Automobile industry is one of the largest industries in global market.

Two-Wheeler segment is one of the most important components of the automobile sector which has been in existence in the country since1955. India is the second largest two-wheeler market in the world, it stands next to Japan and china in terms of number of twowheelers produced and sold. In India there are 7 scooters manufacturers, 9 motorcycle manufacturers and 3 mopeds manufacturers. In earlier days Two-wheeler industry had three segments one is bike and other two being Scooters and mopeds, but in present we can see mostly bikes since there is not that much of scooters and mopeds are produced nowadays, due to new technologies and innovation. Recently the biggest seller of scooters that is Bajaj Auto has stopped producing or selling scooters since there is no demand in the market for the scooters. So, we are mainly going to look at the bikes in two-wheelers industry. Bikes are also divided in to two groups automatic gear bikes and gear two-wheelers, again gear

INDUSTRY COMPARISON:
According to SIAM (Society of Indian Automobile Manufacturers), the domestic market share in2008-09 for two-wheelers industry is76.49% which is highest when compared to the category wise market share with passenger vehicles, commercial vehicles and three wheelers which has market share of 15.96, 3.95 and 3.6 respectively as shown in below: DOMESTICMARKET SHARE FOR 2008-09

Passenger Vehicles-15.96%
Commercial Vehicles-3.95%

Three wheeler-3.6%
Two wheeler-76.4%

In India major key players in two wheeler industry are Hero Honda Motors Ltd (HHML), Bajaj Auto, Yamaha and TVs motor company Ltd. In 2008-09 Hero-Honda is positioned at number one in terms of maximum number of vehicles sold in a year. Since bikes are available with gears and without gears, two strokes and four stroke and also bikes are available indifferent kind of cc (Cubic Capacity) (which implies speed of the bike in technical terms) which varies from 100cc to3 50 cc. Because there is lot of difference given to four people it attracts more segments of people, it attracts both the gender since bikes are available with gears and without gears and it attracts age group from12 to56. But in India as per driving rules license is given to the people only when they attain the age of 18. But nowadays even people aged before 12 are used to drive bike and also above the age of 56. Since lot of technologies has developed in two-wheelers like push start, maximum mileage bike, alloy wheels, disc -break etc it makes most of the people to go for the two-wheeler

companies like the TVS motor company have put an extra thrust on exports. The company exports its products to some 38 countries in the world. The company has seen a 48% increase in exports from 120 crores in 2004/2005 to 177 crores in 2005/2006. The company is keen to focus on exports as an area of growth.Not to be left behind Bajaj Auto which is also one of the largest two-wheeler manufacturers in the country exported nearly 8% of the total sale of its two-wheelers. The company is a market leader in two-wheelers in Bangladesh and Srilanka and in places like the Guatemala and Columbia it is one of the leading brands of two wheelers. hero honda which claims to be the largest two wheeler producer in the world has exported more than 92,000 bikes during 2005/2006 thus registering a growth of over 45% from the previous fiscal. The company has exported bikes to Bangladesh, Sri Lanka, Bhutan and Nepal. Models like Glamour, Super splendor and CD Deluxe have become quite a rage in these countries. In fact the CD Dawn is the most popular brand of motorcycle in Columbia. The company also wants to add a scooter in it's' export portfolio to further strengthen its position in the foreign market. The export trend according to the Society of Indian automobile Manufacturers Association (SIAM) is2002-03 presented in a 2003-04 table below. 2001-02 2004-05 2005-06 motorcycles
28332 32566 53687 60699 83873

Scooters have also picked up in volumes lately thanks to the increasing popularity of ungeared scooterettes; however the metal bodied scooters are soon becoming a thing of the past.
2001-02 18971 2002-03 23391 2003-04 24078 2004-05 28585 2005-06 43181

OF MAJOR PLAYERSIN TWOWHEELER INDUSTRY:

HERO-HONDA:
Up to100cc- CD Dawn, CD-Deluxe, Splendor plus, Splendor-NXG, Passion plus. 100to 135c-Glamour, Super Splendor. More than150cc- Achiever, CBZ- extreme, Hunk and Karizma.

BAJAJ:
Up to100cc- Platina, 100to 135cc - XCD- 125 DTS Si, Discover 135, Kristal DTSi. More than 150cc- Pulsar- 150, 180,200, 220-DTSi, Avenger DTSi.

TVS MOTORS:

Population information is an important part of "Demographic Segmentation" click here to see Demographic information on the population in Toronto http://www.city.toronto.on.ca/ourcity/profile02.htm#2 Table 4: Origin of Toronto's Immigrants (1991-1996) Place of Birth GTA Toronto % in Toronto Total Recent Immigrants 446,515 315,470 71 Hong Kong 48,730 25,355 52 Sri Lanka 36,835 32,175 87 China 35,460 26,260 74 India 33,575 17,215 51 Philippines 33,560 25,780 77 Poland 19,120 11,485 60 Jamaica 17,050 12,500 73 Guyana 13,310 10,145 76 Viet Nam 12,425 10,045 81 Trinidad & Tobago 11,695 7,500 64 Iran 11,060 8,930 81 Pakistan 10,760 6,750 63 Other Countries 162,935 121,330 74 Source: Statistics Canada, 1996 Census

Demographic Segmentation" . Since Toronto is one of the most international cities in the world, it is helpful to know what countries our new Canadians come from so that services and facilities can be available to match the need. Many companies and Non-profit organizations use demographic information to be better able to provide services that are language and culture appropriate. Sometimes, certain ethnic groups under-report their true population due to fear of dealing with government officials (which may be based on experiences in the country they came from). When an ethnic group makes efforts to hide their true population this often turns out to be a disadvantage because they are then not able to get government services and language services proportionate to their need. The need is based on reported numbers which turn out to be lower than the actual real numbers. This effects many things such as providing language assistance for municipal government services, calculating employment equity for large government agencies and service providers, etc..

Criteria for Segmentation - things you have to think about in order to decide if a potential group is worthwhile being considered a "segment" 1. Homogenous - are the people in the proposed segment all similar without too many differences - you could say right handed people is a segment, but.... if half the right handed people were women, and half were men, then this might not work if the gender also was an issue. . Criteria for Segmentation 2. Heterogeneous - the people between the segments should be very different - right handed and left handed might not be worthwhile if you are talking about a market segment for a product like pull-on boots

5. Resources A company should make sure the segment relates to the resources of the company. If the company can mfg. variations to fit its key demographics, great, but it should not take on additional demographics if it does not have the capability example - a lingerie company taking on plus sizes - which would mean reconfiguring the fabric pattern cutout which would effect fabric cost, waste amounts, etc.

STRENGTHS
Highly experienced management. Product design and development capabilities. Extensive R & D focus. Widespread distribution network. High performance products across all categories. High export to domestic sales ratio. Great financial support network (For financing the automobile) High economies of scale. High economies of scope.

WEAKNESS
Still has no established brand to match Hero Honda's Splendor in commuter segment. Not a global player in spite of huge volumes. Not a globally recognizable brand (unlike the JV partner Kawasaki)

OPPORTUNITY
Double-digit growth in two-wheeler market. Untapped market above 180 cc in motorcycles. More maturity and movement towards higher-end motorcycles.

THREAT
The competition catches-up any new innovation in no time. Threat of cheap imported motorcycles from China. Margins getting squeezed from both the directions (Price as well as Cost)

The growing gearless trendy scooters

PEST ANALYSIS
A scan of external macro-environment in which the firm operates can be expressed in terms of the following factors:

POLITICAL
ECONOMICAL

SOCIAL
TECHNOLOGICAL

Political analysis: Tax policy, Employment laws, Environmental regulations, Trade Restriction and Tariffs, Political stability etc constitute political analysis. The government in 2001-02 had lowered the excise duty on twowheelers (with engine capacity in excess of 75 cc) from 24% to 16%.The government in 2005 provides for a weighted deduction of 150% for investments in R&D. Automatic approval is proposed to be granted to foreign equity investment up to 100% for manufacture of automobiles and components. The weighted average tax deduction under the Income Tax Act, 1961 for automotive companies is proposed to be increased from current level of 125% (The weighted average deduction for R&D was increased to 150% in the Union Budget 2004-05). Further, the policy proposes to include vehicle manufacturers for a rebate on the applicable excise duty for every 1% of the gross turnover of the company expended during the year on R&D. The correction in excise duty on electric vehicles which will enable the manufacturers take cen-vat credit exemption of customs duty

ECONOMICAL FACTOR: Economic growth, interest rates, exchange rates, inflation rate etc constitute economic factor. Low interest rate, availability of credit and a low based effect helped two wheeler sales to grow strongly in the financial year 2010. But high inflation rate may affect this industry. The cost of steel, aluminum etc have either increased the cost of the two wheeler or reduced the margin of the producer. Abundant and low cost labour coupled with local availability of raw material like steel, aluminum and SOCIAL FACTORS: It includes health consciousness, natural rubber has placed India amongst the low cost population centers rate, age distribution, career attitudes, producing growth of two- wheelers. emphasis on safety etc. Indian population growth rate is around 1.55% in 2010.Two wheeler industry can be optimistic with this growth rate. In many cultures, motorcycles are the primary means of motorized transport. In rural India many family depends on it. India is the second largest motorcycle markets in the world next to China.

TECHNOLOGICAL FACTOR: It includes R&D activity, automation, technology incentives, and rate of technological change. Technical Aspects in Two-wheeler industry includes construction, fuel economy, electric motorcycles, dynamics and accessories. Two-wheeler construction is the engineering, manufacturing, and assembly of components and systems for two-wheelers which results in performance cost and aesthetics desired by the designers. Construction of two-wheeler includes steel, aluminum frame, telescopic forks and disc brakes.

PORTERs 5 FORCES ANALYSIS

Porters five forces Model of Competition are as follows: Rivalry among competing sellers Potential new entrants Substitute products Competitive pressures from supplier - seller relations: Bargaining power Competitive pressures from seller - buyer relations: Bargaining power.

Our recommendation to the two-wheeler industry: Nowadays designing of two-wheelers industries seems to be aiming only at youngsters; they have to aim at providing some technology which also convinces people who are aged above 40. Many of them are affected with back pain while riding low or middle cost two-wheeler and also shock-ups life is very minimum. They have to think on these technologies and give some added on facilities to their products. Sometimes there is variation between the mileages too, i.e. they promises us that their product would give 80 Km/per liter but product will result in giving lesser than that even after following their guidelines. Because of the different segments in two-wheeler industry, 100cc segment twowheelers demand falls down which has traditionally enjoyed the maximum market share. The two-wheeler industry should concentrate on reducing their bike prices because there is not that much difference of price between high-end bikes and low-end cars (e.g.: Tata Nano)