Sie sind auf Seite 1von 42

Swami Vivekanand Group of colleges,Indore

Major Research Project


on sales performance and Brand preference of motorcycl companies - A partial analysis
For Partial Fulfillment Of the Requirement for the Degree of

MBA (Full Time) Batch - 2009 2011


Submitted by : Hitesh mandloi MBA (4rth Sem) Guided by : Prof. Shilpi Mehta SVGC, Indore

Affiliated to: Devi Ahilya Vishwavidyalaya, Indore

CERTIFICATE

This is to certify that Mr. Hitesh mandloi, student of Swami vivekanand group of colleges Indore, of MBA IV SEM (Full Time) program has prepared Major Research Project Report on the topic sales performance and brand preference of motorcycle companies-A partial analysis. under my guidance.

Prof. Shilpi Mehta SVGC,Indore

DECLARATION

I am Hitesh mandloi student of swami vivekanand group of colleges , Indore, pursuing MBA (IV Sem,Full Time) has prepared the Research on the Topic Sales performance and brand preference of motorcycle companies A partial analysis. The research as per my knowledge is the original and genuine work. The research is not published in any research Journal previously.

Hitesh mandloi MBA 4TH Sem(Full Time) 2009-2011

ACKNOWLEDGMENT

I would like to take this opportunity to express my since gratitude to all those who guide me in right direction to complete this Project. I express my deep sincere gratitude to Mr. Akshay Dube Director of swami vivekanand group of colleges Indore, for his encouragement throughout the course of this study. I also express my sincere thank to Mrs. Shilpi Mehta lecturer of Swami vivekanand group of colleges ,Indore, for his constant guidance and assistance throughout this study. Last but not the least; I would like to thank my respondents for sparing their precious time to answer my questionnaire and giving me the valuable information that I needed.

Table of contents SR. No. 1 2 3 4 Particulars RESEARCH TOPIC INTRODUCTION DETAILS OF COMPANY RATIONALE OF STUDY PAGE No. 1 6-8 9-12
3-14

5 6

REVIEW OF LITERATURE RESEARCH METHODOLOGY A)OBJECTIVE B)HYPOTHESIS C)RESEARCH DESIGN D)SAMPLE DESIGN E)TOOLS FOR DATA ANALYSIS ANALYSIS AND INTERPRETATION OF DATA DISCUSSION OF RESULT A)FINDINGS B)LIMITATION C)CONCLUSION BIBLIOGRAPHY AND WEBLIOGRAPHY ANNEXURE

15-23 24-29

7 8

29-43 44-48

9 10

49-50 51-54

CHAPTER 1 INTRODUCTION

INTRODUCTION
India is the second largest manufacture and producer of two wheelers in the world. It stands next only to Japan and china in terms of the number of two wheelers produced and domestic sales respectively. Indian prefer the two wheeler because of there small manageable size, low maintenance, pricing and easy loan repayment. Indian streets are full of people of all age groups riding a two wheeler. The two wheeler segment isthe largest in the Indian automotive industry today in terms of volume. With9,684,327 units sold in country in year 2010-11 and two wheelers accounted for81.23%of total vehicles sold in the previous financial year. The Indian two wheeler industry made a small beginning in the early 50swhen automobile products in India (API) started manufacturing scooters incountry. Until 1958, API and ENFIELD were the sole producers.In 1948, BAJAJ Auto began trading in imported vespa scooters and three wheelers. Finally,in 1960, it set up a shop to manufacture them in technical collaboration with Piaggo of Italy. The agreement expired in 1971. In the initial stage API dominated the scooter segment; BAJAJ auto later overtook it. Although, various government and private enterprises entered the fray of scooters. Under the regulation regime, foreign companies were not allowed to operate in India. It was a complete seller market with the waiting period for getting a scooter from BAJAJ auto being as high as 12 years. The motor cycle segment was no different, with only three manufactures viz Enfield, Ideal Java and Escorts. While Enfield was four- stroke bike, jawa and Rajdoot were two-stroke bikes. The motor cycle segment was initially dominated by Enfield 350cc bikes and Escort 175cc bike. The two wheeler market was opened to foreign competition in mid-80.And then market leaders-Escort and Enfield- were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel efficient low power bikes, demand swelled, resulting in HERO HONDA-then the only producer of four-stroke bikes (100cccategory), gaining a top slot.

To own a motorcycle is a dream of every Indian a service class man, a self employed person, a businessman or a college boy.The macho image of a motorcycle hits the psychology of an Indian individual and compels him to buy a motorcycle. No matter what the classis, a bike appeals equally to all. Consumers view a brand as an important part of a product and branding can add value to a product. Selling a concept that consumers will not buy affects the goodwill of the company, and so the companies are nowadays putting enough of the firms revenue into selling and promotion efforts .A host of factors are at play these days which are driving the industry sales up. Two most powerful of them are changing customer Preferences and new product launches. Several manufacture stasted success on account of their ability to make new products, identify target market segments and create an innovative product for them. Launches of new products of high and consistent qualities are a key to growth. Two- wheeler sales in the country have sky rocketed in the recent years, and the annual sales of motorcycles in India expected to cross the 10 million mark by 2010. The low penetration of two-wheelers in the country 31 two-wheelers per 1000 citizens (2004) leaves immense scope for the growth of the market. Overall the industry sales of two-wheelers have grown by 15% from 6.57 million in 2004/2005 to 7.57 million in 2005/2006. The buoyant Indian economy with a growth rate of around 8% per annum is further expected to fuel the growth of two wheeler in the country. The share of motorcycles have increased over the years, while that of other twowheelers like geared scooters, scooterettes and mopeds have shown a negative growth or remained stagnant. The two-wheelers have penetrated 7% of rural house hold and 24% of urban markets, thus it leaves an immense scope for the market to grow. Bajaj Auto one of the leading producers of automobiles in the country has been able to sell close to 2.3 million vehicles in 2005/2006, the sales of the company grew by almost 31%. The company registered a 32% growth in the sales of motorcycles much above the industry average of 19%. Bajaj Auto has emerged as a market leader in the entry level or price segment motorcycle with the Bajaj CT 100 accounting for nearly 40% of the market share. It also commands a 62% market share in the premium segment of motorcycles with products like the Bajaj Pulsar DTSI. TVS Motors which has lots of firsts to its credit in the two-wheeler sector in the country was able to sell 1.34 million units during the same period thus registering an overall growth of 15% from the previous year. In the motorcycle segment the company's growth in sales was in sync with the industry average.

The introductions of motorcycles like the TVS Star range of motorcycles have helped the company in gaining a healthy market share in this segment. Where the company has emerged as a clear winner by holding onto its leadership position is inthemopedsegment. The company has posted a 10% growth in sales accounting for a market share of about 77%. The company also expects to arrest the decline of its one time best seller TVS VictorthroughitsnewvariantVictorGLS. If this figures have daunted you the best is yet to come, the country leader in twowheelers hero honda have crossed the three million mark during the year 2005/2006 which is a good few lakhs more than its nearest competitor Bajaj Auto. The company accounted for nearly 40% of then two-wheeler market. In the motorcycle segment the company has been able to attain a market share of about 50%. The segment in which hero honda has emerged as a clear winner is the Deluxe segment, which is the largest segment in the motorcycles category, with its flagship family of motorcycles splendor selling over 1.2 million units which is just a shade less than all the two wheelers sold by TVS during the same year. The motorcycle category is expected to see a further growth and according to industry experts it will drive all other category of two-wheelers to the periphery. The table below shows the over all trend of Industry Sales over a 5 year period. The figures are provided by the Society of automobile Manufactures Association (SIAM).

INDUSTRY TODAY Following India's economic liberalization in 1991, the two wheeler industry was opened for 100 percent foreign direct investment. A surge in the country's economic growth rate and purchasing power has fueled a 17% annual growth rate in the Indian two wheeler industry since 1991. The two wheeler industry generates direct and indirect employment to about 6.1 million people as of 2006-07.The automotive parts and cars exports has grown at an annual rate of 30% per year in the 21st century. However, the India's share of the overall global two wheeler industry remains low as of 2007. Increased competitin amongst automobile manufacturers provides for a variety of competitive options for the consumer. India was one of the largest manufacturers of two wheeler in the world in 2005-06, when it produced 293,000 units. India produced 65 Million tyres during FY 200506. India's tyre production meets domestic demand, as well as are exported to over 60countries.

CHAPTER 2 DETAILS OF COMPANY

HERO HONDA

company Profile: Hero, a name synonymous with two wheelers in India,began its journey aroundfour decades ago. Starting as a manufacturer ofbicycle components, Hero has today grown into a multi-unit, multi-product,geographically diversified group of companies. Like every success story,Hero's saga contains an element of spirit and enterprise of achievementthrough grit and determination, coupled with vision and meticulousplanning.The Hero Group began with a simple philosophy: toprovide excellent transportation to the common man, at a price he couldeasily afford. It isthis spirit, which drives Hero even today; the dream ofproviding totalsatisfactionin all its spheres of activity. To consumers, inexcellent products at an affordable price; to employees, in a fine quality oflife and to business associates, in a total sense of belonging. A thorough understanding of fast-changing consumer behavior, new market customer segments and product opportunities, and a marketing mix sensitive tochanging customer needs, form the core of Hero's marketing strategy andphilosophy. Hero is also the largest manufacturer of 100cc motorcyclesin India, and has a substantial presence in mopeds and auto-ancillaries.The search for excellence led to the creation of several companies by theHero Group. Companies that maintained the ethos of perfect quality, whichhelped the group, attain its global stature and self-reliance in the entiremanufacturing process.Keeping the wheels of progress turning are the individualcompanies of the Hero Group. Each an independent profitcenters. Eacha success story in its own right. The two wheeler division of the HeroGroup has already networked more than 3,500 dealer outlets, each with itscomplement of trained mechanics and workers.

BAJAJ

Company Profile: The Bajaj Group came into existence during the turmoil and the heady euphoria of India's freedom struggle. Jamnalal Bajaj, founder of the Bajaj Group, was a confidante and disciple of Mahatma Gandhi, and was deeply involved in the effort for freedom. The integrity, dedication ,resourcefulness and determination to succeed which are characteristic of the Company today, are often traced back to its birth during those long days of relentless devotion to a common cause. Today, Rahul Bajaj is the Head of the Group. He has been the Chief Executive Officer of Bajaj since 1968 and is recognized as one of the most outstanding business leaders in India. As dynamic and ambitious as his illustrious predecessors, he has been recognized for his achievements at various national and international fora. Bajaj is currently India's largest two and three-wheeler manufacturer and one of the biggest in the world. We have long left behind our annual turnover of Rs.70 million(1968), to currently register an impressive figure of Rs.40 billion.Companys Philosophy & beliefs - We approach our responsibilities with ambition and resourcefulness. We organise ourselves for a transparent and harmonious flow of work. We respect sound theory and encourage creative experimentation. And we make our workplace a source of pride. Transparency - a commitment that the business is managed along transparent lines. Fairness - to all stakeholders in the Company, but especially to minority shareholders. Disclosure - of all relevant financial and non-financial information in an easily understood manner. Supervision - of the Companys activities by a professionally competent and independent management and board of directors. Board of directors: Chairman : Rahul Bajaj; Vice Chairman: Madhur bajaj

TVS Motor Company

Company profile TVS Motor Company is part of Sundaram Claytongroup in TVS group of companies. TVS Motor Company is the main flagship company of Sundaram Clayton group. In 1979 Sundaram-ClaytonLimited (SCL) started Moped Division at House to manufacture TVS 50mopeds, indigenously designed and developed. In 1982 SCL establishedJoint Venture with Suzuki Motor Corporation. In 1994 the company enteredthe market segment of scooters with introduction of scooty 2S, which wastotally an indigenous design. In 2000 the first 4 stroke motorcycle was launched called Fiero.To become independent & increase profitability theR&D activities were focused & after parting away with Suzuki in 2001TVS motor company was formed. The first indigenous product Victorwas launched which was very popular. This success triggered introductionof new models every year. TVS Motor the launched variants of Victor,Fiero & new products like Centra & star. Overall TVS Motors establishedthe presence in each segment of two wheelers: Mopeds, Motorcycles andscooters. Figure below shows the history graph with models which wentthrough predominantly through three phases. Board of Directors: Director : Gopal Srinivasan Chairman & Managing Director : Venu Srinivasan

YAMAHA

Company Profile: Yamaha Motor India (YMI) Ltd. is the fully-owned subsidiary of Yamaha Motor Co. of Japan. YMI was initially known as Yamaha Motor Escorts Ltd. but the parent company, Yamaha Motor25Company, purchased Escorts Ltd's remaining 26 per cent holding in their motorcycle joint venture Yamaha Motor Escorts Ltd in June 2001. It was therefore renamed as Yamaha Motor India Ltd.YMI follows Yamaha Motor's corporate mission of creating 'Kando' - a unique Japanese word that means 'touching people's hearts.' 'Kando' also describes the 'spirit of challenge" to create new value surpassing customer expectations. YMI is committed to making products that benefit from the skills and technology used by Yamaha world-wide. To fulfill customer satisfaction, and meet the needs of theIndian market, YMI plans to produce one or more models in the first year, four models in three years. To achieve these goals, YMI will pursue three major objectives within the company. The first is customer satisfaction. The second is strengthening R&D. YMI's mission is to constantly produce what customers are looking for, by analyzing market trends and changes. The third objective is to optimize the internal working system. YMI's motto is 'Speed, Quality, and Yamahas original design'. Yamaha is aiming to make a significant contribution to Indian society and create products that the people of India will take to their hearts.

CHAPTER 3 REVIEW OF LITERATURE

LITRATURE REVIEW Two-wheeler industry: Facing a crisis?he two-wheeler industry has seen an unexpected slump in the current year. Firm interest rates are being cited as the obvious reason for the lack of demand . The two-wheeler has always been an intrinsic part of the Indian milieu. It offered and continues to offer the Indian middle class the freedom from the clutches of an often non-existent or unreliable public transport system. It offers mobility at a reasonable cost. For a large portion of the population a scooter or a motorcycle is a necessary accessory for their livelihood. . Of late, the two-wheeler industry has been under an analytical microscope with volumes slowing down and even showing a negative growth. Financiers are being more cautious in their lending, leading to greater pressure on volumes. The industry seems to be caught in a negative downturn at the moment but the key question remains is this downturn temporary or is it here to stay? From the financiers perspective, servicing this industry and this customer segment is an operationally intensive exercise, covering locations that fall outside city limits and being dependent on correspondent banking relationships and a robust collection infrastructure. In the case of a downturn, caution enters the equation as look to keep NPAs under control. The customer typically belongs to the lower-middle and middle class. For this segment, aspirations have outpaced real income growth leading to a greater propensity to borrow and spend. With rising inflation, this segment has found itself over-leveraged. The hardening of interest rates at such a juncture leads to the customer postponing or deferring a new purchase. This is what has happened to the 2 wheeler industry today

The one-lakh-rupee car is seen to be another threat to the two-wheeler industry but the truth is that the running and maintenance cost and the sheer convenience of a two-wheeler, given our infrastructure, are difficult to replace. However we must wait and judge the aspirational impact of owning a car on the Indian consumer.

This environment has prevailed for the past six months but this is beginning to see a change with inflation showing a definite decline and interest rates showing the first signs of softening. As a general trend the industry has begun to lower interest rates, in a segmented fashion. Given these changes in the environment I expect to see an increase in demand with a certain lag effect the time it takes the benefits of reduced inflation to impact the customers cash flows. Manufacturers are also working at increased segmenting of the market launching products aimed a newer segments like girls and women. Newer products, such as electrically powered motorbikes are also being introduced in the market. The market also is seeing a lot of action in the 150cc plus market with new models slated to hit the market. At the same time, brand building and promotional spends of top manufacturers have not shown significant reduction, keeping the category in the minds of potential customers. I expect that the festive season will bring in price-offs and discounts along with other promotional offers that willprovide another fillip tosales . While this will have a temporary impact, it is imperative that the manufacturers, dealers and financiers work together even more closely. Manufacturers have a very strong relationship with their suppliers and dealers but very often view the financier as an external service provider. The financier has to have greater integration in the entiresupply chain, working towards maximising customer solutions and services. . To sum up, I would like to state that all the economic indicators remain positive. The demographics of the country remain favourable for the industry and there is a tremendous tailwind in the economy and a spirit of prevailing optimism in the country, which makes me very confident that a turn around in the two-wheeler industry is just around the corner.

A New Entry In His Motorcycle Diaries


Bajaj Auto is suddenly in the news. Apart from the partnership with French auto maker Renault for small cars and light trucks and buses, the Pune-based two wheeler major is also readying to redefine the entry level segment with its new motorcycle due out shortly. For managing director Rajiv Bajaj this is nothing short of a moment of reckoning.Will the company be able to kickstart growth in a nowskidding bike market? Bajaj is betting it can Nandini Sen Gupta 2007 Aug 02 Things are not going too well for Indias seven million unit strong motorcycle market. The growth has begun to sputter out and most players are using marketing muscle to push numbers. So will the moto market pick up speed once the new models start rolling in? ET AutoMania spoke to Bajaj Auto MD Rajiv Bajaj for some answers. Excerpts from the interview: The motorcycle market has been going through a fairly steep de-growth and is down more than 14% in June. What do you think is the trigger? Is it due to the interest rate squeeze? Or is there another reason for the skid? I believe there's a fundamental shift taking place in the two-wheeler industry. And if we look back, the parallels with the late 90s becomes clear. Back then scooters were 50% of the two-wheeler market and motorcycles contributed the balance 50%. But the scooter market was rapidly depleted as consumers moved away from them. Today, the two-wheeler market is once again witnessing something similar. The 100 cc four-stroke motorcycle comprises just over 50% of the total twowheeler market. While scooters, scooterettes and higher dis-placement bikes bring in the rest. The current degrowth is basically happening in the entry level motorcycle segment. Scooters and scooterettes are doing well so are the 125 cc and above motorcycles. But because the 100 cc segment makes up two-thirds of the motorcy-cle market, it's degrowth is pulling down the entire pile.

Why is the degrowth happening in that segment alone? I believe it is product fatigue. In the scooter and scooterette segment, Bajaj, HeroHonda, HMSI, TVS have all introduced new products. In the 125cc and above motorcycle segment too there have been new launches from all these players. That's why the growth has moved to these segments. In the 100 cc market, the products haven't changed. And that's true as much for Bajaj as for Hero Hondaor TVS.That's the reason why there's no demand pull there any more. It's become a zero sum game with marketers pushing the bikes Will this trend lead to a more fundamental shift in the motorcycle market? Absolutely. We believe that our non-100 cc new motorcycle, which will be launched in the first week of September, will be able to create fresh excitement in this market. Nearly two decades ago, the consumer had switched off from scooters. Now they are switching off from the 100cc-fourstroke bike. So history seems to be repeatingitself.What is the current segment-wise break up in the motorcycle market? Currently the market is divided into three segments. One third of the market comprises the 125 cc and above range. One third comes from the entry level 100 cc bikes which includes the Platina and CT100 from Bajaj, CD Dawn from Hero Honda and Star and Star City from TVS. The remaining onethird comes from the segment sandwiched in between which is Splendor Passion territory. We have market leader-ship at the top and at the bottom of the pile but in the middle Hero Honda enjoys over 90% marketshare. That's where the volume difference comes in. If as you say the 125 ccplus market is doing well, why the increasingly yawning difference in monthly volumes between Bajaj and Hero Honda? That's mostly due to the degrowth in the 100 cc segment and the fact that we have rationalised our dealer inventory. If you compare retail to retail, the difference I believe will be a lot less. How will your new product help plug this difference? The new product will offer consumers something different in the value or executive segment. This is a very curious consumer -- he is willing to pay almost Rs 10,000 more than a similar bike in the entry level segment. Yet he is unwilling to pay a couple of thousands more for a 125 cc-plus bike. He pays that extra amount for a perceived differen-tial that we can tap into with a product that offers a real one. Our product will be priced in the sandwich segment but will be technologi-cally and in terms of features a bike that belongs to the performance segment.

Two-wheeler industry: Facing a crisis?


2007 Oct 16 VIVEK VIG Country Head, Retail Centurion Bank of Punjab THE two-wheeler has always been an intrinsic part of the Indian milieu. It offered and continues to offer the Indian middle class the freedom from the clutches of an often non-existent or unreliable public transport system. It offers mobility at a reasonable cost. For a large portion of the population a scooter or a motorcycle is a necessary accessory for their livelihood . Of late, the twowheeler industry has been under an analytical microscope with volumes slowing down and even showing a negative growth. Financiers are being more cautious in their lending, leading to greater pressure on volumes. The industry seems to be caught in a negative downturn at the moment but the key question remains is this downturn temporary or is it here to stay? From the financiers perspective, servicing this industry and this customer segment is an operationally intensive exercise, covering locations that fall outside city limits and being dependent on correspondent banking relationships and a robust collection infrastructure. In the case of a downturn, caution enters the equation as financiers look to keep NPAs under control. . The customer typically belongs to the lower-middle and middle class. For this segment, aspirations have outpaced real income growth leading to a greater propensity to borrow and spend. With rising inflation, this segment has found itself over-leveraged. The hardening of interest rates at such a juncture leads to the customer postponing or deferring a new purchase. . .The one-lakh-rupee car is seen to be another threat to the two-wheeler industry but the truth is that the running and maintenance cost and the sheer convenience of a two-wheeler, given our infrastructure, are difficult to replace. However we must wait and judge the aspirational impact of owning a car on the Indian consumer. This environment has prevailed for the past six months but this is beginning to see a change with inflation showing a definite decline and interest rates showing the first signs of softening. As a general trend the industry has begun to lower interest rates, in a segmented fashion. Given these changes in the environment I expect to see an increase in demand with a certain lag effect the time it takes the benefits of reduced inflation to impact the customers cash flows.

Manufacturers are also working at increased segmenting of the market launching products aimed a newer segments like girls and women. Newer products, such as electrically powered motorbikes are also being introduced in the market. The market also is seeing a lot of action in the 150cc plus market with new models slated to hit the market. At the same time, brand building and promotional spends of top manufacturers have not shown significant reduction, keeping the category in the minds of potential customers. I expect that the festive season will bring in price-offs and discounts along with other promotional offers that will provide another fillip to sales. . While this will have a temporary impact, it is imperative that the manufacturers, dealers and financiers work together even more closely. Manufacturers have a very strong relationship with their suppliers and dealers but very often view the financier as an external service provider. The financier has to have greater integration in the entire supply chain, working towards maximising customer solutions and services. . To sum up, I would like to state that all the economic indicators remain positive. The demographics of the country remain favourable for the industry and there is a tremendous tailwind in the economy and a spirit of prevailing optimism in the country, which makes me very confident that a turn around in the two-wheeler industry is just around the corner.

VENU SRINIVASAN CMD TVS Motor Company


THERE is no doubt that the twowheeler market in general, and the motorcycle market in particular, is witnessing a demand slowdown.The domestic sales of two-wheelers is down by 9.47% in the first six months of the fiscal 200708, according to statistics published by the Society of Indian Automobile Manufacturers (SIAM). Within the overall twowheelers category, motorcycles and stepthroughs are down by 15.2%. The domestic sales of the largest category motorcycles of engine capacity 75 cc and above, but less than 125 cc were down by over 21% in the first six months. The domestic sales of scooters were, however, up 20% in the period April-September 2007 over the corresponding period last year. . The issue, I feel, is three-fold. Firstly, there has been a slowdown in the rate of economic growth. That should not be mixed up with a slowdown in the economy. But we must remember that we are coming off a high growth rate. And any slowdown in the rate of economic growth, indeed even a one per cent decline, tends to get exaggerated many times over. . The second reason for the demand skid in motorcycles is the credit squeeze. With the money supply going up really fast, the Reserve Bank of India (RBI) decided to cut back. As a result of the tightening by the central bank, loans to two-wheelers got severely pinched. . There is another angle to that story. Last year, two-wheeler loans saw a huge amount of delinquency. So when the credit squeeze happened, two-wheeler financing was the first to feel the pinch as banks cut back. The other reason for the two-wheeler demand slack is, of course, inventory levels. Last October-March saw stock rising for the big three bike manufacturers Hero Honda Motors Ltd, Bajaj Auto Ltd and TVS Motor Company. Everyone expected demand to pick up speed. It did not and that led to higher inventory levels. All of that finally impacted overall demand and offtake. . Typically, motorcycles are bellwether products. At the bottom of the economy, motorcycles are the first thing that people actually buy; not a car. So the way demand performs in two-wheelers is an indication of things to come. In that sense two-wheelers are a lead indicator of sorts for the economy. And sure enough, the two-wheeler demand got hit first, then commercial vehicles dropped and then the slowdown hit the car market as well. And now its no longer just the automobiles; consumer durable demand has started to take a knocking as well. That brings me to the important question: is the two-wheeler slowdown a temporary blip or a long term trend? I dont believe the demand for two-wheelers will perk up till the money supply eases out and banks start giving out loans once

again. Even the launch of new models will not make much of a difference to the demand situation. The new launches may lead to marketshare changes but overall sales wont increase very much. Do I see light at the end of the tunnel any time soon? Not really. I believe there is still a lot of pain to come. Subsidies on petroleum products and fertiliser are rising rapidly on account of the increase in global crude oil prices the price of Indian basket of crude has gone up from a low of about $63 a barrel in May this year to about $78 a barrel now. This will soon start to bite.Right now a strong rupee which has appreciated by about 15% against the dollar in the last one year is propping up economic activity in the country by boosting imports. But that is not sustainable in the long run.

SHARAD VERMA Principal, The Boston Consulting Group


OVER the last decade the two-wheeler industry has been one of the highest value creators, recording annualised shareholder returns of over 40%. One of the chief drivers of this value creation has been the strong sales growth, which has sustained at over 15% over the last five years. However, in the last six months of this financial year the industry recorded an overall decline of 7% on the back of a rising interest rate regime. Further, the prospect of the much awaited 1 lakh car has raised apprehensions of cannibalisation of demand. These events have the raised the question of whether the industry is facing a crisis and is the negative growth the start of a long-term trend. If one examines the recent decline, it has largely been for the entry level segment both the 125cc+ motorcycle segments as well as the ungeared scooter market have expanded. The primary reason for the decline has been the limited supply of credit. Several financiers have withdrawn from the market, or reduced their exposures, driven primarily by high delinquency levels. Thus ironically it has been the supply (of finance) that has been the hurdle and not customer demand. The threat from the 1 lakh car appears to be limited. The current substitute in the form of used cars already exists. The relevant segment that could migrate is the premium commuter segment which comprises only 5-10% of the overall volumes. Further, we estimate that the total cost of ownership (TCO) for the 1 lakh car would be ~3x that of a two-wheeler and this would deter customer migration. Finally, fundamental demand drivers remain strong rising income levels, increase in youth population, absence of quality public transportation, low penetration levels in particular in smaller towns and rural markets and shorter replacement cycles. Having said that, for the industry to realise this demand and sustain the growth momentum a different approach is required from the past. The focus needs be on innovation across product-markets and to redefine their scope of business operations. In the domestic market two segments are expected to contribute significantly to growth.The urban middle class (annual household income between Rs 2-10 lakh) and the rural aspirers (annual household income between Rs 1-2 lakh). Both these segments offer unique challenges. The growth in the urban middle class will be driven by increasing number of households and rising income levels. Thus product demand will get created and the focus will be on delivering affordable financing. Existing financing sources are going to be challenged given the reach required and the cost of serving these higher credit risk segments. Two-wheeler players will need to develop captive or alliance opportunities for credit provision in such markets. (In Indonesia, the absence of a

developed financing infrastructure has prompted local players to create their own captive arms for their customers). The growth in rural aspirers will be primarily driven by an increase in penetration levels (current figures are at 15 vehicles per thousand household). The challenge here is to create a unique product for this market, rather than an adaptation of the existing urban vehicle, which meets the needs and price expectations of the customer. Finally, local players need to explore global markets to de-risk local demand cycles. India has players which have the scale and capabilities to compete on a global basis and there is a significant opportunity available in developing markets, in particular in SE Asia and Latin America. The critical aspect is to not view this as an exports option but as an opportunity to create a local dominant position in these markets.

BIKES MAKE A COMEBACK


The domestic two-wheeler industry has seen strong sales in the first half of the ongoing financial year and study suggests that the situation will get better Varad More 2009 Oct 29 The latest report disclosed by Credit Analysis & REsearch Ltd. (CARE) has thrown light over the developing Indian two-wheeler industry, which is steadily recovering from the heavy losses suffered during the recent economic meltdown. According to the sales results for the first half of the financial year 2009-2010, the domestic motorcycle market registered a growth of 14.9 percent over the same period in the last fiscal year (2008-2009). The total sales of domestic models recorded in the first half the ongoing financial year was 3.52 million units as compared to 3.06 million units sold in first half of financial year 2008-2009. These statistics indicate that the industry has once again caught on steady pace and it will see better times in days to come, especially in the entrylevel motorcycle segment. Sales of entry level motorcycles falling under the 75cc to 124cc bracket experienced a growth of 16 percent over last year's results in the same period. The economy conscious segment of small capacity motorcycles is the largest segment in the Indian motorcycle bazaar and it currently holds a market share of close to 72-73 percent out of the overall motorcycle sales in the country. Motorcycles ranging from 125cc upto 249c, which seize 23-25 percent of the total market share, registered a consistent sales growth of 11.8 percent. Interestingly, the rather miniscule market of motorcycles falling in the category of 249cc and above showed incredible growth rate of 30.5% compared to last year. The total number of bikes sold in this segment for first half of the 2009-2010 financial year was 25,512 as against total sales of 19,548 for the same period in 2008-2009. The CARE study also suggested that 57 percent of the young population living in cities who can afford to buy a twowheeler, already have one in their household while in the rural areas, 15 percent of young people who could afford a twowheeler and had purchased one already. This highlights the potential of growth and benefits the Indian motorcycle industry can reap from rural areas. The research estimates that the domestic motorcycle industry sales will go beyond 9 million units by 2014, which is a growth of 5.8 percent compared to the last year's total sales results.

Two-wheeler industry lines up new launches to fuel sales


Lijee Philip MUMBAI 13 OCTOBER 2004 Oct 14 NEW launches and a line-up of promotions in the two-wheeler industry is expected to fuel a 15-20% jump in volumes this festive season. Industry players have budgeted an estimated Rs 150 crore to be spent in the next two to three months on promotional activities and gifts.The October-December period tends to account for more than one third of annual sales for the two-wheeler industry. Understandably two-wheeler manufacturers have geared up to increase production to meet the increase in demand. While two-wheelers receive a sales boost due to the marriage season and bonus time for salaried employees, it is the largest constituent of the two-wheeler industry, motorcycles, which sees the real brand wars. While high petrol prices are likely to act as a dampener to the festive season growth, twowheeler manufacturers are keeping their fingers crossed over future trends. The 3 big two-wheeler companies, Hero Honda, Bajaj Auto and TVS, have lined up promotional schemes this festive season. RL Ravichandran of Bajaj Auto, expects new launches to contribute the most to this festive season. We are banking on zero per cent schemes and loan melas to trigger growth, he says. Adds R Chandramouli of TVS, we have lined up incentives for all our products, except for Star and the 2-stroke motorcycles. The two-wheeler segment expects a rebound in the second half of the current financial year. As compared with a 30% volume growth in 03-04 in the motorcycle segment, the overall two-wheeler market is expected to grow by 10% and the motorcycle segment by 12% during 2004-05. Going forward, with increasing penetration of motorcycles in the urban and semiurban markets and entry of newer players, the two-wheeler segment will find it hard to maintain the growth momentum. Moreover, the companys presence in low volume segments such as geared scooters and mopeds is likely to put pressure on margins, sources said. Hero Hondas April-September 04 sales surged 35.2% at 12.2 lakh motorcycles from 9.05 lakh units in the year-ago period, while BALs cumulative bike sales grew 25% at 6.12 lakh units compared to 4.90 lakh units last fiscal. Meanwhile, the new strategy of bike makers is to reduce dependence on entry-level motorcycles and focus on higher margin executive (mid-market) and premium products.

CHAPTER 4 RESEARCH METHODOLOGY

1.RATIONALE OF STUDY
Transportation is major concern of daily life.with the advancement in technology transportation means are developing very fast. It becomes necessity for life. As India is developing as potential market for all the area.Automobile companies planning for their product development as consumer preference they are branding and promoting their product in very specialized manner. As a marketing management student,it is necessary to understand their strategies and to study affect their strategies on sales and brand performance. There are few good player which largely affect the market. This study will reveal comparison of sales and branding strategies and performance of automobile companies with special concern with two wheeler in Indian market.

2.OBJETIVES OF THE STUDY


Automobile industry has always been a talk of business matters. In automobile business too, motorcycle industry philosophy holds that achieving organizational goals depends on knowing the needs and wants of target market and delivering the desired satisfaction better than what competitors do. The consumer gets the best in the presence of many motorcycle companies which are offering various schemes. So how does one make a decision? What are the various options available to the consumers? Which company should one opt for? The choice seems endless. Hero Honda is providing various schemes from last 10-15 years. It desires to improve its market position. For this we need to know the awareness, attitudes, perception, behavior and preference of the potential customers. Therefore we intend to pursue a project on sales performance and brand preference of motorcycles in India, which would not only be beneficial for the customers in helping them to get a better insight of the clear scenario of the industry but also be of use to the companies which aspire to cater to the needs of the consumers.

3.Data Collection
In the field of sales performance of motorcycles, the data was collected from the dealers of the companies. For knowing the brand preference of motorcycles, the data was also collected by users. The primary data was collected through questionnaires. It provided versatility and helped in recording not only factual data but also attitudes and opinion of the consumers about motorcycles. The questionnaires were structured and disguised. Disguised because, the objective of inquiry was not revealed to the respondents and it was structured because a formal list of questions was formed so as to get the information. Since the customers of bikes have diverse socio-economic and cultural backgrounds, a structured survey yielded better result.

4.Sampling design
After deciding upon the data collection approach as well as the mode of communication to be adopted, the next step was designing the sample, which included the appropriate selection of the respondents as well as the number of people in the target sample. In other words the respondents selected for the purpose of data collection should be representation of large target market. The entire set of various segments in the population comprised all people related to motorcycles. All such people in Indore formed the sample frame. The next step was to generate sample which was are presentation of that sampling frame. The non probability sampling approach was adopted where the chance of a unit being included in sampling cannot be estimated. This approach was useful as the size of sample was not large. Also, inference drawn did not pertain to a quantitative estimation of value but based on qualitative logic. Precise precautions and assumptions were made using the sampling estimation. The approach was adopted for establishing certain attitudes and beliefs.

5.Sample size
The sample size for survey of brand preference ofprospective customers comprised of prospective customers comprised of100 people from different field like professionals, students, salaried etc.

6. SAMPLE TECHNIQUE Sample technique used in this survey will be random sampling which is the purest form of probability sampling.

7.Tools for Data Analysis Analysis of data will be done with the help of comparison on percentage basis and by using-Percentage -Statistical tool

CHAPTER 6 ANALYSIS AND INTERPRETATION OF DATA

CHAPTER 6 LIMITATION

LIMITATIONS
1.The research will be conducted in a limited area. 2.the internet can be irrelevant. 3.Time will be major constraint. 4.Smaller sample may not always give better result. Sample may not be true representative of the whole population. 5.The possibility of the biased responses can not be ruled out. 6.Due to language problem it is possible that the respondents are not be able to understand questionnaire and can cause misleading result. 7. Lack of availability of full information.

CHAPTER 7 CONCLUSION

CONCLUSION

The study intends to portray an in depth Analysis of sales performance and brand preference of motorcycle companies in India with special reference to Indore. The basis or the criteria for analyzing the sales performance and brand preference have taken to be style, power, price, reliability, fuel efficiency, self start, advanced technology and various other features. Various factors responsible for the growth motorcycle industry in India are advertisements, customer satisfaction, affordable mobility, easy finance option, short replacement cycles, product differentiation, market segmentation, demography factor and many other. The study reveals that the growth of motorcycle industry is an industrial boom in India, and companies like Hero Honda, Bajaj, TVS, are doing a remarkable job.

CHAPTER 8 BIBLIOGRAPHY WEBLIOGRAPHY

Bibliography
Kothari C.R., edition. Research Methodology Vishwa Publication,New Delhi,2nd

Kotlar,Philip, Marketing management, Prentice hall Of india Pvt. Ltd. New Delhi, 9th edition. Schiffman.g Leon and kanuk, Consumer behavior. (Engelwood cliffs, NJ.:Prentice hall,2004)

WEBLIOGRAPHY
1.www.herohonda.com 2.www.bajaj.com 3.www.tvs.com 4.www.yamaha.com 5www.automobileinindia.com