Head Office

Marketing plan of Honda siel car india ltd.
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Head office:
The Head Office pf Honda Siel is located at Plot#A1, Sector-
40/41, Surajpur KasnaRoad,
Greater GautamBuddha Nagar, Uttar Pradesh- 203207

Showcase Manufacturing Facility
HSC's manufacturing unit was set up in 1997 at Greater Noida,
U.P with an investment of Rs. 450 crore. The project is spread
across 150 acres of land (over 6, 00,000 sq. m.). The initial
installed capacity of the plant was 30,000 cars per annum, which
was recently increased to 50,000 cars. The capacity expansion
was possible because of the excellent performance of all the
Honda models in ndia. The expansion process involved an
investment of Rs.150 crores, with the covered area increasing
from 55,000 sq. m. to 1, 07,000 sq. m. The covered area now
constitutes 17 per cent of the total land area of the plant.
The company plans to further raise its capacity to 100,000 units
per annum by the end of 2007 and 150,000 units per annum by
2010.
Sales and Distribution Network
Honda Siel Cars ndia has a strong sales and distribution network
spread across the country. The network includes 51 Honda
Exclusive Authorized Dealerships in 21 cities. All HSC
dealerships are based on the "3S Facility" (Sales, Service,
Spares) format, offering complete range of services to its
customers.
The company is targeting 100 dealer outlets across ndia by 2007,
as per their expansion strategy which is based on the '1 dealer
per 1000 cars' formula


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Sales Performance1
1(Source:http:// www.hondac arindia.com /about/Hondannd
ia/Default.htm l
HSC closed the 2005-06 financial years with total sales of 42,727
units in the domestic
market - a growth of 14% over the previous financial year. The
company's, Honda City,
accounted for 37,545 units in the year. Of this, the City ZX, which
was made available to the customers in the end of November
2005, accounted for 17,165 units. Total Accord and CR-V sales
for 2005-06 stood at 3,324 and 1,858 units respectively.

Honda's globally successful Civic, which was launched in July
2006, proved to be an immediate hit in ndia. n the first month of
its launch it has emerged the segment leader, posting figures of
2441 units in a month.
The company is targeting an overall growth of 44% in the current
Financial Y

Honda's vision and roIe:

Fulfilling the global needs of personal mobility in the new
automotive society - go hand in hand with the corporate
philosophy: maintaining a global viewpoint, they are dedicated to
supplying products of the highest efficiency and quality at a
reasonable price for worldwide customer satisfaction.

n ndia, it is through HSC that customers can enjoy the benefits
of Honda's expertise.

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Soichiro's vision was international in character. His desire was to
lead the world in technology, and make a significant contribution
to the creation of a better society. As a result, most of the
products that Honda developed started out by making a
difference.
Honda is a global company with a global viewpoint and a four-
region global strategy that is reflected in a solid commitment to
local markets and economies. However, the most enduring
challenge has been to satisfy the ever-changing needs
Honda is a global company with a global viewpoint and a four-
region global strategy that is reflected in a solid commitment to
local markets and economies. However, the most enduring
challenge has been to satisfy the ever-changing needs of their
customers. This is the essential spirit of Honda. The Company's
vision is "To be a Company that the Society would want to Exist".
t strongly believes in Co-existence and Co-evolution, wherever it
operates.


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HSC practices high standards of Corporate Governance and
there is a strong emphasis on transparency in its transactions and
Code of Conduct for all Associates. t believes very strongly in the
practice a unique work culture, which has a sound foundation
right from the time of inception of the company .The management
style, is founded on the principle of "Respect for the individuals.
The Associates are trained by way of working, which is very
participative and based on nitiative, Equality and Trust. Regular

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Training programmes, including behavioral trainings, are being
arranged/conducted for all levels. t encourages its Associates to
be innovative at Work and practice Quality Circle activities in their
respective work areas. Need based overseas training are also a
part of the training system whenever required. Periodic Employee
Satisfaction Surveys (ESS) are being carried out and due
credence is given to the feedback from the Associates.

BASC MODELS AND PRODUCTS SOLD BY HSC:

HSC currently produces the Honda City, Civic and Accord
models in ndia and the CRV is sold as a full import from Japan.
The company operates under the stringent standards of SO 9001
for quality management and SO 14001 for environment
management. Company's products include the 7th Generation
Honda "ACCORD", launched in August, 2003 and New Honda
"CTY", launched in October, 2003. The company is also engaged
in selling its CR-V model through the CBU importation
programmed from Japan.

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There is a cutthroat competition existing in ndia particularly in the
ndian Automobile market today and this has particularly
happened because of the liberal policies of the government. The
consumers of today have become aware of what actually they
want particularly in an automobile. For example, consumers now
demand the fuel efficient vehicles and they have started showing
concerns towards the environmental pollution. Therefore the car
manufacturers have to consider the consumer preferences.
Extensive research and development, option of alternate fuels,
clean technologies and quality control to oversee adherence to
product conformance will shape the future of automobile sector in
ndia. The Government of ndia is slowly catching on to this trend
and would soon demand of the automobile sector such advanced
technologies.


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There is a cutthroat competition existing in ndia particularly in the
ndian Automobile market today and this has particularly
happened because of the liberal policies of the government. The
consumers of today have become aware of what actually they
want particularly in an automobile. For example, consumers now
demand the fuel efficient vehicles and they have started showing

Dilraj kaur
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concerns towards the environmental pollution. Therefore the car
manufacturers have to consider the consumer preferences.
Extensive research and development, option of alternate fuels,
clean technologies and quality control to oversee adherence to
product conformance will shape the future of automobile sector in
ndia. The Government of ndia is slowly catching on to this trend
and would soon demand of the automobile sector such advanced
technologies.

PEST ANALYSS
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T
Open Economy: ndia has recently opened up the economy
and hence there is
tremendous scope in terms of growth here. As one of the
emerging markets in
Asia, it has a lot of potential as the earning power of people
increases. (+)
Liberalization policy of Congress: The liberalization policy of
the government
started in 1990s has reaped tremendous benefits at this stage.
The ndian economy has opened up and if such policy continues
to be the agenda of the government then it would pave the way
for one of the most exciting markets for cars. (+)

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Rising GDP and per capita ncome indicates growth of
economy and hence
rises in demand. (+)
Segmentation: Younger generation has more disposable
income with increasing
salaries & they are also perceived to be more technology savvy &
ecologically conscious. 58% of ndian population is youth
population!! (+) This will be the target market for the next few
coming years.


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Today's society judges people on the type of car you drive.
Society does not like
to admit to this but it is very true. Manufactures know this
happens and targets their markets by these thoughts. For
example, anyone who drives a mini van is perceived as a soccer
mom. This is because the manufactures target mini vans to
mothers. Anyone who drives a nice vehicle is thought to be

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wealthy. No one wants to be seen driving an unattractive piece of
junk because of what other people will think of him or her.
Consumers also just feel better when they are driving a nice or
new car; it makes them feel better about themselves. Therefore
the car you buy reflects your social status also.
Another aspect of the sociocultural is the environmental
concerns for the need of
fuel-efficient vehicles.

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Opening up of ndian market to foreign investors has created a
rush of new
technologies. There is a thirst to grasp more and more of latest
technologies by the car manufactures. However, the R&D
expenditure of HONDA has reaped good benefits, making the
cars best among its league. (+) and also coming up with newer
and newer models.
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Political environment Largest democracy, era of coalition
governments, fair amount of political stability, political consensus
on economic reforms and higher target of growth of the economy,
sound legal system a factor contributing to a large foreign direct
investment.
Economic environment continued economic liberalization,
encouragement to foreign investment, big growth in services
sector, controlled inflation in recent time, reasonably stable
exchange rate, scarce and costly energy, abundance of skilled

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low cost labor, easy availability of raw material being a major
producer of steel.
Social environment large middle class, major changes in life
style, a choosy and looking for styling, comfort, etc, and fuel
efficiency conforming to environmental standards.

Technologically the industry is experiencing major changes.
The technology rests with very few players in the world.
ntense competition is major increase in urbanization,
consumption, both parent working, nuclear families,leisure
activities, and trend of using credit cards.
Technological environment technology import liberalized and
a significant effort in internal technology development.
ncreasing affluence of urban consumers would ensure
reasonable demand for cars. The changing lifestyles indicated
an increase in demand for cars in the mid price segment.
The changing buying behavior of the consumers shows that
they are becoming indicated in the coming years.
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We've used the Porters 5 Forces Model to gauge the industry
attractiveness
Threat of new entrants

The threat of new entrants is very low in the automobile industry.
The industry is very mature and it has successfully reached
economies of scale. n order to compete in this industry a
manufacture must be able to achieve economies of scale. For this

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to occur, manufacturers must mass-produce the automobiles so
that they are affordable to the consumer.

Another barrier to entry is that it takes an incredible amount of
capital to
manufacture the automobiles. t takes an extreme amount of
capital not only to be able to manufacture the products but also to
keep up with the research and development that is necessary for
the innovation requirements.

Access to distribution channels is another high barrier to entry. A
company must find a dealership to sell their automobiles or have
their own dealership. Space in the dealerships lots is very limited
making it difficult to have a wider variety of inventory.

Brand dentity: Honda brand name is almost known all over the
world
and its reputation in ndia is very strong. (+)

Government Policy: The government has a very open policy in the
automobile sector with almost negligible control over the
companies (major companies) coming to ndia Hence, there
would be no control over who can come up with a new technology
and a new model in the ndian market. (-)

Learning curve: HONDA has a huge learning curve in the ndian
market
and since it has been here long enough to know its customers, it
can envisage their needs in a better way than any other new
entrant. (+)
Bargaining power of suppliers

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The bargaining power of suppliers is very low in the automobile
industry. There are so many parts that are used to produce an
automobile, that it takes many suppliers to accomplish this. When
there are many suppliers in an industry, they do not have much
power. There are so many suppliers to this
industry; manufactures can easily switch to another supplier if it is
necessary.

Bargaining power of buyers.

The bargaining power of the buyers is moderately high. The
buyers being consumers purchase almost all of the industries
output. The manufacturers depend on them to stay in business.
The buyers also are a significant portion of the industries revenue.
f they can not keep their buyers happy then there is a risk of
losing them to their competitors. The buyers have low switching
cost because if they are not happy, they can easily switch. All the
buyer has to do is sell the car they own and purchase a new one.

The reasons why the power is not completely high is that the
buyers are not large and few in number. The buyers do not have
the ability to integrate backwards into the industry. f they want a
car then they have to purchase it from a dealership.
%reat of Substitute Products

There are not many substitute products for automobiles. Some of
the substitutes are walking, riding bike or taking a train.
Substitutes products all depend on the geographic location of the

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consumer. n some cities such as New York or Chicago, a car is
not as necessary. n cities such as those, the subway is the most
effective means of transportation. However, in most places a
person must have to access to an automobile in order to get
around.

ntensity of Rivalry among Competitors

Rivalry among the competitors is very strong is this industry. The
major competitors are so closely balanced that it increases the
rivalry. n order to gain market share in the automobile market,
one must gain market share by taking it from their competitors.

One of the other reasons there is such high rivalry is that there is
a lack of differentiation opportunities. All the companies make
cars, trucks or SUV's. The competitors are compared to one
another constantly. The price, quality, durability, and many other
aspects of different manufacturers are greatly taken into
consideration when deciding what type of vehicle to purchase.
When the different manufacturers advertise they even compare
their products to their competitors. For example, the commercials
will focus on areas where the company outperforms its
competitors.
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Who buys the product?
ndividuals: People who buy it and use it for them.
Taxi Services and Rentals: They would be interested in buying a
car which provides maximum luxury and fuel efficiency at the
same time.
What is bought?
Car, convenience, comfort, luxury, peace of mind
Where do they buy?
From the company's showroom and dealers.
When do they buy?
When a genuine need arises or maybe a gift on birthday, festival
(e.g. n Diwali when they get bonus), on New Year etc.
How is it bought?

When the need arises: When they need to travel, additional car
for the family as the luxury item or as a status symbol. There is a
growing trend among the customers to posses the latest gadgets.

nformation Search: Customers will visit dealers, websites,
company's websites, refer auto magazines, peer reviews, TV
shows (CHALT KA NAAM GAAD on CNBC), Documentaries etc.
to obtain maximum information about the car and its technology.

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Evaluation: Customer will be influenced by Performance, Fuel
Economy, Luxury, Brand Name and many other factors before
coming to a decision.
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Honda has a core competency in building small petrol engines
with efficient profiles.
Apart from it the other core competencies are
The cars performance in terms of fuel efficiency
Delivery/guarantee of quality and reliability
Research and Development into the Hybrid Technology
However, what differentiates it from the other auto makers in
is the performance of its car. Thus it needs to focus on improving
the performance of its car by keeping up with the R & D work


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Strengths

Familiar brand name

New age design.

Reputation for producing high quality products.

Honda has won many awards for initial quality and customer
satisfaction

Automobiles are reliable and generally fuel efficient

Strong research and development which has afforded them
competitiveness in
quality products.

They were a pioneer in engineering low emissions internal
combustion and
hybrid technology.


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Honda is the only other manufacturer outside of Mitsubishi to
branch out into
many other areas outside of automobiles

Huge learning curve.
Weaknesses

Prices are higher for non-luxury vehicles than comparable modals
by other
manufactures.
Opportunities

To continue progressing low emission vehicles and alternative
power sources. While they have made progress in this area, the
technology is still overpriced for the consumer, and the
infrastructure does not exist.

Another area of opportunity would be developing nations like
china and ndia. These are large markets, and cheap dependable
transportation would be a hot seller.
Easy Financing
Threats

f continuous innovations are not done, then competitors will beat
you with
last year's technology.

Strict environmental Laws like EURO Norms.

Liberal Government Policies


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Till date, HSC'S strategy has been to create value through
expanded sales via
innovation in research and manufacturing. nstead of having one
large manufacturing plant, it uses an idea of "manufacturing
products where they are sold. n this way manufacture is
increased in areas where sales increase. This practice has led to
over one hundred manufacturing plants in over thirty countries, a
process they call "globalization. They also are guided by a
commitment to the future. This ideal is reflected in several ways.
Low emissions vehicles are one example, anther are
manufacturing plants that are focused on environmental
friendliness as well as efficiency and quality.
Till now the focus is on the premium segment in ndia for the time
being as it was bringing in the required volumes. They can focus
on C and D segment cars where they have a market share of
14%.
However, they should not ignore the other segment in order to
avoid threats from their competitors.
%iII date te impIementation of ideas in a pIanned manner
as eIped te

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company in achieving the progress it has achieved. The work
culture at Honda has made the implementation of ideas possible
At the concept level, T projects are discussed with department
heads, functional heads and the management; at the user level
different kinds of technical training is also carried out. The
company also invites some T companies to share their thoughts
about the benefits of T with certain users.
The result of all this is that T at Honda Siel has helped the
company cut costs and save
on manpower generation of different T projects easier.

t was Honda's policy not to offer discounts to push sales as such
a strategy
lowered the image of the product. However Honda Siel did reduce
the prices because of excise cut. Honda should follow the same
strategy of not giving any discounts but it can come up with new
lower priced models.
Since it has a great threat from Toyota which has a competitive
pricing, therefore HSC needs to produce the cars at low prices
also so as to cater other segments as well as it can come up with
the new products say with Hybrid technology cars which are few
in number in ndia. Therefore it can go for diversification where it
can cater to newer markets with new products or it can serve the
same segment with newer products like the hybrid cars.
n tandem, Honda Siel Cars ndia has decided to increase its
sales network from
the existing 55 dealerships to 100 outlets by 2008. t has
dealerships in metros and Tier cities (Ahmedabad, Jaipur,
Chandigarh, Ludhiana Surat, Kochi, etc) and will now focus on

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Tier cities (Jammu, Hubli, Jamshedpur, Jodhpur, etc) to service
a production plan to make one lakh medium sized luxury vehicles
apart from small cars. The company has set up additional regional
sales office in Mumbai and Chennai. ts existing offices in Greater
Noida and New Delhi are currently looking after the north and
east.
Toyota and Honda have taken nine and 11 years to have a chain
of 57 and 55 dealerships respectively. Analysts believe it is a
tough call though not as difficult as the initiative of Tata Motors to
scale up to 600 outlets from the existing 140 dealerships by 2008.
Honda Siel Cars ndia Ltd (Honda) is firming up marketing
plans to attain a
turnover of Rs 850 crore in fiscal 2000-01 up from Rs 700crore in
1999-00. The marketing focus for the fiscal: to expand into
secondary towns, focus on enhancing market share in the south,
maintain adequate level of media-spending, rope in consumer
finance companies with strengths in local markets, associate with
the hospitality sector for inviting prospects and build an interactive
Website.

Consolidating organized financing with consumer finance
accounting for around
65 per cent of sales, Honda is now planning to consolidate
organized financing -- at present it has tie-ups with CC and
Standard Charted. ``Halfway through the year, they may go for
regionalize-ups with players having strengths in local markets,''
says Gupta. The tie up with Standard Chartered and CC gives

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Honda an internal rate, which is less than one per cent of the
market rate (15 per cent now).
MARKETNG STRATEGY
The company can opt for penetration pricing in order to capture a
larger market share. This can be done through rapid technological
development and new innovations in which they can develop new
products which are low priced and through this it can cater to the
needs of other segments also.
PRODUCT DEVELOPMENT STRATEGY
Since Honda Siel Cars ndia is having a strong edge in Research
and development, therefore they can focus on this to come up
with newer and newer products as per the customer's
requirements.

ADVERTSNG AND PROMOTONS STRATEGY
They can use the pull strategy in order to attract more customers
through offers and lower
price models. The Brand promotions can be done through using
the distribution network.

RESEARCH AND DEVELOPMENTS
They should continue to follow the same strategy in research and
development as they are following now i.e. continuously investing
in R&D and keep coming up with new innovations and products
so as to maintain their leadership position in R&D.
OPERATONAL STRATEGY
n this they can go for modular manufacturing strategy i.e.
preassembled subassemblies. The parts of the car can be made

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and stored in different units. As per the order of the customer a
group of workers can assemble the cars at a high speed mode
and can make the car available within the short period of time.
This will enable the company to follow and enhance Just in Time
approach.

BBLOGRAPHY
1) www.hondaindia.com
2)http://world.honda.com/HondaSielCarsndia/
3) Auto Expo, Volume , July 2006
4) Strategic Management and


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suspers|or or lre lrorl. 0ver rosl surlaces ard al rosl speeds |l rard|es We||. Tre |org Wree| oase ol
lre c|ly ellorl|ess|y soa|s up lre road W|lr ease. Tre sleer|rg |s a ruge reve|al|or ard ur|||e lre p|ay
slal|or |||e lee| ol lre ear||er c|ly, lre reW rode| cores W|lr a |ol rore leedoac|. lrprov|rg C|ly's sleer|rg

Dilraj kaur
M1005374 31
Was ore ol lorda's ra|r las|s ard lre |ey reasor Wry |ls e|eclr|c sleer|rg's rolor Was upgraded lror 10
lo 0 arps lo d|a| |r rore leedoac|. Ard |l |s lre rosl lue| ell|c|erl car arorg |ls r|va|s. ll |s lre car lor
lrose Wro erjoy dr|v|rg. A83, dua| a|r oags ard E80 are slardard lealure ol lr|s car.

!7.0

lorda c|ly |s cosl||er lrar lre olrer cars |r lre sare segrerl. ll |s 1 |a|r cosl||er lrar lre olrer cars |r lre
sare segrerl. ll largels lre peop|e Wro reeds ar oulslard|rg car |r lre segrerl |r lre case ol des|gr,
corlorl, qua||ly ard |rroval|or. C|ly ras 3 var|arls lre slardard var|arl C|ly 1.5 E VT cosls aooul 8.Z
|a|rs, lre lu|| opl|or ror auloral|c rode| C|ly 1.5 3 VT cosls 9.25 |a|rs ard lre auloral|c rode| W|lr
padd|e sr|ll C|ly 1.5 3 ATcosl arourd 9.80 |a|rs. Tre pr|ces rerl|ored aoove are or-road pr|ces.

!,.0

lorda 3|e| Cars lrd|a Lld., (l3Cl) Was |rcorporaled |r 0eceroer 1995 as a jo|rl verlure oelWeer lorda
Volor Co. Lld., Japar ard 3|e| L|r|led, a 3|ddrarlr 3rr|rar 0roup corpary, W|lr a corr|lrerl lo
prov|d|rg lorda's |alesl passerger car rode|s ard lecrro|og|es lo lre lrd|ar cuslorers.
Tre lorda C|ly, |ls l|rsl oller|rg |rlroduced |r 199Z, revo|ul|or|zed lre lrd|ar passerger car rar|el ard
ras ever s|rce oeer recogr|zed as ar erg|reer|rg rarve| |r lre lrd|ar auloroo||e |rduslry. Tre success
ol C|ly as We|| as a|| |ls olrer rode|s ras |ed l3Cl lo oecore lre |ead|rg prer|ur car rarulaclurer |r
lrd|a.
Tre lola| |rveslrerl rade oy lre corpary |r lrd|a l||| dale |s Rs. 120 crores, lurlrer |rveslrerl ol R3.
1000 crore |s p|arred ard oe|rg currerl|y |rvesled lor lre cor|rg secord p|arl |r Rajaslrar. Tre corpary
ras a capac|ly ol rarulaclur|rg 100,000 cars.

Vanulaorur|n Fao|||ry

l3Cl's slale-ol-lre-arl rarulaclur|rg ur|l Was sel up |r 199Z al 0realer No|da, u.P W|lr ar |rveslrerl ol
Rs. 150 crore. Tre greer-l|e|d projecl |s spread across 150 acres ol |ard (over ,00,000 sq. r.)

Tre |r|l|a| |rsla||ed capac|ly ol lre p|arl Was 30,000 cars per arrur, Wr|cr Was lrerealler |rcreased lo
50,000 cars or a lWo-sr|ll oas|s. Tre capac|ly ras lurlrer oeer errarced lo 1,00,000 ur|ls arrua||y |r
Feoruary 2008 . Tre capac|ly expars|or Was recess|laled oy lre exce||erl perlorrarce ol a|| lre lorda
rode|s, parl|cu|ar|y lre groW|rg derard lor C|ly ZX |r lrd|a. 3evera| rod|l|cal|ors Were dore oy lre
corpary W|lr lre oojecl|ve ol oller|rg r|grer qua||ly producls lo |ls cuslorers, lasler ard qu|c|er. Tre
expars|or process a|so |rc|uded expars|or ol lre covered area |r lre p|arl, lror 1,0Z,000 sq. r. lo
1,31,Z91 sq. r.

l3Cl currerl|y produces lre A||-NeW C|ly, C|v|c ard Accord rode|s |r lrd|a ard lre prer|ur 3uv, CR-v |s
so|d as a lu||y |rporled ur|l lror Japar.


Dilraj kaur
M1005374 31
Tre corpary operales urder lre slr|rgerl slardards ol l30 9001 lor qua||ly raragererl ard l30 11001
lor erv|rorrerl raragererl.
3a|es ard 0|slr|oul|or NelWor|
lorda 3|e| Cars lrd|a ras a slrorg sa|es ard d|slr|oul|or relWor| spread across lre courlry. Tre relWor|
|rc|udes 91 lac|||l|es |r 5Z c|l|es. l3Cl dea|ersr|ps are oased or lre 33 Fac|||ly (3a|es, 3erv|ce, 3pares)
lorral, oller|rg corp|ele rarge ol serv|ces lo |ls cuslorers.
Tre C|ly |s rarulaclured W|lr Z9 |rd|ger|sal|or |eve| ard currerl|y erjoys 25 rar|el srare |r |ls
http://articles.economictimes.indiatimes.com/2011-10-
02/news/30233134_1_takashi-nagai-honda-siel-cars-india-brio
http://retailbrains.blogspot.com/

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