per cent. He
expects TVS to increase its market share by 1.5 percentage points this year.
S G Murali, the company's finance head, said by the second half of the year, the plan was to
launch a new motorcycle and a scooter. For the festival season, there would be upgrades of
existing vehicles.
He added they would achieve a market share of around 18 per cent over the next two years,
and, a 10 per cent margin in earnings before interest, taxes, depreciation and amortization by
next year. The current market share is 14-14.5 per cent.

52
Radhakrishnan said there was a better product mix and average realization was growing. The
company is planning one more round of price increase, of perhaps half a percent, mainly to
offset the higher emission norm expense. The price increase will be Rs 500-1,000 a vehicle.
TVS also hopes its Indonesian subsidiary would break-even this year. The management has
told shareholders the annual loss of the subsidiary dropped to $3.1 million, from $6.4 million.
Sales improved to 26,000 units, from 17,000 units.
TVS Motors is planning to launch new hybrid and electric vehicles in the near future. The
hybrid vehicle will be launched by the end of 2017, while the electric vehicle is expected to
be launched by February or March 2018. TVS Motor Chairman Venu Srinivasan said that the
company has been working on an electric bike for over six years now." Last month, we
decided to slowly unwrap our electric push. The main obstacle for the electric vehicle has
been the life of the led acid battery. As lithium prices are becoming more and more
economically feasible, I think that is the only option we would like to consider," he said. The
cost of lithium batteries is quite high. However, it is quick to charge and the battery life is as
long as the life of the vehicle. Furthermore, the company is planning to come out with a
hybrid vehicle, which will run on both petrol and an electric battery, by December 2017. TVS
Motor would be using its own battery management system while buying individual cells from
international suppliers. The work on the battery, which includes connecting and making the
battery management system, will be done internally. The company's software capabilities can
help to achieve better efficiency in this. The company is also investing significantly in motor
design and if the volumes justify it, will invest in motor manufacturing as well, Srinivasan
said. The company will also look at exporting electric vehicles. Srinivasan said that by 2020,
around 20 per cent of the vehicles in the country would be electric.
Company milestones
• 1980 – Great milestone in Indian automobile industry. Country’s first 2-seater 50cc
Moped TVS 50 launched.
• 1984 – First mover. TVS becomes the first Indian Company to introduce 100cc Indo-
Japanese motorcycle
• 1994 – Pioneer of mobility for women. Launched India’s first indigenous scooterette
(sub 100cc variomatic scooters), TVS Scooty.

53
• 1996-1997 – Bringing in green technology before it became a norm. Introduced

India’s first catalytic converter enabled motorcycle, the 110cc Shotgun. Great drive.
Greater speed. Launched India’s first 5-speed motorcycle, the Shaolin.
• 2000 – Hiking speed limits. Launched TVS Fiero, India’s first 150cc,4-stroke
Motorcycle.
• 2001 – Indigenous technology. Launched TVS Victor, 4-stroke 110cc motorcycle,
India’s first indigenously designed and manufactured motorcycle.
• 2002 – TVS becomes the world’s first 2 wheeler company to win world’s most
prestigious recognition in TQM – the Deming award-2002. TVS wins Technology
award from Ministry of Science, Government of India for successful
commercialization of indigenous technology.
• 2004 – Setting benchmarks in mileage. Launched TVS Centra, a world-class 4-stroke
100cc motorcycle with the revolutionary VT-i engines for best in class mileage. All
terrain performance. Launched TVS Star, a 100cc motorcycle ideal for rough terrain.
TVS wins TPM excellence award from Japan Institute of Plant Maintenance (JIPM).
TVS wins outstanding Design Excellence award for TVS Scooty Pep.
• 2005-2006- Spreading its roots. TVS launches its Indonesian plant. Making a style
statement. Launched TVS Apache, which set the youth’s imagination on fire. It went
on to become the bike of the year for 2006, winning 6 prestigious awards.
• 2007 – TVS Motor Company rolls out 7 new models. TVS launches its Himachal
Pradesh plant at Nalagarh.
• 2008 – Apache refresh with rear disc brakes. TVS Motor Company bags two coveted
IT awards, Sep-2008 SAP ACE 2008 Awards and 2008 Symantec South Asia
Visionary award. Scooty Pep+ launched with balancing wheels. Scooty Wimbledon
collection launched. Apache RTR-FI launched in Jun-2008. Launches the
revolutionary 125cc Flame in Mar-2008. It makes its foray into three-wheeler market
with TVS King in March 2008
• 2009 – Launches TVS Apache RTR 180cc.

54
Achievements
TVS Motor won prestigious the Deming Application Prize in 2002.
In the same year, the work done for the TVS Victor motorcycle won TVS Motor the National
Award for successful commercialization of indigenous technology from the Technology
Development Board, Ministry of Science & Technology, Government of India. In 2004, TVS
Scooty Pep won the 'Outstanding Design Excellence Award' from BusinessWorld magazine
and the National Institute of Design, Ahmedabad.
The effective implementation of Total Productivity Maintenance practices won TVS Motor
the TPM Excellence Award given by the Japan Institute of Plant Maintenance in 2008.
TVS Motor has won several management awards, notable among them being the Emerging
Corporate Giant in the Private Sector awarded by The Economic Times and the Harvard
Business School Association of India. Business Today magazine awarded TVS Motor the
Best Managed Company and the Most Investor Friendly Company awards. Its advertising
practices won it the Good Advertising Award by Auto India Best Brand Awards, 2009.
The company's chairman, Venu Srinivasan, was conferred with an honorary Doctorate of
Science degree by The University of Warwick, United Kingdom in 2004, while the
Government of India honoured him with Padma Shri, one of India's highest civilian
distinctions in 2010.
Innovative implementation of Information Technology has won TVS Motor the Ace Award
for Most Innovative NetWeaver Implementation in 2007, awarded by technology major SAP
AG and the Team Tech 2007 Award of Excellence for Integrated use of Computer-aided
engineering Technologies.
Himalayan Highs, an initiative launched by TVS Motor Company has been included in the
India Book of Records when Anam Hashim became the first woman on a 110 cc scooter to
complete the trip to Khardung La, the world’s highest motorable stretch.

55
TVS MOTORS BALANCE SHEET
EQUITIES AND LIABILITIES
SHAREHOLDER'S FUNDS
Equity Share Capital 47.51 47.51 47.51 47.51 47.51
Total Share Capital 47.51 47.51 47.51 47.51 47.51
Reserves and Surplus 2,360.82 1,889.29 1,597.85 1,367.77 1,177.16
Total Reserves and Surplus 2,360.82 1,889.29 1,597.85 1,367.77 1,177.16
Total Shareholders Funds 2,408.33 1,936.80 1,645.36 1,415.28 1,224.67
NON-CURRENT LIABILITIES
Long Term Borrowings 468.76 494.23 518.98 442.41 494.14
Deferred Tax Liabilities [Net] 125.70 175.67 152.75 124.68 93.12
Long Term Provisions 50.80 39.99 43.73 53.17 53.17
Total Non-Current Liabilities 645.26 709.89 715.46 620.26 640.43
CURRENT LIABILITIES
Short Term Borrowings 616.38 264.23 399.76 33.47 51.72
Trade Payables 1,859.36 1,543.71 1,263.82 998.91 822.80
Other Current Liabilities 312.47 449.47 474.77 428.82 326.23

56
Short Term Provisions 62.87 58.47 105.03 67.96 53.42
Total Current Liabilities 2,851.08 2,315.88 2,243.38 1,529.16 1,254.17
Total Capital And Liabilities 5,904.67 4,962.57 4,604.20 3,564.70 3,119.27
ASSETS
NON-CURRENT ASSETS
Tangible Assets 1,930.64 1,545.93 1,294.93 1,105.94 1,006.85
Intangible Assets 53.23 46.92 34.70 19.77 4.63
Capital Work-In-Progress 62.28 30.96 89.36 48.08 36.09
Fixed Assets 2,046.15 1,623.81 1,418.99 1,173.79 1,047.57
Non-Current Investments 1,587.90 1,184.57 1,012.46 895.92 868.84
Long Term Loans And Advances 0.12 136.65 143.73 86.27 73.35
Other Non-Current Assets 83.61 0.00 0.00 0.00 0.00
Total Non-Current Assets 3,717.78 2,945.03 2,575.18 2,155.98 1,989.76
CURRENT ASSETS
Inventories 966.95 825.97 819.68 548.15 509.66
Trade Receivables 723.77 578.69 503.86 334.12 300.52
Cash And Cash Equivalents 8.51 32.84 5.39 82.57 17.45
Short Term Loans And Advances 0.00 521.91 632.78 364.31 178.44
OtherCurrentAssets 487.66 58.13 67.31 79.57 123.44
Total Current Assets 2,186.89 2,017.54 2,029.02 1,408.72 1,129.51

57
Total Assets 5,904.67 4,962.57 4,604.20 3,564.70 3,119.27
CONTINGENT LIABILITIES,
COMMITMENTS
Contingent Liabilities 622.69 741.42 750.59 607.29 395.07
CIF VALUE OF IMPORTS
Raw Materials 0.00 62.18 72.66 48.66 41.85
Stores, Spares And Loose Tools 0.00 1,093.07 1,006.67 686.44 499.21
Capital Goods 0.00 84.12 63.63 27.07 14.38
EXPENDITURE IN FOREIGN
EXCHANGE
Expenditure In Foreign Currency 1,952.76 182.26 158.82 155.78 104.12
REMITTANCES IN FOREIGN
CURRENCIES FOR DIVIDENDS
Dividend Remittance In Foreign Currency - - - - -
EARNINGS IN FOREIGN EXCHANGE
FOB Value Of Goods 2,026.96 2,492.13 2,254.84 1,716.18 1,155.85
Other Earnings - 56.76 61.25 50.26 29.99
BONUS DETAILS
Bonus Equity Share Capital 23.75 23.75 23.75 23.75 23.75

58
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted Market

71.53 38.85 38.54 20.21 10.11
Value
Non-Current Investments Unquoted Book

1,516.37 1,184.24 1,012.13 895.59 866.48
Value
CURRENT INVESTMENTS
Current Investments Quoted Market Value - - - - -
Current Investments Unquoted Book Value - - - - -

59
TVS PROFIT & LOSS STATEMENT
Consolidated Profit & Loss account ------------------- in Rs. Cr. -------------------
INCOME
Revenue From Operations [Gross] 13,446.28 12,424.01 10,895.11 9,003.18 8,009.53
Less: Excise/Sevice Tax/Other

1,111.27 1,048.86 768.18 733.92 708.28
Levies
Revenue From Operations [Net] 12,335.01 11,375.15 10,126.93 8,269.26 7,301.25
Other Operating Revenues 127.61 141.19 184.75 109.75 104.97
Total Operating Revenues 12,462.62 11,516.34 10,311.68 8,379.01 7,406.22
Other Income 165.44 38.54 23.66 26.66 24.17
Total Revenue 12,628.06 11,554.88 10,335.34 8,405.67 7,430.39
EXPENSES
Cost Of Materials Consumed 8,692.53 7,743.98 7,200.71 5,483.65 5,010.35
Purchase Of Stock-In Trade 292.70 266.13 226.90 402.80 243.02
Changes In Inventories Of FG,WIP

-48.77 62.77 -117.00 16.73 -9.47
And Stock-In Trade
Employee Benefit Expenses 828.05 743.53 658.89 541.02 473.88
Finance Costs 59.62 67.51 62.11 80.09 103.41

60
Depreciation And Amortisation

316.82 216.29 178.59 148.96 175.60
Expenses
Other Expenses 1,829.35 1,942.25 1,739.25 1,447.86 1,250.10
Total Expenses 11,970.30 11,042.46 9,949.45 8,121.11 7,246.89

657.76 512.42 385.89 284.56 183.50
Exceptional Items 0.00 0.00 58.27 17.95 92.78
Profit/Loss Before Tax 657.76 512.42 444.16 302.51 276.28
Current Tax 167.10 129.64 114.42 92.68 64.62
Less: MAT Credit Entitlement 0.00 12.46 23.66 4.93 0.00
Deferred Tax -18.43 24.59 26.91 51.65 26.74
Tax For Earlier Years 0.00 6.20 6.27 -19.19 0.00
Total Tax Expenses 148.67 147.97 123.94 120.21 91.36
Profit/Loss After Tax And Before

509.09 364.45 320.22 182.30 184.92
ExtraOrdinary Items
Extraordinary Items 0.00 0.00 0.00 4.58 13.43
Profit/Loss From Continuing

509.09 364.45 320.22 186.88 198.35
Operations
Profit/Loss For The Period 509.09 364.45 320.22 186.88 198.35
Minority Interest 1.95 0.00 0.00 -1.17 0.00
Share Of Profit/Loss Of Associates 0.20 4.88 8.04 0.59 0.00

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Consolidated Profit/Loss After MI

511.24 369.33 328.26 186.30 198.35
And Associates
EARNINGS PER SHARE
Basic EPS (Rs.) 11.00 8.00 7.00 4.00 4.00
Diluted EPS (Rs.) 11.00 8.00 7.00 4.00 4.00
DIVIDEND AND DIVIDEND

PERCENTAGE
Equity Share Dividend 118.78 126.86 97.20 69.40 59.91
Tax On Dividend 24.18 23.81 18.63 11.52 8.96

62

63
HERO MOTO CORP
History
Hero Motocorp is the World's single largest two–wheeler motorcycle company. Honda Motor
Company of Japan and the Hero Group entered a joint venture to setup Hero Honda Motors
Limited in 1984. The joint venture between India's Hero Group and Honda Motor Company,
Japan has not only created the world's single largest two wheeler company but also one of the
most successful joint ventures worldwide.
During the 80s, Hero Honda became the first company in India to prove that it was possible
to drive a vehicle without polluting the roads. The company introduced new generation
motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it
– Shut it – Forget it' campaign captured the imagination of commuters across India, and Hero
Honda sold millions of bikes purely on the commitment of increased mileage.
Over 20 million Hero Honda two wheelers tread Indian roads today. These are almost as
many as the number of people in Finland, Ireland and Sweden put together. Hero Honda has
consistently grown at double digits since inception; and today, every second motorcycle sold
in the country is a Hero Honda. Every 30 seconds, someone in India buys Hero Honda's top –
selling motorcycle – Splendor. This festive season, the company sold half a million two
wheelers in a single month—a feat unparalleled in global automotive history.
Hero Honda became the first company in the country to introduce four–stroke motorcycles
and set the standards for fuel efficiency, pollution control and quality. It has an excellent
distribution and service network spread throughout the country.
Hero Honda bikes currently roll out from its three globally benchmarked manufacturing
facilities. Two of these are based at Dharuhera and Gurgaon in Haryana and the third state of
the art manufacturing facility was inaugurated at Haridwar, Uttrakhand in April this year.
These plants together are capable of producing out 4.4 million units per year.
Having reached an unassailable pole position in the Indian two wheeler market, Hero Honda
is constantly working towards consolidating its position in the market place. The company
believes that changing demographic profile of India, increasing urbanization and the
empowerment of rural India will add millions of new families to the economic mainstream.
This would provide the growth ballast that would sustain Hero Honda in the years to come.
As Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly points out, 'We
pioneered India's motorcycle industry, and it's our responsibility now to take the industry to
the next level. We'll do all it takes to reach there.''

64
Termination of Honda joint venture
By December 2010, the board of directors of the Hero Honda Group had decided to terminate
the joint venture between Hero Group of India and Honda of Japan in a phased manner. The
Hero Group would buy out the 26% stake of the Honda in JV Hero Honda.[13] Under the joint
venture Hero Group could not export to international markets (except Nepal, Bangladesh and
Sri Lanka) and the termination would mean that Hero Group could now export. Since the
beginning, the Hero Group relied on their Japanese partner Honda for the technology in their
bikes.[14]
The Japanese auto maker will exit the joint venture through a series of offmarket transactions
by giving the Munjal family—which held a 26% stake in the company—an additional 26%.
Honda, which also has an independent fully owned two-wheeler subsidiary—Honda
Motorcycle and Scooter India (HMSI)—will exit Hero Honda at a discount and get over
₹6,400 crores for its stake. The discount will be between 30% and 50% to the current value of
Honda's stake as per the price of the stock after the market closed on December 16, 2010.
The rising differences between the two partners gradually emerged as an irritant. Differences
had been brewing for a few years before the split over a variety of issues, ranging from
Honda's reluctance to fully and freely share technology with Hero (despite a 10-year
technology tie-up that expires in 2014) as well as Indian partner's uneasiness over high
royalty payouts to the Japanese company. Another major irritant for Honda was the refusal of
Hero Honda (mainly managed by the Munjal family) to merge the company's spare parts
business with Honda's new fully owned subsidiary Honda Motorcycle and Scooter
India (HMSI).
As per the arrangement, it will be a four-leg deal. In the first part, the jhunjhunwala family,
led by Brijmohan Lal Munjal group, will form an overseas-incorporated special purpose
vehicle (SPV) to buy out Honda's entire stake, which will be backed by bridge loans. This
SPV would eventually be thrown open for private equity participation, and those in the fray
include Warburg Pincus, Kohlberg Kravis Roberts(KKR), TPG, Bain Capital, and Carlyle
Group.
Formation of Hero Motocorp
The name of the company was changed from Hero Honda Motors Limited to Hero Motocorp
Limited on 29 July 2011. The new brand identity and logo of Hero Motocorp were developed

65
by the British firm Wolff Olins. The logo was revealed on 9 August 2011 in London, to
coincide with the third test match between England and India.
Hero Motocorp can now export to Latin America, Africa and West Asia. Hero is free to use
any vendor for its components instead of just Honda-approved vendors.
On 21 April 2014, Hero Motocorp announced their plan on a ₹254 crores (US$40 million)
joint venture with Bangladesh's Nitol Niloy Group in the next five years. also hero updated
its 100cc engine range in 2014 for 100cc bikes except hero dawn.
49% stake in Erik Buell Racing
In July 2013, HMC acquired 49.2% shareholding in Erik Buell Racing, a motorcycle
sport company which produced street and racing motorcycles based in East Troy, Wisconsin,
United States. EBR filed for bankruptcy in 2015and Hero Motocorp proceed to acquire
certain assets for ₹18.2 crores (US$2.8 million).
Founders Profile
Early life
Munjal was born in 1923 at Kamalia, district Toba Tek Singh in unpartitioned Punjab, British
India. Kamalia is now in Pakistan. He was from a simple middle-class Arora/Khatri family.
After completing his formal education, he worked at the Army Ordnance Factory, before
moving his base to India after partition.
Hero Cycles
In 1954, Hero Cycles moved up the value chain by making a shift from supplying to
manufacturing handlebars, front forks and chains. In 1956, the Punjab Government issued
tender notices for twelve new industrial licenses to make bicycles in Ludhiana. Munjal and
his brothers participated in the bid and won the contract. Hero Cycles was registered as a
large-scale industrial unit. with capital partly financed by the Government of Punjab.
In 1961, Rockman Cycles Industries was established to manufacture bicycle chains and hubs.
Under Munjal's leadership, Hero Cycles was the first company to export bicycles on such a
large scale. In 1975, the company had become the largest bicycle manufacturer in India. By
1986, Hero Cycles entered the Guinness Book of Records as the largest manufacturers of
bicycles in the world.

66
Hero Honda
Before entering into a joint venture with the Honda Motors, Munjal started a Majestic Auto
and started manufacturing of the Hero Majestic Moped. To manufacture motor cycles in
1984, the Hero Group started a joint venture with Hero Honda and established a plant
at Dharuhera, Haryana. The Hero Group became so large that by 2002 it had sold 8.6 million
bicycles, and was producing 16,000 motorcycles a day.
Hero Motocorp
After the Hero Honda Motors joint venture broke up in August 2011, Hero's board of
directors agreed to pay royalties to Honda to continue to produce the Hero Honda until 2013,
due to the popularity and ubiquity of the Hero Honda brand in the Asia Pacific region as Hero
Honda Brand was trusted among the best in the Product reliability and customer satisfaction.
The separation gave an opportunity for Hero to expand its market globally with the name
Hero Motocorp. Previously, it had not been permitted for Hero Honda to sell their bikes
outside the Asia Pacific and in countries where Honda operated.
In the first week of August 2013, the company recorded a benchmark never before reached
by an Indian two-wheel vehicle industry manufacturer, by producing 50 million bikes.
Product range of the company includes:
Scooter Motorcycle
HF Dawn Karizma ZMR Xtreme Sports
HF Deluxe Eco HF Deluxe

67
Splendor Pro Splendor+ Splendor iSmart
Passion Pro Passion Pro 110 Passion X Pro
Super Splendor New Super Achiever 150

Splendor
Glamour Glamour FI New Glamour
Client Profile
Market Segmentation Hero Motocorp caters to a wide consumer base. It has segmented its
market based on income and age. It caters to youth of all income groups. Its highest selling
bike Splendor is a favorite in sub urban and rural India. It portrays itself as the most efficient
bike range to cater to Indian Roads. Target Market of Hero Motocorp follows selective
specialization. It has a wide range of bikes from Rs 37,000 to Rs 95, 000. Each product has
multiple optional features. The USP that it uses are: strong, sturdy and powerful, greater
mileage, low maintenance cost, safe to ride, ease and comfort. Its target market includes

68
lower middle class consumer to upper middle class consumer. It is affordable, available and
acceptable by all.
PROFILE OF DIRECTORS
DIRECTORS
MR. PAWAN MUNJAL MR. PRADEEP DINODIA
Chairman, Managing Director & CEO Non Executive & Independent Director
GEN. (RETD.)V. P. MALIK MR. SUMAN KANT MUNJAL
Non Executive & Independent Director
Non Executive Director
MR. PAUL EDGERLEY DR. ANAND C. BURMAN
Non Executive & Independent Director Non Executive & Independent Director
MR. M. DAMODARAN DR. PRITAM SINGH
Non Executive & Independent Director Non Executive & Independent Director
MR. RAVI NATH MS. SHOBANA KAMINENI

69
Non Executive & Independent Director Non-Executive and Independent Director
MR. VIKRAM KASBEKAR

Executive Director Operations (Plants)
LEADERSHIP TEAM
MR. NIRANJAN GUPTA MR. VIKRAM KASBEKAR
DR. MARKUS BRAUNSPERGER
MR. VIJAY SETHI
MR. ASHOK BHASIN MR. SANJAY JORAPUR
MR. NEERAJ MATHUR MR. SANJAY BHAN
Future Strategies- Foray into Motor Sports

MOTOR SPORTS ANOTHER DIMENSION OF BRAND PERSONALITY

70
They have made significant investments to enhance our R&D capabilities (CIT being one of
our crown jewels) and widen their global footprint across markets. Their products are known
for their robustness, reliability and quality. It is thus a natural progression for them to engage
in International Rally Sports - which tests the sturdiness of products and components. The
Hero MotoSports Team Rally was born in May 2016.
PARTNERING WITH THE BEST
Staying true to their vision of putting India on the motorsports map, they have partnered with
Speedbrain GmbH, the German off-road racing specialist. Speedbrain brings on board their
extensive experience as the Rally World Champion 2013 and the former factory team of
BMW, Husqvarna, Honda HRC and the technical expertise in making Rally bikes.
THEIR RIDERS
They have roped in India’s finest rider, C S Santosh and the experienced, Portuguese
Supercross and Motocross expert, Joaquim Rodrigues, popularly known as ‘JRod’, as their
Pilots.
C S SANTOSH is a household name in the arena of motorsports in India. He is now a three
time Dakar participant and the only Indian to finish the Dakar twice and the first ever Indian
to do so. He has won pretty much everything aboard a dirt bike in India for nine straight
years. CS has participated in nine international rallies and took his victories in the Baja India,
Raid-de-Himalaya, and the Desert Storm in his maiden attempts.
JOAQUIM RODRIGUES, from Portugal, is a top international professional racer who has
won titles and races in Motocross, Supercross and Enduro. He is a decorated racer with over
15 years of professional racing experience. He is a Rally Rookie and did his first rally ever
with Hero MotoSports Team Rally at Merzouga.
With Speedbrain at the helm, and our two pilots leading the charge, we are confident of
having the right combination required to make an impact at the world rally stage.

71
Consolidated Balance Sheet ------------------- in Rs. Cr. -------------------

Mar 17 Mar 16 Mar 15 Mar 14
12 mths 12 mths 12 mths 12 mths
EQUITIES AND LIABILITIES

SHAREHOLDER'S FUNDS
Equity Share Capital 39.94 39.94 39.94 39.94
Preference Share Capital 0.00 0.00 0.00 0.00
Total Share Capital 39.94 39.94 39.94 39.94
Revaluation Reserves 0.00 0.00 0.00 0.00
Reserves and Surplus 10,275.57 7,912.74 6,500.06 5,582.70
Total Reserves and Surplus 10,275.57 7,912.74 6,500.06 5,582.70
Money Received Against Share
0.00 0.00 0.00 0.00
Warrants
Employees Stock Options 0.00 0.00 0.00 0.00
Total Shareholders Funds 10,315.51 7,952.68 6,540.00 5,622.64
Preference Shares Issued By
0.00 0.00 0.00 0.00
Subsidiary Companies
Equity Share Application Money 0.00 0.00 0.00 0.00
Preference Share Application
0.00 0.00 0.00 0.00
Money
Share Capital Suspense 0.00 0.00 0.00 0.00
Hybrid/Debt/Other Securities 0.00 0.00 0.00 0.00
Statutory Consumer Reserves 0.00 0.00 0.00 0.00
Special Appropriation Towards
0.00 0.00 0.00 0.00
Project Cost
Service Line Contribution From
0.00 0.00 0.00 0.00
Consumers
Government/Other Grants 0.00 0.00 0.00 0.00
Minority Interest 67.38 53.62 18.54 0.85

72
Policy Holders Funds 0.00 0.00 0.00 0.00

Group Share In Joint Ventures 0.00 0.00 0.00 0.00
NON-CURRENT LIABILITIES
Long Term Borrowings 207.90 145.98 12.00 0.00
Deferred Tax Liabilities [Net] 468.90 227.79 0.00 0.00
Other Long Term Liabilities 0.00 34.89 31.33 24.45
Long Term Provisions 75.62 84.64 66.25 50.02
Total Non-Current Liabilities 752.42 493.30 109.58 74.47
Foreign Currency Monetary Item
0.00 0.00 0.00 0.00
Translation Difference A/C
CURRENT LIABILITIES
Short Term Borrowings 40.08 84.06 88.00 0.00
Trade Payables 3,266.20 2,791.70 2,854.93 2,291.01
Other Current Liabilities 827.84 497.45 308.90 588.19
Short Term Provisions 42.57 798.89 734.40 1,544.42
Total Current Liabilities 4,176.69 4,172.10 3,986.23 4,423.62
Total Capital And Liabilities 15,312.00 12,671.70 10,654.35 10,121.58
ASSETS
NON-CURRENT ASSETS
Tangible Assets 4,495.03 3,907.02 2,850.86 1,897.37
Intangible Assets 103.82 129.07 101.42 349.92
Capital Work-In-Progress 386.50 330.78 719.20 854.74
Intangible Assets Under
194.46 322.59 0.00 0.00
Development
Other Assets 0.00 0.00 0.00 0.00
Cnstruction Stores 0.00 0.00 0.00 0.00
Mining Development
0.00 0.00 0.00 0.00
Expenditure
Assets Held For Sale 0.00 0.00 0.00 0.00

73
Fixed Assets 5,179.81 4,689.46 3,671.48 3,102.03

Non-Current Investments 1,522.31 945.26 821.15 830.05
Deferred Tax Assets [Net] 0.00 0.00 73.54 105.98
Long Term Loans And Advances 23.13 876.39 648.27 477.43
Other Non-Current Assets 1,016.24 73.68 60.19 47.81
Total Non-Current Assets 7,741.49 6,584.79 5,274.63 4,563.30
Foreign Currency Monetary Item
0.00 0.00 0.00 0.00
Translation Difference A/C
CURRENT ASSETS
Current Investments 4,544.06 3,249.15 2,297.35 3,275.89
Inventories 708.58 761.99 861.39 669.55
Trade Receivables 1,551.75 1,282.08 1,371.82 920.58
Cash And Cash Equivalents 195.39 179.09 215.78 119.83
Short Term Loans And Advances 21.73 535.12 573.41 550.38
OtherCurrentAssets 549.00 79.48 59.97 22.05
Total Current Assets 7,570.51 6,086.91 5,379.72 5,558.28
Total Assets 15,312.00 12,671.70 10,654.35 10,121.58
CONTINGENT LIABILITIES,
COMMITMENTS
Contingent Liabilities 514.39 694.50 826.22 487.63
Other Earnings 0.00 0.00 0.00 0.00
BONUS DETAILS
Bonus Equity Share Capital 23.96 23.96 23.96 23.96
NON-CURRENT INVESTMENTS
Non-Current Investments Quoted
288.11 486.06 615.33 653.22
Market Value

74
Non-Current Investments
1,397.79 674.63 437.41 256.06
Unquoted Book Value
CURRENT INVESTMENTS
Current Investments Quoted
123.08 303.23 346.01 986.31
Market Value
Current Investments Unquoted
4,423.01 2,989.36 1,991.35 2,351.11
Book Value
Hero Motocorp
Consolidated Profit & Loss
------------------- in Rs. Cr. -------------------
account
Mar 17 Mar 16 Mar 15 Mar 14
12 mths 12 mths 12 mths 12 mths
INCOME
Revenue From Operations
30,654.63 30,633.72 29,188.38 27,126.21
[Gross]
Less: Excise/Sevice Tax/Other
2,373.23 2,258.21 1,717.65 1,880.35
Levies
Revenue From Operations
28,281.40 28,375.51 27,470.73 25,245.86
[Net]
Other Operating Revenues 303.56 238.22 67.30 29.61
Total Operating Revenues 28,584.96 28,613.73 27,538.03 25,275.47
Other Income 521.95 389.08 492.11 444.19
Total Revenue 29,106.91 29,002.81 28,030.14 25,719.66
EXPENSES
Cost Of Materials Consumed 18,993.87 19,357.95 19,790.40 18,221.53
Purchase Of Stock-In Trade 0.00 0.00 0.00 0.00

75
Purchase of Crude Oil And

0.00 0.00 0.00 0.00
Others
Cost of Power Purchased 0.00 0.00 0.00 0.00
Cost Of Fuel 0.00 0.00 0.00 0.00
Aircraft Fuel Expenses 0.00 0.00 0.00 0.00
Aircraft Lease Rentals 0.00 0.00 0.00 0.00
Operating And Direct Expenses 0.00 0.00 0.00 0.00
Changes In Inventories Of
96.74 -44.80 -75.10 8.36
FG,WIP And Stock-In Trade
Employee Benefit Expenses 1,432.49 1,343.06 1,178.72 930.35
Finance Costs 27.28 11.87 11.70 11.82
Provsions and Contingencies 0.00 0.00 0.00 0.00
Depreciation And Amortisation
502.25 447.01 540.45 1,107.37
Expenses
Miscellaneous Expenses Written
0.00 0.00 0.00 0.00
Off
Other Expenses 3,485.89 3,575.27 3,147.28 2,576.13
Less: Inter Unit / Segment /
0.00 0.00 0.00 0.00
Division Transfer
Less: Transfer to / From
Investment / Fixed Assets / 0.00 0.00 0.00 0.00
Others
Less: Amounts Transfer To
0.00 0.00 0.00 0.00
Capital Accounts
Less: Share of Loss From
0.00 0.00 0.00 0.00
Partnership Firm
Total Expenses 24,538.52 24,690.36 24,593.45 22,855.56
4,568.39 4,312.45 3,436.69 2,864.10

76
Exceptional Items 0.00 0.00 -144.73 0.00

Profit/Loss Before Tax 4,568.39 4,312.45 3,291.96 2,864.10
Current Tax 1,082.24 960.91 899.18 828.21
Less: MAT Credit Entitlement 0.00 0.00 0.00 -168.35
Deferred Tax 256.86 301.33 44.27 -238.39
Other Direct Taxes 0.00 0.00 0.00 0.00
Tax For Earlier Years 0.00 0.00 0.00 0.00
Total Tax Expenses 1,339.10 1,262.24 943.45 758.17
Profit/Loss After Tax And
3,229.29 3,050.21 2,348.51 2,105.93
Before ExtraOrdinary Items
Prior Period Items 0.00 0.00 0.00 0.00
Extraordinary Items 0.00 0.00 0.00 0.00
Profit/Loss From Continuing
3,229.29 3,050.21 2,348.51 2,105.93
Operations
Profit Loss From Discontinuing
0.00 0.00 0.00 0.00
Operations
Total Tax Expenses
0.00 0.00 0.00 0.00
Discontinuing Operations
Net Profit Loss From
0.00 0.00 0.00 0.00
Discontinuing Operations
Profit/Loss For The Period 3,229.29 3,050.21 2,348.51 2,105.93
Share Of Profit/Loss Of
317.01 39.46 15.15 -3.62
Associates
Consolidated Profit/Loss After
3,584.27 3,093.78 2,364.70 2,102.66
MI And Associates
EARNINGS PER SHARE
Basic EPS (Rs.) 179.00 155.00 118.00 105.00

77
Diluted EPS (Rs.) 179.00 155.00 118.00 105.00

Imported Raw Materials 0.00 0.00 0.00 0.00
Indigenous Raw Materials 0.00 0.00 0.00 0.00
Imported Stores And Spares 0.00 0.00 0.00 0.00
Indigenous Stores And Spares 0.00 0.00 0.00 0.00
DIVIDEND AND DIVIDEND
PERCENTAGE
Equity Share Dividend 1,737.34 1,437.75 1,198.12 1,299.13
Preference Share Dividend 0.00 0.00 0.00 0.00
Tax On Dividend 353.69 292.69 223.76 220.79
Achievements/ recognition
2013
• Green Pioneer Award – 2013
• Business Leader of the Year' Award by Hon'ble President of India, Shri. Pranab
Mukherjee, at the AlMA Managing India Awards 2013 on April 11, 2013 (Conferred on
Mr. Pawan Munjal)
• Business Leader of the Year' Award in the Auto (Two Wheelers) category by Deputy
Chairman of the Planning Commission Mr. Montek Singh Ahluwalia, at the NDTV
Business Leadership Awards 2013 (Conferred on Mr. Pawan Munjal)
• CFO of the year Award (Conferred on Mr. Ravi Sud)
2012
• Business Leader in Automobiles (two–wheelers) at the NDTV Profit Business Leadership
Awards 2012 (Conferred upon Mr. Pawan Munjal)
• Best value for Money Bike Maker and Best Advertising in Two Wheelers Category at the
Auto India Best Brand Awards 2012
• Digital Advertiser of the year at the Indian Digital Media Awards (IDMA) 2012
• Three awards (Launch Event of the year, Rural Engagement Progamme and Live Patron
Award for Marketing Excellence) at the WOW Awards organised by
EventFAQsAdvertiser of the year 2012 by Indian Digital Media Awards 2012
• Innovation in Loyalty Marketing Award (Initiative: Hero GoodLife Utsav) by Colloquy
Loyalty Awards

78
• TPM Excellence Award 2012 by JIPM (Japan Institute of Plant Maintenance)

2011
• Two–wheeler Manufacturer of the Year award by Bike India magazine
• Adjudged the 'Bike Manufacturer of the Year' at the Economic Times ZigWheels Car and
Bike Awards
2010
• Rated as Top Indian Company in Automobile – Two Wheelers sector by Dun & Bradstreet
– Rolta Corporate Awards 2009
• Most Preferred Brand of Two–Wheelers' award at the CNBC Awaaz Consumer Awards.
• Adjudged at top of the two–wheeler category in the Brand Equity Most Trusted Brands
2010 Survey
• Ranked No. 3 Most Trusted Brand across categories amongst Young Adult Males
• Company of the Year awarded by Economic Times Awards for Corporate Excellence
2008–09
• CNBC TV18 Overdrive Awards 2010 'Hall of Fame' to Splendor
• NDTV Profit Car & Bike Awards 2010 – Two–wheeler Manufacturer of the Year, CnB
Viewers' Choice Two–wheeler of the Year (Karizma ZMR) and Bike Maker of the Year by
ET–ZigWheels Car & Bike of the Year Awards 2009'
2009
• 'Two–wheeler Manufacturer of the Year' by NDTV Profit Car & Bike Awards 2009 and
Passion Pro adjudged as CNB Viewers' Choice two–wheeler
• Top Indian Company under the 'Automobile – Two–wheelers' sector by the Dun &
Bradstreet–Rolta Corporate Awards
• Won Gold in the Reader's Digest Trusted Brand 2009 in the 'Motorcycles' category
• NDTV Profit Business Leadership Awards 2009 – two–wheeler category
2008
• NDTV Profit Business Leadership Award 2008
• TopGear Design Awards 2008
• NDTV Profit Car India & Bike India Awards
• IndiaTimes Mindscape and Savile Row ( A Forbes Group Venture ) Loyalty Awards
• Asian Retail Congress Award for Retail Excellence (Strategies and Solutions of business
innovation and transformation)
• NDTV Profit Car India & Bike India Awards
• Overdrive Magazine

79
• TNS Voice of the Customer Awards

2007
The NDTV Profit Car India & Bike India Awards 2007
2006
• Corporate Social Responsibility Award
• Top Indian company in the Automobile – Two Wheeler sector by Dun & Bradstreet –
American Express Corporate Awards 2006
• Hero Honda Splendor rated as India's most preferred two–wheeler brand at the Awaaz
Consumer Awards 2006
• NDTV Profit Car India & Bike India Awards 2006
2005
• Awaaz Consumer Awards 2005 Bike Maker of the Year Award by Overdrive Magazine
2004
• Winner of the Review 200 – Asia's Leading Companies Award (3rd Rank amongst the top
10 Indian companies)
• ICSI National Award for Excellence in Corporate Governance 2004 by The Institute of
Company Secretaries of India.
2003
• Winner of the Review 200
• Most Respected Company in Automobile Sector by Business World
• Bike Maker of the Year by Overdrive Magazine.
2002
• Bike Maker of the Year by Overdrive Magazine
• Winner of the Review 200 Company of the Year of ET Awards for Corporate Excellence.
2001
• Bike Maker of the Year by Overdrive Magazine
• Winner of Three Leaves Award for showing Corporate Environment Responsibility in the
Automobile Sector by Centre for Science & Environment
• Business School Award for Corporate Performance to Hero Honda Motors Ltd.

80
CHAPTER III
RESEARCH METHODOLOGY

81
3.1 RESEARCH OBJECTIVES

• A profound knowledge or understanding would provide a clue as to preferences of one
brand over the other, the motive behind brand loyalty and how brand awareness is built.
• To understand the marketing strategies adopted by the company.
• To understand the market position of the company.
• To know about the awareness of the products in the market.
• To understand the marketing mix of the company.
3.2 RESEARCH DESIGN
The research design was prepared with great care keeping in mind the research objective. The
project was divided into 3 parts—parts ‘A’ for Bajaj Auto Ltd, part ‘B’ for TVS motors, and
part ‘C’ for Hero Motor Corp. Major parts of research were completed through secondary
sources of
information.
3.3 DATA COLLECTION
• Secondary data was chosen to collect the data that was used in analyzing the research
study.
• Secondary data was gathered through Journals, articles, internet and other published
materials.
3.4 RESEARCH APPROACH
In the part ‘A’ the research was conducted by visiting numerous websites which contained
information regarding Bajaj Auto Ltd, these websites included the official website of Bajaj
Auto Ltd as well as news articles from reputed websites like economic times, data regarding
Bajaj Auto Ltd was also collected
from official website of Bajaj Auto Ltd and Economic Times.
In the part ‘B’ the research was conducted by visiting various websites having information
about
TVS motors the sources included various news article, official website of TVS motors and
data from TVS motors annual report
In the part ‘C’ the research was conducted by visiting various websites having information
about
Hero Motor Corp, the sources included various news article, official website of Hero Motor
Corp and data pertaining to Hero Motor Corp from various research articles.
3.5 RESEARCH INSTRUMENTS

82
The secondary data is collected through the Internet , Material provided by company,
Government
organization websites , annual reports etc.
3.6 LIMITATIONS OF RESEARCH
• The data may not be completely accurate as the sample size was small and does not
represent
the entire universe.
• Unable to obtain company certificate due to time constraint.

83
CHAPTER IV
COMPARITIVE ANALYSIS

84
SWOT Analysis
Bajaj Auto Ltd
SWOT ANALYSIS OF BAJAJ AUTO.
STRENGHTS WEAKENSES
• High economies of scale. • Hasn't employed the excess cash for

long.
• High economies of scope.
• Centralized paternalistic management
• Legacy of brand name.
style. Not a global player in spite of
• Widespread distribution network. huge volumes.
• No collaboration with any of the

foreign players.
OPPORTUNITIES THREATS
• The growing gearless trendy scooters • The competition catches-up any new
and scooterette market. innovation in no time.
• Threat of cheap imported motorcycles

• Can use the existing R&D
from China.
capabilities for new models.
• Tough competition faced by foreign
• Can invest and grow the life style as well as domestic players.
segments.

85
TVS Motor Ltd
Strengths in the SWOT Analysis of TVS:
Multiple brands across portfolio: TVS offers mopeds, motorcycles, scooters and three wheelers and
has popular brands amongst all the categories. For example, motorcycles include popular brands like
Apache RTR and Star City etc. whereas scooters include TVS Jupiter and Scooty pep+ etc.
Strong financial performance: TVS has experienced strong financial performance in recent years. It
recorded growth in revenues (12.3%) and operating margin (4.8%) in FY2016. Thus, the company has
improved its financial conditions, which enhance shareholder’s value, and supports growth plans.
Strong R&D capabilities: TVS has set up a strong research and development department which allows
constant innovation in its product design and include newer technologies in its products. This provides
a competitive advantage to TVS.
Weaknesses in the SWOT Analysis of TVS:
Lack of Scale: Although TVS has experienced the increase in revenues in the recent past; it still
doesn’t stand tall when compared to large companies like Bajaj Auto and hero MotoCorp. These
companies have the capital advantage over TVS.
Overdependence on domestic market: India is TVS motor’s primary market contributing over 75
percent of its revenues. TVS has limited geographical diversity and hence is over dependent on the
Indian market. Any vulnerability in the Indian market will affect the company’s finances.
Opportunities in the SWOT Analysis of TVS:
Growing Indian 2-Wheeler market: India has witnessed rapid growth in the 2-wheeler market which is
expected to continue in the near future. India is the second fastest growing market in the two-wheeler
industry. This presents an opportunity for TVS to encapsulate the demand created.
Growth in three wheeler market: The three wheeler passenger as well as load carrier market is
growing in India. The three wheeler industry has grown with a CAGR of 4.4% from the period 2005-
2015. This also creates and opportunity for TVS.
Optimistic outlook for global motorcycle industry: TVS must look forward to expanding operations
globally in order to tap the positive outlook for the global motorcycle industry which is expected to
grow at a CAGR of 6.3% till 2019.

86
Threats in the SWOT Analysis of TVS:
Intense competition: The Indian two-wheeler industry is highly competitive with the presence of
various multinational and national brands such as Yamaha, Bajaj Auto, Honda and hero MotoCorp
etc. TVS being subjected to such competition has to constantly innovate in order grow in such intense
competitive atmosphere.
Environmental regulations: The Company is subjected to various stringent environmental regulations

that are constantly upgraded and hence the compliance costs increase.
Improvement in public transport: The public transportation facilities in India are improving which is a
threat to the passenger vehicle industry as a whole.
STRENGTHS WEAKNESSES
• Huge brand equity and one of the biggest • Absence in the premium bike
players in the two wheelers Indian segment
market • Lack of Scale
• Excellent R&D, and wide variety of

products in every segment
• Excellent distribution and good number
of service centers
• TVS Group has over 40,000 employees
and a customer reach of over 15 million
• Associating itself with celebrity brand
ambassadors
• ‘Scooty’ as a brand has become a second
name for the scooterrate segment
OPPORTUNITIES THREATS
• Two-wheeler segment is one of the most • Strong competition from Indian as
growing industries well as international brands
• Export of bikes is limited i.e. untapped
international markets • Dependence on government
policies and rising fuel prices

87
• Better public transport will affect

two-wheeler sales

88
Hero MotoCorp
Hero Moto Corp SWOT Analysis
1. Hero Moto Corp has huge brand equity and one of the biggest
players in the two wheelers Indian market
2. Excellent R&D of Hero Moto Corp, and wide variety of
products in every segment.
3. Excellent distribution, over 3000 dealerships and service
centers
4. Good advertising and excellent branding & marketing of Hero
Moto Corp
5. More than 5000 people are employed with the organization
6. Sponsorship of many events related to sports & racing has
made Hero Moto Corp a strong brand
7. The brand has received several awards & recognition for its
work in the industry
8. Ad campaigns through TV, billboards, online media etc boost
Strengths the brand image
1. Intense competition from Indian and international players

means limited market share growth of Hero Moto Corp
2. Most of the products have similar features and low on design
Weaknesses and innovation
1. Two-wheeler segment is one of the most growing industries

2. Export of Hero Moto Corp bikes is limited i.e. untapped
international markets
Opportunities 3. Introduction of bikes in the premium segment
1. Strong competition from Indian as well as international

brands
2. Dependence on government policies and rising fuel prices can
affect business margins for Hero Moto Corp
Threats 3. Better public transport will affect two-wheeler sales

89
McKinsey’s 7s Framework
Bajaj Auto Ltd
Strategy
1. 1985 onwards Scooter market has declined and Motorcycle market share increased
annually by 25%
2. Scooter segment has been a shift away from traditional metal bodied models to the sleeker
scooterettes.
3. Consumer is now 18-25 years (shift from older age who prefers metal body scooter)
4. R & D began exploring new models and Pulsar get ready for market in 2000.
5. Emission norms changed for Two Wheeler segment in April 2000 leaving two options : 1.
catalytic converters 2. Produce four-stroke scooters.
6. Sales Tax increased for Scooter and catalyst convertor costing INR 1000 hits scooter
proﬁtability due to #5.
7. Diversify into Wind Energy and other areas.
8. ‘Distinctly Ahead’ strategy in 2006-2007 means every offering to the customer should be
distinctly ahead of the competition.
Structure
1. R & D Expense increased from INR 236 million to 316.2 million accounting 1.10 % of
total sales to compete in post liberation era.
2. In April 2005, Rahul Bajaj hands over Managing Director post to Rajiv Bajaj.
3. Motor Cycle segment divided into Entry level, value level and premium level.
4. R&D had unveiled a path-breaking technology called DTSi (Digital Twin Spar Ignition) in
2003-2004.
5. The demerger of Bajaj Auto Ltd - Bajaj Finserv Ltd (BFL) Bajaj Auto Ltd (BAL) Bajaj
Holdings and Investment Ltd (BHIL) in May 26, 2008 Bajaj Finserv Ltd (BFL), Bajaj Auto
Ltd (BAL), and Bajaj Holdings and Investment Ltd (BHIL)—was completed with the shares
listing on May 26, 2008.
6. Leader in Sports segment with 31% market share out of overall 35% Sports segment in
two-wheeler.
System
1. Cost Management by value engineering through better design,

90
° planning the right mix between in-house
° manufacturing and bought-out parts, and
° cutting ﬁxed costs in the plants.
2. Vendor rationalization from 1400 to zoo
3. Production Capabilities increased across plants.
4. Total Productive Maintenance (Increased Equipment effectiveness from 67 to 95% in tool

Room
5. VRS in 2001—2002 opted by 2017 employees.
6. 9 FANUC Robots were installed in chakan plant to reduce component rejection.
Style & Skills
1. Flattered a more empowered organization structure in 2003-2004.
2. “Role-Goal clarity “ process in 2003-2004 at each management level.
3. A new and rejuvenated Bajaj Auto in 2003-2004 believes in speed and innovation
4. A 36o-degree feedback was done for all senior managers, including the Managing Director
in 2005-2006
5. Speed, Innovation and Perfection (Distinctly Ahead philosophy) in 2006-2007.
6. Average age of research engineer is below 30 years to maintain vibrancy in research
7. Total Quality Focus
• All manufacturing facilities were awarded by JlPM (Japan Institute of Plant

Maintenance) as winners of the ‘TPM excellence category in 200 -2008.
• A concurrent TPM Kick—off. conducting TPM on such a scale is definitely a first in
India, and possibly in the world in 2007-2008.
• 64 vendors received the 'Bajaj Quality Award' in 2007-2008.
8. Whistle Blower Policy in 2009-2010
Staff
1. Akurdi Plant provides “A world class development / training centre for its employees,
vendors and dealers.
2. Vendors were treated as brother rather than external entity.
3. TPM extended towards vendors to achieve Zero defect and rejection in component.
4. Lowest Attrition ration in R &D across industry

91
5. Continuous training and Quality focus has helped Bajaj to increase Vehicles per Person to
266 vehicles per person in 2007.
6. Bajaj performed re-structuring exercise for efficient management and greater operation
empowerment in July 2007.
TVS Motors
Strategy
TVS Motor’s business strategy is based on product differentiation with the focus on the
quality of products and services. Moreover, the automobile giant effectively positions
products as a ‘third place’ away from home and work, where customers can spend time alone.
Technological innovations and intensive integration of technology into various business
processes in general and ordering process in particular represent another important aspect of
TVS business strategy.
Structure
TVS Motors has a divisional organizational structure and integrates geographic and brand-
based divisions. The automobile giant’s geographic divisions include Indian subcontinent and
Malaysia.
Systems
There is a wide range of systems that facilitate day-to-day business of TVS. These include,
but not limited to employee recruitment and selection system, team development and
orientation system, transaction processing systems, customer relationship management
system, business intelligence system, knowledge management system and others
Hero MotorCorp
Strategy
Hero MotoCorp pursues differentiation business strategy with a particular focus on the design
and advanced features and capabilities of products. The company aims to benefit from the
first mover advantage to a maximum extent, as it was the case with introduction of Splendor,
the first motorcycle of its kind in India. Accordingly, Hero MotoCorp products and services
are generally more expensive compared to the competition.

92
Structure
Hero MotoCorp organizational structure offers certain advantages such as strong control by
senior management, employee motivation due to promotion opportunities and clear division
of authority and responsibility within the company. At the same time, there are certain
disadvantages such as lack of flexibility of the business and less efficient communication
across the business.
Systems
Hero MotoCorp business operations rely on a wide range of systems that include but not
limited to employee selection and recruitment, IT, finance and employee performance
appraisal and others. Moreover, Hero MotoCorp business model is unique in a way that the
company writes and designs

93
CHAPTER V
CONCLUSION

94
LEARNING
Through intense study of the Industry we learned the actual figures on what these companies
operate. We learnt how important the role Research and Development team is which we
earlier
didn’t know. It has helped us to learn more about the smartphone industry. We have learnt the
functioning of the industry and know about the leaders ruling this Industry who are also
world
class leaders people look upon. We are now aware of international as well as national
policies.

95
References

ukessays. (2015, March 25). Bajaj Two Wheeler Marketing Analysis. From ukessays:
https://www.ukessays.com/essays/marketing/bajaj-‐two-‐wheeler-‐marketing-‐marketing-‐
essay.php
wikipedia. (2018, February 18). Bajaj Auto. From wikipedia:
https://en.wikipedia.org/wiki/Bajaj_Auto
Wikipedia. (2018, February 22). Bharat Stage emission standards. From wikipedia:
https://en.wikipedia.org/wiki/Bharat_Stage_emission_standards
wikipedia. (2018, february 24). Hero MotoCorp. From wikipedia.:

https://en.wikipedia.org/wiki/Hero_MotoCorp#Employees
wikipedia. (2018, February 14). T. V. Sundaram Iyengar. From wikipedia:
https://en.wikipedia.org/wiki/T._V._Sundaram_Iyengar
wikipedia. (2018, 19 February). TVS Motor Company. From wikipedia:

https://en.wikipedia.org/wiki/TVS_Motor_Company
Bajaj Auto Ltd. (2017). bajajauto. From bajajauto: https://www.bajajauto.com/
bajajauto. (2017). Annual Report. bajajauto.
heromotocorp. (2017). Annual Report. heromotocorp.
heromotocorp. (n.d.). LEADERSHIP TEAM. From heromotocorp:

https://www.heromotocorp.com/en-‐in/about-‐us/leadership-‐team.html
heromotocorp. (n.d.). PROFILE OF DIRECTORS. From heromotocorp:

https://www.heromotocorp.com/en-‐in/about-‐us/profile-‐of-‐directors.html
Money Control. (2017). Hero Motocorp. From Money Control:

http://www.moneycontrol.com/financials/hero%20motocorp/consolidated-‐balance-‐
sheetVI/HHM
moneycontrol. (2017). Bajaj Auto Ltd. From moneycontrol.:

http://www.moneycontrol.com/india/stockpricequote/auto-‐2-‐3-‐wheelers/bajajauto/BA10
profit.ndtv. (2017). Hero MotoCorp Ltd. From profit.ndtv: http://profit.ndtv.com/stock/hero-‐

motocorp-‐ltd_heromotoco/reports
Sunila George, R. J. (2002). The Evolution and Structure of the Two-‐wheeler Industry in India.
34.
Shah, R. (2017, January 13). Top 10 two wheeler manufacturers in India in 2016. From
economictimes: https://auto.economictimes.indiatimes.com/news/two-‐wheelers/scooters-‐
mopeds/top-‐10-‐two-‐wheeler-‐manufacturers-‐in-‐2016/56491780
Spareaze. (2017, April 11). Two Wheeler Industry in India – Introduction & History. From
spareaze: http://www.spareaze.com/two-‐wheeler-‐industry-‐india/
Ramanujam, K. (n.d.). Analysis of Bajaj Auto Ltd. From scribd:
https://www.scribd.com/doc/36620936/Analysis-‐of-‐Bajaj-‐Auto-‐Ltd

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Review of two wheeler industry in India-‐ Opportunities, Issues and. (2002). 50.
tvsmotor. (n.d.). Heritage. From tvsmotor: https://www.tvsmotor.com/heritage
Team Fintapp. (2017, September 7). Indian Two wheelerIndustry Analysis Research report. From
Fintapp: https://www.fintapp.com/blog/two-‐wheeler-‐industry-‐analysis-‐research-‐report/

Industrial Review Project On Banking Two-Wheeler Industry

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Industry Review Project

Submitted in partial fulfillment of the requirements for the award of the

Degree of Bachelor of Business Administration

Under the guidance of

Prof Mahesh Kumar Sharda

Department of Management Studies

Date: Anant Murarka

Date: Prof. Mahesh Kumar Sharda

Date: Prof. Mahesh Kumar Sharda

Date: Prof. Mahesh Kumar Sharda

I Introduction to the Industry 9-27

III Research Methodology 80-82

(…of three companies from the industry on a given

V Findings and Conclusion 93-94

Bibliography and Annexure 95

INTRODUCTION TO THE INDUSTRY

History of Two wheeler industry in India

Journey of Two Wheeler Industry in India

Period of Entry 1955-1969

Period of Entry 1970-1980

Period of Entry 1981-1990

Period of Entry 1991-2000

Evolution of the Indian two-wheeler industry

Major Players and their market share

Insights from the above data

Domestic Scooter Market

Domestic Motorcycle Market

Industry Growth Rate and Turnover

Evolution of the Policy Framework

develop an indigenous ancillaries sector, resulted in the evolution of a separate auto-

3. Hydrogen energy roadmap has been prepared by Ratan Tata.

Emission and Safety Standards

Inter-State Differences in Policies

A major weakness in Indian policy framework is inter-state differences in policies, as our

o Exemption from central excise is given for 10 years of establishment.

o Exemption from entry tax on plant and machinery is granted.

-The Maharashtra Government provides capital subsidy to the SSIs.

-The Tamil Nadu Government provides the following subsidies:

o Reimbursement of patent registration fee up to 50 per cent of expenses or₹. 1 lakh,

-The Uttarakhand government provides the following subsidies:

o Capital subsidy of 15 per cent with a maximum of₹. 30 lakh is provided.

Bajaj Auto Ltd.

Jamnalal Bajaj (4 November 1889– 11 February 1942) was an Indian industrialist, a

With the intent of eradicating untouchability, he fought the non-admission

R C Maheshwari Rakesh Sharma

12 mths 12 mths 12 mths 12 mths 12 mths

Profit & Loss Statement:

Standalone Profit & Loss account ------------------- in Rs. Cr. -------------------

12 mths 12 mths 12 mths 12 mths 12 mths

12 mths 12 mths 12 mths 12 mths 12 mths

Profit/Loss Before Exceptional,

Profit/Loss From Continuing Operations 3,827.56 3,652.41 2,813.74 3,243.32 3,043.57

12 mths 12 mths 12 mths 12 mths 12 mths

OTHER ADDITIONAL INFORMATION

Awards & Recognition

T.V. Sundaram Iyengar was born in 1877 in Thirukkurungudi in the Tirunelveli

TVS Motor Product Range

SCOOTERS MOTORCYCLES MOPEDS

1 Ntorq Apache XL 100

2 Jupiter Victor XL 100 heavy duty

4 Zest Star City Plus

TVS CLIENT PROFILE

Name Age Since Current Position