Hero honda - Motorcycle

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Hero honda - Motorcycle

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Hero honda - Motorcycle

  1. 1. Future Strategy forHero without Honda Hero
  2. 2. Hero Honda Motors (HHML) Worlds largest two-wheeler manufacturing company Three manufacturing facilities:  Dharuhera  Gurgaon  Hardwar Incorporated in 1984 as a joint venture (JV):  Honda Motor Company of Japan  Hero Group IndiaHero Munjal brothers brand for their flagship company Hero Cycles Ltd. Both parties owned 26% each in the JV and the technology sharing agreement is renewed every 10 years.
  3. 3. Industry: Two Wheelers: 76.23 % Society of Indian Automobile Manufacturing 2011
  4. 4. Two Wheeler market: Motorcycle leading
  5. 5. Major Players Hero Honda Bajaj Auto TVS Yamaha Total Executive class Suzuki Enfield New  Harley Davidson Economy segment Premium segment
  6. 6. SeparationReasons: R & D capability sharing by Honda Pollution norms Royalty being paid by Hero to Honda: 4-5% Honda Motors • Separate brand increasing market share Refusal of Hero Honda to merge the spare parts business with HMI
  7. 7. SWOT •Strength Opportunity •Good Quality •Exports market: •Leader 52% • Not explored yet as JV •Extensive Dealer network 550 constraint •3500 service centers •No Royalty: 4-5% •Strong marketing Weakness Threat •R&D: Dependent on Honda •Market competition: •Capacity constraint: •Honda, Bajaj 5.2million •R&D : Pollution norms •Financial weakness: Low cash as heavy dividend •No overseas market
  8. 8. Stakeholders Suppliers:  350 component suppliers  Connection with the Munjal family but supplying parts to Honda as well  Honda started looking for new supplier base Distributers:  Unique intangible resources that it has; superior brand image & reliability perception of its brand is the outcome of these intangible & tangible key assets  Key would be the close relation based on trust and long term relationships
  9. 9. Future strategies Product Branding  Splendor  Passion  Karizma Already started work with JWT marketing communications Corporate Branding  Hero Cycle: May have negative impact  Separate as subsidiary with separate brand name
  10. 10. Global Branding Marketing focus:  Major Sports events  Targeting young consumers Quality Image:  Huge investment required for image as quality producer or transfer of image International presence:  Sponsor/Participate Moto – GP
  11. 11. Build Indigenous Research & Development 3 years for capability development  In-house  Develop indigenous products  Scale up Hero Global Design Possible Technological tie-up or Acquisition  MV Augusta – Italy  Megelli motorbikes- UK
  12. 12. Global markets Huge potential  Bajaj upto 30% of sales Major markets:  African continent  South East Asia  Middle East Establish channel partners  Distribution  Marketing
  13. 13. Possible Impact on industry Market  Increased Competitiveness  Price war or Variant flooding Consumer  More options  Better quality Past experience  Bajaj + Kawasaki : Doing well (Still together for premium segment)  TVS + Suzuki: TVS prospered, Suzuki struggling
  14. 14. Thank You

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