Hero Motocorp Ltd Economics


Published on

Economics concepts related with Hero Motocorp Ltd.
Made By Milan Nayak.

Published in: Education, Business, Technology
  • Be the first to comment

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide

Hero Motocorp Ltd Economics

  3. 3. INTRODUCTION OF HERO MOTO CORP. Hero Motocorp Ltd. formerly Hero Honda, is an Indian motorcycle manufacturer based in New Delhi. Hero Honda started in 1984 as a joint venture between Hero cycle of India and Honda of japan. The company is the largest two wheeler manufacturer in India. In 2010-11 both companies are separated and Hero become HERO MOTOCORP LTD.
  4. 4. INTRODUCTION OF HERO MOTO CORP. cntd The new brand identity and logo of Hero Motocorp were developed by the British firm Wolff olins.
  5. 5. VISION & MISSION OF THE COMPANY VISSION: company's new identity, reflects its commitment towards providing world class mobility solutions with renewed focus on expanding company's footprint in the global arena.
  6. 6. Vision & Mission Continue…. MISSION: Hero Motocorp mission is to become a global enterprise fulfilling its customers' needs and aspirations for mobility, setting benchmarks in technology, styling and quality so that it converts its customers into its brand advocates. The company will provide an engaging environment for its people to perform to their true potential. It will continue its focus on value creation and enduring relationships with its partners.
  7. 7. ORGANIZATIONAL STRUCTURE DR.Brijmohan lall Munjal- Chairman. Mr. Pawan Munjal- MD & CEO Mr. Sunilkant Munjal- Joint MD Mr. Pradip Dindodiya- Non executive & independent director V.P. Malik- Non executive & independent director Mr. Sumankant Munjal- Non executive & independent director Mr. Paul Edgerley- Non executive Dr. Anand Burman- Non executive & independent director M. Damodaran- Non executive & independent director
  8. 8. MILSTONES ACHIEVED BY HERO MOTO CORP. 2011- New Licensing agreement sign between Hero and Honda and Hero Honda renamed as Hero Motocorp. 2011- Launch new version of Glamour, CBZ xtreme and Karizma. 2012- Migration of all the product to brand Hero. 2012- Strategic partnership with Erik Buell Racing(EBR) of USA 2012- Bike of the Year Award 2012 2012- Business Standard Motoring Awards, 2012 2013- Neemrana Plant Foundation Stone laid 2013- 50 Million cumulative 2 wheelers production.
  9. 9. Major Players and Competitor
  10. 10. PRINCIPLE OF ECONOMICS Hero Motocorp faces short run trade offs: Hero invests Rs 450 crore in new R&D centre Hero will invest Rs 450 crore for setting up its fourth R&D facility in the country on the outskirts of Jaipur in Rajasthan which would be operational by 2015. In place of R&D here motor crop also can invest in production, or advertisement.
  11. 11. PRINCIPLES OF ECONOMICS PEOPLE RESPONDS TO INCENTIVES: The concept of introducing CELL START BIKES which Lead to increase in the demand for Hero bikes. Most of the people like this type of bikes and they respond positively to the incentive provide by Hero Motocorp.
  12. 12. People response to incentives Hero is the India’s first company to offer a 5-year warranty on all two-wheelers. This initiative has resulted in strong customer commitment and trust, which will further strengthen our market position. 5 years or 70,000 km on motorcycles, whichever is earlier; 5 years or 50,000 km on scooters, whichever is earlier
  13. 13. PRINCIPLES OF ECONOMICS THE COST OF SOMETHING WHAT YOU GIVE UP TO GET IT To purchase any product one have to pay for that product in marketing language we called it as PRICE. To enjoy the drive of Hero’s product one have to pay for it. This concept is not applicable to customer only it also apply to Hero also. To purchase raw material to make the product the have to pay for raw material.
  14. 14. PRINCIPLES OF ECONOMICS GOVERNMENT CAN SOMETIMES IMPROVE THE MARKET CONDITION: Before 2011 there was a joint venture of Hero and Honda. They were partners since so many years and they penetrate the India’s two wheelers automobiles sector. Government gave green flag to the both the company to do business in India so that market condition will become fruitful.
  15. 15. PRINCIPLES OF ECONOMICS Free Bike Service concept: Service Schedule: ACHIEVER Type of Free Service 1st Validity in Kms from the date of purchase 5003000-3500 750 Validity in Days from the date of 60 previous service Paid Service 2nd 100 3rd 4th 5th 6th 6000-6500 9000-9500 1200012500 1500015500 100 100 100 100 Each Paid Service needs to be availed after every 3000 kms or 90 days from the previous service, whichever is earlier.
  16. 16. PRINCIPLES OF ECONOMICS TRADE CAN MAKE EVERYONE BETTEROFF: Hero Motocorp commences exports to Latin America, Africa NEW DELHI: In a bid to achieve its stated objective of exporting a million unit over the next five years, World's largest two wheeler maker, Hero MotoCorp commenced its export operations to Africa, Latin and Central America. PAWAN MUNJAL(CEO) said: Our first consignments of two-wheelers have already been shipped Peru in Latin America, Guatemala and central America. We shall also be dispatching the first lot of our twowheelers to Kenya too later this month.
  17. 17. FACTORS AFFECTING COMPANY’S PRODUCT       Rate of Inflation (7% in October 2013) Competitor’s pricing strategy Competitor’s marketing strategy Government policy Technological changes Price of complementary goods
  18. 18. Newly Launched products market The major contributor of total sales is Hero MotoCorp which accounts for around 40% market share as always. New launches from Hero MotoCorp like Passion X Pro, Ignitor are doing well as per company reports. The company is increasing scooter manufacturing capacity to 60,000 units per month from the current 54,000 units, thanks to its latest scooter Maestro. Overall Hero MotoCorp sold 5,04,271 units in February and total 10,59,068 units in the first two months of this year. Read more at
  19. 19. SALES TURNOVER YEAR SALES TURNOVER(IN CR) 2009 13,553.23 2010 16,856.43 2011 20,787.27 2012 25,252.98 2013 23,768.11 We can see that their sales turnover was continuously increasing till 2012, they were earning profit but in 2013 there sales turnover is decrease
  20. 20. MARKET SHARE    45% market share in the domestic two-wheeler market. 56% market share in the domestic motorcycle market Team Hero. Hero Good life is the industry’s largest customer relationship management program, with 10 million members.
  21. 21. SUBSTITUTE WITHIN THE COMPANY Hero Moto Corp Achiever Price Range: 59,425 to 59,425 Hero Moto Corp Glamour Price Range: 54,025 to 56,025 Hero Moto Corp Hunk Price Range: 67,725 to 70,725
  22. 22. SUBSTITUTE WITHIN THE COMPANY(CNT..) Hero Moto Corp Impulse Price Range: 70,500 to 70,500 Hero Moto Corp Passion Pro Price Range: 45,350 to 51,500 Hero Moto Corp Pleasure Price Range: 44,100 to 44,100
  23. 23. SUBSTITUTE AMONG COMPETITOR Bajaj Pulsar Price Price Range : 60,539 to 68,697 Bajaj Discover Price Price Range : 49,000 to 57,073 Honda Aviator Price Price Range : 48,621 to 53,939
  24. 24. ELASTICITY OF DEMAND As we know that inflation rate is continuously increasing in the world. In October 2013 the inflation rate in India is 7% which is very higher compare to previous years. Because of the inflation rate there is a increase in the price of the material that are required to make hero bikes and scooters. Raw material become costlier and price of the bike is also increased. Increase in the price lead to decrease in the demand for the hero bikes. Market share of Hero Splendor is decreasing and it reach to 35% of the total market share which was
  25. 25. ELASTICITY OF DEMAND(cont..) There is a drastic fluctuation in the sales of the splendor bikes. So that we can call that elasticity of splendor bike is greater than 1. Ep>1 Diagram:
  26. 26. performance During the fiscal year 2008-09, the company sold 3.7 million bikes, a growth of 12% over last year. in the same year, the company had market share of 57% in the Indian market. Hero Honda's bikes hero Honda splendor sale more than one million units per year. The company sold record 61,17,599 units of two wheelers in the period of January-December 2011,a growth of19.2% over the calendar year of 2010 when it had sold 51,34,549 two wheelers.
  29. 29. CSR ACTIVITY OF HERO RAMAN MUNJAL VIDHYA MANDIR:  Senior secondary school  1200 students, 61 teachers  Big play ground  Computer center  Library facilities  Ultra modern laboratory
  30. 30. CSR ACTIVITY OF HERO PROVIDING CYCLE TO PHYSICALLY CHALLANED PEOPLE: Hero ensure that every person is taken care of. To identify this vision, Hero supports physically challenged individuals through diverse initiatives and encourages them at every step of life.
  31. 31. KEY FINANCIAL RATIOS Particular 201103 201003 200903 200803 200703 Liquidity Ratios Debt/Equity Ratio 0.24 0.02 0.03 0.05 0.08 Current Ratio 0.40 0.57 0.50 0.56 0.57 Inventory Turnover Ratio 42.99 43.97 42.06 40.62 45.97 Fixed Assets Turnover Ratio 4.99 6.37 6.08 6.44 7.05 Debtors Turnover Ratio 172.92 129.92 60.54 38.06 46.74 Interest Coverage Ratios 153.20 1349.44 705.13 706.14 774.98 Operating Profit Margin 13.66 18.03 14.51 13.06 12.02 PAT/Total Income 9.12 13.02 9.26 7.90 7.30 NPM (Net Profit Margin) 9.33 13.30 9.46 8.04 7.43 Return on Capital Employed 60.68 76.48 50.99 49.09 51.66 Return on Networth 60.05 61.43 37.77 35.48 38.30 Turnover Ratios Profitability Ratios
  32. 32. OLIGOPOLY MARKET As we earlier show that there are not many firms in the two wheeler automobiles sector. We can call Hero Motocorp as oligopoly market.
  33. 33. BIBLIOGRAPHY http://www.heromotocorp.com/en-in/aboutus/about-us.html http://www.heromotocorp.com/en-in/riderzone/bike-services-and-maintenanceschedule.html http://www.motorbeam.com/sales-figures/february2013-bike-sales-figuresanalysis/#FqEk2dKbSa62FqxQ.99 http://money.sulekha.com/hero-honda-motors_keyfinancial-ratios