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Vinay marketing projects final 19 7

  1. 1. INTRODUCTION TO THE PROJECT The project is all about measuring the customer satisfaction in Hero Honda motors.For the past few years every company is trying to satisfy its customers. The emphasis is onways of retaining customers, then on attracting new customers. It is easy to attract newcustomers then to retain old customers. So, companies are trying to focus on this aspect ofcustomer‘s satisfaction. The sale of a product does not end with the sale transaction but it is the point atwhich the original marketing concept starts. The marketer has to sere that whether thecustomer satisfied with that particular product/service or not. The post purchase behavior isimportant for a marketer. If there is any cognitive dissonance in the minds of the customersthen that is enough to loose a customer. Keeping this in mind the companies are giving moreimportance to customer satisfaction. This project work has been done to find out whether a customer is satisfied ordissatisfied, also to measure the level of the customer satisfaction and provide this feedbackto the company. The first phase of the project involves the collection of information fromthe customers for interpreting the characteristics based on which the customer feels satisfiedor dissatisfied. This information is collected by preparing a structured questionnaire. Thequestionnaire consists of both open-ended and closed-ended questions. The questionnaire isdesigned in such a way that a customer feels convenient to answer. The collated information through the questionnaire is analyzed and presented in astatistical form. The findings are listed and suggestions to solve problems faced have beengiven in the suggestion part. INTRODUCTION TO CUSTOMER SATISFACTION Whether the buyer is satisfied after purchase depend on the offers performancein relation to the buyer expectation. In general satisfaction is a persons feelings of pleasureor disappointment resulting from comparing a products perceived performance relation tohis/her expectations. If the performance falls short of expectation, the customer isdissatisfied. If the performance matches the expectation customer is satisfied. If theperformance exceeds the expectation the customer is highly satisfied. Customer satisfaction cannot be very difficult. After all you either satisfiedwith the services you receive or you are not. If you don‘t you are not. If it is that easy, thenobtaining peoples opinion about how satisfied they are with relatively straight forwardmatter- or is it?. Customer satisfaction is a marketing tool and a definite value added benefit.It is often perceived by customers as important as the primary product or service yourorganization offers. It looks at what is involved from 3 different angles, the first is from theview of an organization wishing to understand, and measures, how satisfied its customer arewith the products and services they receive from it. The second is from the perspective of aresearch agency that has been asked to obtain feedback from customers and about theirexperiences when dealing with companies. Finally it considers the issue from theperspective of consumers who participate in surveys, including both business customers andmembers of general public 1
  2. 2. MEANING OF CUSTOMER SATISFICATION Customer satisfaction is a business term, is a measure of how products andservices supplied by a company meet or surpass customer expectation. It is seen as a keyperformance indicator within business and part of the four prospective of balancedscore card. In a competitive market place were businesses compete for customers, customersatisfaction is seen as a key differentiator and increasingly has become a key element ofbusiness strategy customer satisfaction drives successful private sector business.] High performing businesses have developed principles and strategies forachieving customer satisfaction. This paper presents a framework or set of ideas for usingcustomer satisfaction principles and strategies to improve the quality responsiveness, andpossibility of public sector privately provided services in vulnerable communities The framework suggested that resident who live in tough neighbourhoods can besupported through customer satisfaction strategies to become empowered individuals whoinformed perspectives influence decisions about what, how, when, and where services areavailable to them. Customer satisfaction is the customers response to the evaluation of the perceiveddiscrepancy between prior expectation and the actual performance of the product asperceived after its consumption.DEFINITION Cocotte, woodruff and Jenkins (1987) define customer satisfaction as"conceptualized as a feeling developed from an evaluation of the experience."HERE, the timing of satisfaction response is driving consumption. BUT there is general agreement with kotler (2003) that "customer satisfaction is apersons feeling of pleasure or disappointment resulting from comparing a productsperceived performance in relation to his or her expectation." In short customer satisfaction is "The provision of goods or services which fulfil thecustomer expectation in terms of quality and service, in relation to price paid." 2
  3. 3. IMPORTANCE OF CUSTOMER SATISFACTION IT costs at least 7 times more to source a new customer than it does to retain existingone A satisfied customer tells 5-7 people in a year whilst a dissatisfied customer will tell14-15 people. Companies can boost profits anywhere from 25% to 125% by retaining a mere 5%more of their exciting customers. Totally satisfied customers were 6 times more likely to use that services andcommend it than satisfied customers. Customers who have a bad experience with you and do not complain are only37% likely to still do business with you. Customers who have an opportunity to complain and the complaint is achieved are95% likely to still do business with you.FACTORS OF CUSTOMER SATISFACTION 1. Service of quality 2. reliability of service 3. knowledge of the staff 4. Being kept informed of progress 5. The way service kept its promises 6. The way the service handled any problem Friendliness of staff 7. How sympathetic staff were to your needs 8. Speed of enquiries 9. Number of time had to contact the service. 3
  4. 4. CHAPTER-1 INTRODUCTION Planning for the future to achieve the long-term objective is integral to the survivaland growth of every business. Strategic planning today has to take into cognizance the rapidchanges in technology, increased competitiveness and the turbulent business environment,also with the world becoming one big global village. Strategy covers every aspect of business from business reengineering, new businessdevelopment, product development and brand positioning to advertisements promotionalcampaigns, media and publicity. It is a game of innovation. In fact, marketing people are involved in marketing 10 types of entities; goods,services, experience, events, persons, places, properties, organizations, information andideas. Marketing management is the art and science of choosing target markets and getting,keeping and growing customers through creating, delivering and communicating superiorcustomer value. India is second largest manufacturer and producer of two-wheelers in the world. Itstands next to Japan and China in terms of the number of two wheelers produced anddomestic sales respectively. Indian two-wheelers industry made small beginning in early 50‘s when Automobileproducts of India (API) started manufacturing scooter in India. Hero Honda was establishedon 13th of April 1984. The Indian two wheelers Industry can be broadly classified asscooter, motorcycles and mopeds/scooters. In last six years domestic two-wheelers hasseen structural charges. This can be seen from the change in composition of two wheelersales, where the motorcycles have gained market share from the scooter and moped orscooters segments. 4
  5. 5. The Hero group of companies in India merged with the Honda Motor Company ofJapan in creating a No.1 mantle in the making of the company Hero Honda. Hero Hondabegan operations with the establishment of the Dharuhera plant in 1985. This fullyautomated plant is equipped with state-of-the-art machinery, in-house R&D set up, andtoday it produces a bike every 30 seconds. To meet the growing demand, Hero Hondaopened another unit at Gurgaon, using FMS technology. It is rated as one of the mostmodern motorcycle manufacturing plants in the world. The plant produces 1,800 bikesevery day. The Indo-Japanese motorcycles segment dominated by Hero group, Bajaj andEscorts in collaboration with Japanese vehicle manufacturers Honda, Kawasaki and Yamaharespectively. The primary reason for growth of two-wheelers market is attributed to the fact thatIndians, especially in the rural and semi urban areas retrying to change life style and peoplein metropolitan cities are completely disappointed with the public transportation. So, there is tremendous growth in the two-wheeler segment. Two wheeler segmentsof automobiles started with bicycles and diversified into scooters and as the man startedlooking for style, comfort, speed, power etc. Motor Cycles came into the picture. Themotorcycle market in the present world like any other market place is a crowded one, withmany sellers competing with each other to attract the same customer. Hero Honda, the world‘s number .1 bikes have started in early 80‘s. The brandimage, quality maintenance, mileage and the style of the vehicle attracted a large number ofcustomers and thus made it as the No.1 bike. The consumer is now faced with proliferation of brand models. Getting newcustomers as well as retaining them is an important task of manufacturers. So service aftersales is very important. A satisfied customer brings in more name and goodwill to thecompany, which is why customer satisfaction is given more importance in today‘scompetitive world. A study on this aspect with Hero Honda two-wheelers at Hero HondaMotors Ltd was made. 5
  6. 6. NEED FOR THE STUDY Marketing starts with identifying the needs of customers and ends in satisfying thosewants. The goal of marketing is to attract new customers by promising superior value and tokeep current customers by delivering satisfaction based on their preferences retaining them. Without customer, no market exists. As the customers are regarded as the superiorsin today‘s market, the level of satisfaction and their preferences should be keenly studied. The two-wheeler industry has been expanding rapidly. Gone are the days whenpossessing a two-wheeler was seen as a luxury. Now days, it is viewed as a mere necessity. Prior, sale of two-wheelers was mainly confined to urban areas but lately in ruralareas the bicycles are being replaced by power driven two-wheelers such as scooters,motorcycles. Not only this, this industry has also customers ranging from all demographicsegments. It has been common sights that even school going children are driving two-wheelers. The women customers are also increasing due to increase in women literacy andemployment. Getting a new customer is difficult, than retaining a current customer is a moredifficult one and not only that it is estimated that the cost of attracting a new customer is fivetimes the cost of retaining current customer. It requires a great deal of effort to inducesatisfied customer to switch away from their current preference. Thus, customer satisfactionis been given top priority in today‘s competitive world. Therefore, keeping the above stated objective in mind, this study was conducted toascertain the customer‘s satisfaction towards Hero Honda two-wheelers in Hero HondaMotors Ltd. In view of this, a detailed study of customer preferences, levels of satisfactionand their complaints and suggestions was undertaken. 6
  7. 7. OBJECTIVES This study was conducted keeping the following objectives in mind.1. To study the factors which influence the purchase of Hero Honda two-wheelers?2. To know the customer level of awareness of Hero Honda two-wheelers.3. To know the various factors, which influence customers in purchasing, they‘re two - wheelers?4. To find the after sales service offered by Hero Honda Motors Ltd.5. To know the customer level of satisfaction of Hero Honda two-wheelers with respect to Hero Honda Motors Ltd.6. To find the profile of Hero Honda two-wheeler customers. 7
  8. 8. METHODOLOGY OF THE STUDY The information required for this study obtained was basically through two sources.Primary Data: Primary Data has been gathered by a survey through a structured questionnaire. The Data has been collected from 100 customers, through questionnaires, by usingsimple random sampling. In addition interaction with the staff of Hero Honda Motors Ltdhas also given some information.Secondary Data: Secondary Data comprises of information obtained from annual reports, brochures,manuals websites etc.LIMITATIONS I have observed the following limitations in the course of my study.1. The areas which were selected were limited only to Hyderabad i.e., the findings are regional and do not represent the state or country.2. Time constraints hampered the study.3. Since the study involved in gathering information was from upper to higher-middle class people, interaction with them became difficult.4. There may be respondent‘s bias.5. Even though utmost care has been taken in conducting the survey, the findings may sometimes differ from the population. 8
  9. 9. CHAPTER-2 INDUSTRY PROFILE The Indian two-wheeler contributes the largest volume amongst all the segments inautomobile industry. Though the segment can be broadly categorized into 3 sub-segmentsviz. scooters, motorcycles and mopeds; some categories introduced in the market are acombination of two or more segments e.g. scooters and step-thru. The market primarilycomprises five players in the two-wheelers segment with the most of the companies havingforeign collaboration with well-known Japanese firms earlier. But most of the companies arenow planning 100% subsidiaries in India.Two Wheeler & its role in Indian Context: As the cities grow & suburbs expand, transportation needs becoming more & moreacute, with mounting pressure on its public transportation for which two wheelers are ideal. The two-wheeler Industry today has a significant role in the Indian economy, with anannual turnover of Rs. 9000 crores and compounded average growth of 10%. In recentyears, it is of the few industrial sectors in the growth phase today considers personaltransportation as one of the basic needs. The two-wheeler industry basically comprises mopeds, scooters, scooters andmotorcycles. Mopeds are basic entry-level products aimed at lower/middle income groups,offering company. This category dominated by TVS SUZUKI, which has a market share of50% today. The other major players in this segment include KINETIC ENGG., HEROMOTORS and BAJAJ AUTO. Scooters, which found largest segment in the industry (37 percent) is dominated byBAJAJ AUTO. It is however facing stiff competition from LML, which offers better styleand technology to the Indian customers. However, dominance of this category has beendeclining because of shift in the customer preferences. Major part of the growth in the two-wheeler industry has come from motorcycleespecially, the Indo-Japanese 100cc motorcycles, which are considered fuel efficient,reliable and suited for rough roads. 9
  10. 10. Scooters also growing at a fast phase and are being increasingly perceived as abetter option providing convenience and motor style, by urban customers. In this category,TVS Scooty holds a dominant market share. With sales of over three million vehicles, India is the second largest two-wheelermarket in the world. Vehicle has become a necessity for day-to-day busy life, with theaccelerated industrial and business activity in a liberalized environment. However, giventhe limited purchasing power and to high cost of cars, majority of the middle class vehicleusers prefer two wheelers. With sales of over million vehicles, India is the second largest two-wheelers marketin the world. China is the market leader with around 51 percent of the Asia Market, India,Thailand; Indonesia & Taiwan are the other key markets for two-wheelers with market shareof 19 percent, 10 percent, 9 percent and 5 percent respectively. In the last four to five years, the two-wheeler market has witnessed a market shifttowards motorcycles at the expense of scooters. In the rural areas, consumers have come toprefer sturdier bikes to withstand the bad road conditions. In the process the share ofmotorcycle segment has grown from 48% to 58%, the share of scooters declined drasticallyfrom 33% to 25%, while that of mopeds declined by 2% from 19% to 17% during the year2000-01. The Euro emission norms effective from April 2000 led to the existing players inthe two-stroke segment to install catalytic converters. 4-stroke motorcycles are nowreplacing all the new models. Excise duty on motorcycles has been reduced from 32% to24%, resulting in price reduction, which has aided in propelling the demand for motorcycles.Fierce competition has also forced players to cut prices of certain models. Competition has intensified over the last couple of years altering the dynamics in themotorcycle segment with various companies planning to cash in on this spurt in demand bycalling off their JVs like Suzuki Motors planning to break off with TVS. Recently, HondaCorporation of Japan announced its intentions to set up a 100% subsidiary to manufacturescooters and motorcycles. Other players in the two-wheeler industry include Bajaj AutoLtd., Kinetic Motor Co.Ltd. LML and Escorts Yamaha. Low interest regime has helped inreducing cost of loans, which will help in boosting sales of 2-wheelers, since 80% of thetwo-wheelers are credit –stimulated. 10
  11. 11. The two-wheeler industry is passing through a critical but interesting phase. Formany years, it was growing continuously but the turning point came in 1996=97 when itstarted slowing down. The impact was really (MI) felt in the next year when the overallgrowth was hardly two percent. This was also possible only because the motorcycle segmentshowed a healthy growth of 15 percent. The scooter segment went down by 3 percent andmopeds by 6 percent. Another highlights are that the motorcycle sales have surpassed the scooter sales forthe first time in 1998-99. Until then, motorcycle sales were always trailing behind. The net result is that motorcycles now account for 41 percent of the two-wheelermarket, while scooters account for 36 percent. Mopeds have been able to hold their own atabout 21 percent. 11
  12. 12. GROWTH MOTORCYCLES It is therefore not surprising that every major player is trying to get into theMotorcycle market to have a piece of the cake. Hero Honda is indisputable the leader with 38 percent share followed by Bajaj with27 percent (includes M-80), TVS at 19 percent and Escorts at 13 percent. Now LML andKinetic have announced their plans to manufacture motorcycles, which are likely to come inthe market by next year. The battle is expected to be fierce but the consumer will be thegreater beneficiary. The growth in motorcycles is slowly losing its hold. It is considered a family vehiclebut perhaps there is competition from the second hand car markets where prices have fallendown rapidly. A1992 Maruti 800 is now available for just 70,000. The scooter manufactures have to watch this phenomenon and bring our many newproduct variants in the right price slots to sustain their shares in the market. The mopedmarket has been steady with an average growth of 3 percent. It is dominated by TVS whichholds 48 percent market share followed by Kinetic and Majestic Auto at 23 percent and 18percent respectively. In each segment, there is a wide gap between the first two contenders, which makestheir products positioning and marketing strategies most interesting. The two wheelersmarket seems to be maturing. There are the usual their conventional segment of scooters,mopeds and motorcycles. Two new segments are being created.NEW SEGMENTS A Step is through segment like Kinetic K4-100, Honda Street, Bajaj M-80, which isquite close to the motorcycle segment. The other segment is scooterettes or mini scooters inwhich vehicles such as Kinetic SX/Style, TVS Scooty, Hero Winner, BajaajSunny/Sprite/Saffire and LML trendy can be considered. These are vehicles under 75 cc andlargely targeted at the youth market such as college students, young boys and girls and newcouples. They get the advantage of lower excise duty at 16 percent as compared to 24percent applicable over 75 cc. The trend is towards push button start vehicles. 12
  13. 13. Among the majors in the two-wheeler industry, first quarter figure for the currentyear of some players have been encouraging. The company sold 313,303 units last month ascompared to 325,360 units in the same month last year. With this, BAL has recorded as 87percent growth in the motorcycle segment in the first quarter with sales of 130,577 units(93,631 units in the corresponding period last year) BAL estimates market share of the firstquarter-Geared scooters 75.9%, unguarded scooters- 16.5%, Step-thrus-72.3% andmotorcycle-20.5%. In the scooters segment, sales of Bajaj Sunny and Bajaj Spirit increased by 170percent to 7,876 units. First quarter sales registered an impressive 78 percent growth withsales of 19,562 (10,995 units). The overall sales grew by 9.3 percent in the quarter when thecompany sold 3.24 lakh vehicles. BAL however reported a decline in sales of scooters by 15.6 percent in the firstquarter. The company hopes to increase the share of motorcycle in its product basket from18 percent last year to 30 percent by 2003-04. Hero Honda (HHL) enjoys tremendous brand equity in the motorcycle segment. Kinetic Motors, another important player, managed to grow in 1999-2000, when thescooters segments a whole slipped by around 5 percent. TVS Suzuki, a motor two-wheelermarket, has reported a growth of 13 percent in the first quarter period and sold 2.19 lakhunits. Sales of motorcycles and scooters were up by 18 percent and that of mopeds by 8percent over the same period last year. The current year therefore promises to be a testing time for the two-wheeler industry.Industry pundits feel that an overall growth rater of 5 percent should be possible as against 9percent projected earlier. The sales volume therefore is expected to be around 3.8 million in2000-2001. 13
  14. 14. DRAMATIC CHANGES: The new products have contributed to 25 percent of the growth and helped theproducers improve their bottom line. The year 1998-99 was a year of dramatic managementchanges. Singhanias have taken overall control of LML with the withedrawal of piaggio.Another corporate history was created with Kinetic tasking over the management controlfrom its Japanese partner-Honda Motor company LTD in Kinetic Honda Motors. The coming years will see increasing competition due to the parity in products andprice. The only differentiators will be technology, quality, product range and service.Imaginative marketing will emphasize relationship building, customer satisfaction andrelationship. All is exploring new techniques such as direct marketing and institutional sales.Some of them are taking the vehicle actually to the customers doorstep. Now the customer isthe king.HISTORICAL DEVELOPMENT OF TWO WHEELER INDUSTRY India is the second largest manufacturer and producer of two-wheelers in the world.It stands next to Japan and China in terms of the number of two-wheelers produced anddomestic sales respectively. This distinction was achieved due to variety of reasons as ifrespective policy followed by the Government of India towards the passenger car industry,rising demand for personal transport, inefficiency in the public transportation system etc., In Indian two-wheeler, industry made a small beginning in the early 50s whenAutomobile Products of India (API) started manufacturing scooters in the country. Until1958, API and Enfield were the sole producers. In 1948, Bajaj Auto began trading in imported Vespa scooters and three wheelers.Finally, in 1980, it setup a shop to manufacture them in technical collaboration with Piaggioof Italy. The agreement expired in 1971. In the initial stages, API it was later overtaken by Bajaj Auto dominating the scootersegment. Although various Government and Private enterprises entered the fray for scooters,the only new player that has lasted until today is LML. 14
  15. 15. Under the regulated regime, foreign companies were not allowed to operate inIndia. It was a complete seller market with the waiting period for getting a scooter fromBajaj Auto being as high as 12 years. The motorcycles segment was no different, with only three manufacturers viaEnfield, Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and theRajdoot were two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initiallydominated the motorcycle segment. The two-wheeler market was opened to foreign competition in the mid 80‘s. And thenthe market leaders-E5corts and Enfield- were caught unaware by the onslaught of the 100 ccbikes of the four IndoJapanese joint ventures. With the availability of fuel-efficiency lowpower bikes, demand swelled resulting in Hero Honda — the only producer of four-strokebikes (100cc category), gaining a top slot. The first Japanese motorcycles were introduced in the early eighties. TYS Suzuki andHero Honda brought in the first two-stroke and four-stroke engine motorcycles respectively.These two players initially started with assembly of CKD kits, and later on progressed toindigenous manufacturing. In the 90‘s the major growth for motorcycle segment wasbrought in by Japanese motorcycles, which grew at a rate Of nearly 25% CAGR in the lastfive years. The industry had a smooth ride in the 50‘s, 60‘s and70‘s when the governmentprohibited new entries and strictly controlled capacity expansion. The industry saw a suddengrowth in the 80‘s. The industry witnessed a steady growth of 14% leading to a peak volumeof 1.9mm vehicles in 1990. The entry of Kinetic Honda in mid-eighties with a variometric scooter helped inproviding ease of use to the scooter owners. This helped in inducing youngsters and workingwomen towards buying scooters, who were earlier inclined towards moped purchases. Inline with this, the scooter segment has consistently lost its part of the market share in thetwo~whee1er market. 15
  16. 16. In 1990, the entire automobile industry saw a drastic fall in demand. Thisresulted in a decline of 15% in 1991 and 8% in1992, resulting in the production loss of0.4mn vehicles. Barring Hero Honda, all the major producers suffered from recession inFY93 and FY94. Hero Honda showed a marginal decline in 1992. The reasons for recession in the sector were the incessant rise in fuel price, highinput costs and reduced purchasing power due to significant rise in general price level andcredit crunch in consumer financing. Factors as if increased production in 1992, due to newentrants coupled with the recession in the industry resulted in either company reportinglosses or fail in profits.India is one of the very few countries manufacturing three wheelersin the world. It is the world‘s largest manufacturer and seller of three wheelers. Bajaj Autocommands a monopoly in the domestic market with a market share of above 80%; BajajTempo, Greaves Ltd and Scooters in India share the rest. The total number of registered two-wheelers and three-wheelers on road in India, ason March 1998 was 27.9nm and 1 .7nin respectively. The two-wheeler population hasalmost doubled in 1996 from a base of 12.6mn in 1990. 16
  17. 17. PENETRATION OF TWO-WHEELERS: On a base of around 28mn vehicles on Indian roads and around 175mn households,there were only 160 motorized two-wheelers per thousand households in FY98. Thiscompares poorly with countries like Thailand where it is around 600 per thousandhouseholds. Also with a household size of 5.5 persons and more than one wage earner inabout 60% of the households, the potential for a second vehicle demand is also good. The number of households in the low-income group has fallen since FY86 and hasbeen more pronounced in the post-reform period. On the other hand, the number ofhouseholds in the middle, upper middle and high-income groups that form the consumerbase for twowheelers, have increased. Their share of the total number of households hasincreased from 10.6% in FY88 to 20.5% inFY96. This rising income profile however, has,been more pronounced in the urban areas as average annual growth in industry surpassedthat of agriculture in the period FY93 to FY96. 17
  18. 18. CHAPTER-3 COMPANY PROFILE FILL IT. SHUT IT. FORGET IT When Hero Cycles and Honda Motor Company of Japan inked their joint venture inIndia in April 1984, few could have imagined that the two would go on to create history andbecome the subject of a case study at business schools, internationally. But thats the Hero Honda saga for you. In a little over two decades, the worldslargest manufacturer of bicycles and the global leader in motorcycles have created not onlythe worlds single largest motorcycle company but also the most endearing and successfuljoint venture for Honda Motor Company worldwide. The company has sold over 15 millionmotorcycles and has consistently grown at double digits since its inception and today, everysecond motorcycle sold in the country is a Hero Honda. In two decades, Hero Honda has built two world-class manufacturing facilities atDharuhera and Gurgaon in Haryana that now churn out over 3 million bikes per year. In this period, Hero Honda has set up over 2400 customer touch points, comprising amix of dealers, service centres and stockists across rural and urban India. Today, HeroHonda is an amalgam of winning networks and relationships with internal and externalstakeholders, including Investors, Dealers, Vendors and Employees. These relationshipshave helped the company hold on to the mantle of World No.1 for years in succession. What makes Hero Honda well, Hero Honda, is synergy. The two partners, leaders intheir respective domains, have been able to consistently draw on each others strengths. TheHero Groups deep domain knowledge of the Indian market and its supplier network hasmeshed with Hondas mastery over four-stroke engine technology to create modern and fuel-efficient machines at affordable prices for India s 250-300 million strong middle class. 18
  19. 19. Progressively through the 1980s, the 1990s and now in the 2000s, Hero Hondahas relied on 3 Rs-- Reach, Research and Reliability as its basic building blocks. Usingfeedback from the market, a fully-equipped R&D center has consistently created bestpractices in designing, testing and harmonization, besides placing strong emphasis on roadsafety and ride quality. This emphasis has helped Hero Honda build products that are aheadof their time. In the 1980s, for example, Hero Honda became the first company in India to provethat it was possible to drive a vehicle without polluting the roads. The company introducednew generation motorcycles that set industry benchmarks for fuel thrift and low emission. Alegendary Fill it - Shut it - Forget it campaign captured the imagination of commutersacross India , and Hero Honda sold millions of bikes purely on the commitment of increasedmileage. Hero Honda was also one of India s first automotive companies to get close to thecustomer. Over the years, feedback has flowed back and forth seamlessly through a uniqueCRM program - the Hero Honda Passport Program which now has over 2.5 millionmembers on its roster. The program has not only helped Hero Honda understand itscustomers and deliver value at different price points, but has also created a loyal communityof brand ambassadors. The best is yet to come. Hero Honda is powering its way through a market that isstill to unleash its true potential, as barely two per cent of the population has been penetratedso far! It isnt surprising that the company is in no mood to take its hand off the throttle. AsBrijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly puts it, "Wepioneered Indias motorcycle industry, and its our responsibility now to take theindustry to the next level. Well do all it takes to reach there 19
  20. 20. HERO HONDAS MISSION Hero Honda‘s mission is to strive for synergy between technology, systems andhuman resources, to produce products and services that meet the quality, performance andprice aspirations of its customers. At the same time maintain the highest standards of ethicsand social responsibilities. This mission is what drives Hero Honda to new heights in excellence and helps theorganization forge a unique and mutually beneficial relationship with all its stake holders. HERO HONDAS MANDATE Hero Honda is a world leader because of its excellent manpower, provenmanagement, extensive dealer network, efficient supply chain and world-class products withcutting edge technology from Honda Motor Company, Japan. The teamwork andcommitment are manifested in the highest level of customer satisfaction, and this goes along way towards reinforcing its leadership status. 20
  21. 21. FROM THE CHAIRMANS DESK LEADING WITH A DREAM We had a dream. The dream of making motorcycles that would touch and transformthe lives of our customers by giving them a mode of transport that was fuel-efficient,comfortable and environment friendly. One that would enhance their efficiency at work,enable them to share moments of joy with their families and add up to a better quality of life. In a scenario where the customer had a few choices, our vision was to offer thehighest quality at a reasonable price, to meet our customer‘s expectations, and to exceedthem. Behind the success of Hero Honda, is the saga of team-work. We would like toacknowledge the role played by our JV partners, Honda Motor Company, Japan, and all ourbusiness associates, shareholders and employees.In the new millennium, we stand committed to innovation, to change, to achievingbreakthroughs… to moving forward in the new century, while retaining the values that haveBeen like a beacon in this journey thus far.BrijmohanLallChairman 21
  22. 22. ABOUT THE CHAIRMAN Brijmohan Lall Munjal – Seeding a Dream Dont dream if you cant fulfill your dreams, Brijmohan Lall Munjal is often fond ofsaying. The founder and patriarch of the $ 2.8 billion Hero Group is your classic firstgeneration entrepreneur. He is a man who started small, dreamt big and used a combinationof grit and perseverance to create one of the countrys largest corporate groups and theWorlds No.1 Two Wheeler Company. Instinctive from a young age, Brijmohan Lall made a rather unusual start in life.Around the time when the freedom movement in India was taking shape in the late 1920s, hewalked into a newly opened Gurukul (Indian heritage school) near his home in Kamalia(now in Pakistan ). He was only six years old then. Thus began an extraordinary tale of courage and perseverance. Brijmohan began hisbusiness story after partition in 1947, when he and his brothers relocated to Ludhiana. Thefamily set up a company that provided poor people with basic transport (cycles). Threedecades later, as India evolved, he added a second crucial chapter - which visualizedaffordable and technologically superior transport to millions of middle class Indians. Therest is history. 22
  23. 23. Building Relationships When Brijmohan and his brothers started out, there was no concept of organizeddealer networks. Companies just produced, and most dealers functioned like traders.Brijmohan changed the rules of the business by trusting his gut instincts; introducingbusiness norms that were ahead of their time, and by investing in strategic relationships.Brijmohan built a series of bonds and networks with hundreds of family members, vendors,dealers and employees. Much like the Japanese keiretsu system, these networks are now theglue that holds the Hero Group together. "Thanks to the relationships that we have nurtured so passionately in the HeroFamily, the younger generations of some of our bicycle dealers have become dealers of HeroHonda. These relationships have survived through generations - through bad times and goodtimes, the patriarch now reminiscences.Besides bonding with his vendors and dealers, Brijmohan has been personally responsiblefor kindling a spirit of entrepreneurship amongst his employees, and today, 40 of His formeremployees are successful entrepreneurs. Staying Ahead Though not technically qualified in the conventional sense, few of hiscontemporaries have understood the dynamics of technology better than Brijmohan Lall has.He could always visualize the applicability of technology before others could. For example,in the 1980s, when all two-wheeler companies in India opted for two-stroke enginetechnology, Brijmohan preferred a four-stoke engine - a technology that dramaticallyincreased fuel efficiency and reduced maintenance costs. This technology was one of thebiggest reasons for Hero Hondas stupendous success. Time and again, Brijmohan managed to steal a march over his industry peers. Forexample, when Honda Motors of Japan was looking for a collaborator in the 1980s, the HeroGroup was not high up the pecking order initially as there were other more eligible andestablished suitors.Yet it didnt take long for the astute Japanese to realize that the Hero Group and Honda hadmuch more in common than earlier perceived; there a sharp focus on financial and rawmaterial management, and employee turnover was low. Honda officials were also amazed to 23
  24. 24. find that the Munjals were already practicing "Just-in-time-inventory" at the time (JIT).It turned out that Brijmohan Lalls aspiration to provide cheap transportation to India s poorby default ensured lean and cost-effective operations. This in turn increased vendorefficiency and led to near-zero inventories.A Corporate Citizen A frugal upbringing and a value system modeled on the famous Gurukul system -which stresses the sanctity of the teacher-pupil relationship - imbibed in Brijmohan a strongsense of social commitment and responsibility. There is a special place in his heart for Ludhiana , the city where he took roots.Today, Ludhiana is a modern, bustling city, but Brijmohan has played no mean role in itsevolution. Several schools and educational institutions in Ludhiana owe their existence tothe Munjal family. The Ludhiana Stock Exchange owes its existence to Brijmohans vision as does theLudhiana Flying Club. Hes also set up the not-for-profit Dayanand Medical College andHospital-an institute now rated as one of the best medical colleges in India , in terms ofinfrastructure, quality of staff and alumni profile. In and around Dharuhera, near the first Hero Honda plant, Brijmohan and his familyhave left their stamp of philanthropy. The Raman Kant Munjal Foundation - whichBrijmohan set up in memory of his eldest son, today runs a higher secondary school and avery modern and well-equipped 100-bed hospital at Dharuhera. The group has also adoptednumerous villages and provides education, vocational training, drinking water, roads,streetlights and sewerage. 24
  25. 25. PROMINENT AWARDS AND ACCOLADES TO THE CHAIRMANYear Awards & Recognitions2010 Rated as Top Indian Company in Automobile - Two Wheelers sector by Dun & Bradstreet - Rolta Corporate Awards 2009 Most Preferred Brand of Two-Wheelers" award at the CNBC Awaaz Consumer Awards. Adjudged at top of the two-wheeler category in the Brand Equity Most Trusted Brands 2010 Survey Ranked No. 3 Most Trusted Brand across categories amongst Young Adult Males Company of the Year awarded by Economic Times Awards for Corporate Excellence 2008-09. CNBC TV18 Overdrive Awards 2010 Hall of Fame to Splendor NDTV Profit Car & Bike Awards 2010 Two-wheeler Manufacturer of the Year .CnB Viewers Choice Two-wheeler of the Year (Karizma ZMR) Bike Maker of the Year by ET-ZigWheels Car & Bike of the Year Awards 20092009 Two-wheeler Manufacturer of the Year by NDTV Profit Car & Bike Awards 2009 and Passion Pro adjudged as CNB Viewers Choice two-wheeler Top Indian Company under the Automobile - Two-wheelers sector bythe Dun & Bradstreet- Rolta Corporate Awards Won Gold in the Readers Digest Trusted Brand 2009 in the Motorcycles category NDTV Profit Business Leadership Awards 2009 - two-wheeler category2008 NDTV Profit Business Leadership Award 2008 - Hero Honda Wins the Coveted "NDTV Profit Business Leadership Award 2008" 25
  26. 26. TopGear Design Awards 2008 - Hunk Bike of the Year Award. NDTV Profit Car India & Bike India Awards - NDTV ―Viewers‘ Choice Award‖ to Hunk in Bike Category. IndiaTimes Mindscape and Savile Row ( A Forbes Group Venture ) Loyalty Awards – ―Customer and Brand Loyalty Award‖ in Automobile (two-wheeler) sector IndiaTimes Mindscape and Savile Row ( A Forbes Group Venture ) Loyalty Awards – ―Customer and Brand Loyalty Award‖ in Automobile (two-wheeler) sector Asian Retail Congress Award for Retail Excellence (Strategies and Solutions Of business innovation and transformation) - Best Customer Loyalty Program in Automobile category NDTV Profit Car India & Bike India Awards - Bike Manufacturer of the year Overdrive Magazine - Bike Manufacturer of the year TNS Voice of the Customer Awards: No.1 executive motorcycle Splendor NXG  No.1 standard motorcycle CD Deluxe  No. premium motorcycle CBZ Xtreme2007 The NDTV Profit Car India & Bike India Awards 2007 in the following category: o Overall "Bike of the Year" - CBZ X-treme o "Bike of the Year" - CBZ X-treme (up to 150 cc category) "Bike Technology of the Year" - Glamout PGM FI "Auto Tech of the Year" - Glamout PGM FI by Overdrive Magazine. "Bike of the Year" - CBZ X-treme by Overdrive Magazine. Ranked CBZ X-treme "Bike of the Year" - by B S Motoring Magazine “Most Trusted Company” , by TNS Voice of the Customer Awards 2006. CD Deluxe rated as "No 1 standard motorcycle" by TNS Voice of the Customer Awards 20062006 Adjudged 7th Top Indian Company by Wallstreet Journal Asia (Top Indian Two Wheeler Company). 26
  27. 27. One of the 8 Indian companies to enter the Forbes top 200 list of world’s Most reputed companies. No. 1 in automobile industry by TNS Corporate Social ResponsibilityAward.Best in its class awards for each category by TNS Total Customer SatisfactionAwards 2006:  Splendor Plus (Executive)  CD Deluxe (Entry)  Pleasure (Gearless Scooters)Splendor & Passion - Top two models in two wheeler category by ETBrand Equity Survey 2006.Adjudged 7th Top Indian Company by Wallstreet Journal Asia (TopIndian Two Wheeler Company).Top Indian company in the Automobile - Two Wheeler sector by Dun & Bradstreet –American Express Corporate Awards 2006. Hero Honda Splendor rated as Indias most preferred two-wheeler brand at the Awaaz Consumer Awards 2006.Certificate of Export Excellence for outstanding export performance during2003-04 for two-wheeler & three- wheelers - Complete (Non SSI) byEngineering Export Promotion Council. 27
  28. 28. The NDTV Profit Car India & Bike India Awards 2006 in the following  Bike Maker of the Year  Bike of the Year - Achiever  Bike of the Year - Achiever (up to 150 cc category)  Bike of the Year - Glamour (up to 125 cc category)  NDTV Viewers Choice Award to Glamour in the bike category2005 Awaaz Consumer Awards 2005 - Indias most preferred two-wheeler brand by CNBC in the Automobiles category. Bike Maker of the Year Award by Overdrive Magazine ICWAI National Award for Excellence (Second) in Cost Management 2004 in the private sector category by ICWAI 10th Motilal Oswal Wealth Creator Award for as the most consistent wealth creator for the period 1991-2005.2004 Winner of the Review 200 - Asias Leading Companies Award (3rd Rank amongst the top 10 Indian companies). GVC Level 1 (Highest Rating) by CRISIL for corporate Governance. Adjudged as the Best Value Creator - Large Size Companies 2003-04 by The Outlook Money. Corporate Excellence Award 2004 by Indian Institute of Materials Management. Adjudged as the Organization with Innovative HR Practices by HT Power Jobs for HR Excellence. 28
  29. 29. ICSI National Award for Excellence in Corporate Governance 2004 by The Institute of Company Secretaries of India.2003 Winner of the Review 200 - Asia s Leading Companies Award (3rd Rank amongst the top 10 Indian companies). Most Respected Company in Automobile Sector by Business World.2002 Bike Maker of the Year by Overdrive Magazine. Winner of the Review 200 - Asia s Leading Companies Award (4th Rank amongst the top 10 Indian companies). Company of the Year of ET Awards for Corporate Excellence. Ranked 4th in Overall Best Managed Company category, ranked 3rd in Best Financial Management and Best Operational Efficiency category, Ranked 6th in Overall Best Investor Relations category, by Asiamoney. Highest Wealth Creating Company of the Year Award by the Money.2001 Bike Maker of the Year by Overdrive Magazine Winner of the Review 200 - Asia s Leading Companies Award (9th Rank amongst the top 10 Indian Companies). Winner of Three Leaves Award for showing Corporate Environment Responsibility in the Automobile Sector by Centre for Science & Environment 29
  30. 30. 1999 National Productivity Award for the Best Productivity Award in the category of Automobile & Tractor presented by Vice President of India.1995 The Analyst Award 1995 presented to Hero Honda Motors Ltd. on being ranked 9th amongst the most investor rewarding companies in India.1995 National Award for outstanding contribution to the Development of Indian Small Scale Industry (NSIC Award - Presented by President of India).1991 Economic Times-Harvard Business School Award for Corporate Performance to Hero Honda Motors Ltd BOARD OF DIRECTORS No. Name of the Directors Designation 1 Mr. Brijmohan Lall Munjal Chairman & Whole-time Director 2 Mr. Pawan Munjal Managing Director 30
  31. 31. 3 Mr. Sunil Kant Munjal Jt. Managing Director4 Mr. Suman Kant Munja Whole-time Director5 Mr. Takashi Nagai Non-executive Director6 Mr. Toshiyuki Inumal Non-executive Director7 Mr. Paul Edgerley Non-executive Director8 Mr. Pradeep Dinodia Non-executive Director9 Mr. (Retd.) V. P. Malik Non-executive & Independent Director10 Mr. Analjit Singh Non-executive & Independent Director11 Mr.Pritam Singh Non-executive & Independent Director12 Mr. M. Damodaran Non-executive & Independent Director13 Mr. Ravi Nath Non-executive & Independent Director14 Dr. Anand C. Burman Non-executive & Independent Director 31
  32. 32. CHAPTER 4 CODE OF CONDUCT FOR DIRECTORS AND SENIOR MANAGEMENT1. INTRODUCTION This Code of Conduct has been adopted by the Board of Directors of Hero HondaMotors Limited for its members and the Senior executives one level below, the Directors,including all functional heads (hereinafter referred to as "Specified employee"). There are certain clauses of the Code, which are meant for Directors only such asattending meetings of the Board and Committee thereof. The Specified employees need toignore such clauses. The principal duty of the Board of Directors, along with management, is to ensure thatthe Company is well managed in the interests of its shareholders. The Board of Directorsplays the central role in the Companys governance. It is the Companys decision-makingauthority on all matters except those reserved to shareholders or delegated to themanagement. The Board of Directors is not expected to assume an active role in the day-to-day management of the Company.I. GUIDELINES FOR CONDUCT Each director and Specified Employees seek to use due care in the performance ofhis/her duties, be loyal to the Company, act in good faith and in a manner such Director andSpecified employee reasonably believes to be not opposed to the best interests of theCompany. A Director and Specified employee should seek to also: Make reasonable efforts to attend Board and committee meetings; Dedicate time and attention to the Company; Comply with all applicable laws, regulations, confidentiality obligations and corporate policies of the Company; and be independent in judgement and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board of Directors 32
  33. 33. II. CORPORATE BUSINESS OPPORTUNITIES In carrying out their duties and responsibilities, Directors and Specified employeesshould avoid: Appropriating corporate business opportunities for themselves that are discovered through the use of Company property or information or their position as Directors and Specified employees; Using Company property or information, or their position as Director and Specified employees, for personal gain; and competing with the Company.A corporate business opportunity is an opportunity: 1. Which is in the Companys line of business or proposed expansion or diversification, 2. Which the Company is financially able to undertake and 3. Which may be of interest to the Company. A Director and Specified employee, who learns of such a corporate businessopportunity and who wishes to avail of, it should disclose such opportunity to theCompanys Board of Directors. If the Board of Directors determines that the Company doesnot have an actual or expected interest in such opportunity, then, and only then, may theDirector and Specified employee avail of it, provided that the Director and Specifiedemployee has not wrongfully utilized the Companys resources in order to acquire suchopportunity 33
  34. 34. VI.CONFLICTS OF INTEREST Each Director and Specified employee should endeavor to avoid having his or her private interests interfere with: i) the interests of the Company or ii) his or her ability to perform his or her duties and responsibilities objectively and effectively. They should avoid receiving, or permitting members of their immediate family to receive, improper personal benefits from the Company, including loans from or guarantees of obligations by the Company, except as may be provided in their employment contract. They should make a full disclosure to the entire Board of any transaction or relationship that such a Director and Specified employee reasonably expects could give rise to an actual conflict of interest with the Company and seek the Boards authorization to pursue such transactions or relationships.III. COMPANY PROPERTY In carrying out their duties and responsibilities, Directors and Specified employeesshould endeavor to ensure that management is causing the Companys assets, proprietaryinformation and resources to be used by the Company and its employees only for legitimatebusiness purposes of the Company. 34
  35. 35. IV. CONFIDENTIAL INFORMATION Director and Specified employees should maintain the confidentiality of informationentrusted to them in carrying out their duties and responsibilities, except where disclosure isapproved by the Company or legally mandated or if such information is in the publicdomain. The Companys confidential and proprietary information shall not be inappropriatelydisclosed or used for the personal gain or advantage of any Director and Specifiedemployees or anyone other than the Company. These obligations apply not only during aDirectors and Specified employees term, but thereafter as well.V. FAIR DEALING In carrying out their duties and responsibilities, Director and Specified employeesshould endeavor to deal fairly, and should promote fair dealing by the Company, itsemployees and agents, with customers, suppliers and employees. Director and Specified employees should not seek to take unfair advantage of theCompany through manipulation, concealment, abuse of privileged information,misrepresentation of material facts or any other unfair dealing.VI. COMPLIANCE WITH LAWS AND REGULATIONS In carrying out their duties and responsibilities, Directors and Specified employeesshould comply, and endeavor to ensure that the management is causing the Company tocomply, with applicable laws, rules and regulations. In addition, if any Director andSpecified employee becomes aware of any information that he or she believes constitutesevidence of a material violation of any securities or other laws, rules or regulationsapplicable to the Company or the operation of its business, by the Company, any employeeor another Director and Specified employee, then such Director and Specified employeeshould bring such information to the attention of the Chairman of the Audit Committee. 35
  36. 36. VII. INSIDER TRADING Director and Specified employees should observe all applicable laws andregulations including the Company policies and Codes as applicable to them with respect tothe purchase and sale of the Companys securities. It is the responsibility of each Director and Specified employee to become familiarwith and understand these laws, regulations, policies and codes and should seek furtherexplanations and advice concerning their interpretation, if required. Any waiver of or amendments to the Companys policies or Codes may be made onlyby the Companys Board of Directors and will be disclosed promptly as required byapplicable laws and regulations including the rules of any exchange on which theCompanys securities are listed or traded. Director and Specified employees should direct questions regarding the applicationor interpretation of these guidelines to the Company Secretary/Compliance Officer.Vlll ENCOURAGING THE REPORTING OF ILLEGAL OR UNETHICALBEHAVIOUR Director and Specified employees should endeavor to ensure that management iscausing the Company to promote ethical behavior and to encourage employees to reportevidence of illegal or unethical behaviour to appropriate Company personnel. Director and Specified employees should endeavor to ensure that the Company willnot allow retaliation against any employee who makes a good faith report about a possibleviolation of the Companys Code of Conduct. 36
  37. 37. XI. NON-COMPLIANCE Suspected violations of this Code may be reported to the Chairman of the Board orthe Chairman of the Audit Committee. All reported violations should be appropriatelyinvestigated. A Director and Specified employees charged with a violation of this Code should notparticipate in or vote on the matter in the meeting of a Committee or the Board concerninghis/her alleged violation, but may be present at a meeting of the Board or of a Committeeconvened for that purpose. Any waiver of this Director and Specified employees Code must be approved by theBoard of Directors and publicly disclosed if required by any applicable law or regulation.XII. EMPLOYEES The Director and Specified employee should respect each and every employee of theCompany, treat each of them in a fair and equitable manner; respect their privacy and not toshare/disclose their personal information without their prior consent; maintain non-discriminatory approach and refrain from harassing employees, making sexualadvancements, coercion, threat by virtue of his/her position with the Company.XIII. CUSTOMERS The Director and Specified employee should ensure to provide products andservices, which meet the desired quality and safety standards and redress the Customersgrievance genuinelyXIV. SHAREHOLDERS The Director and Specified employee should ensure to protect shareholders completerecords by avoiding false misleading or artificial entries in the Books of accounts. shouldensure to protect shareholders interest 37
  38. 38. KEY MILESTONES OF HERO HONDA PROMINENT AWARDS TO THE CHAIRMANYear Awards and Accolades2010 Business Leader by Lakshmipat Singhania - IIM, Lucknow National Leadershi Awards 2009 Pride of Nation Award by the Doon Citizens Council2006 Lifetime Achievement Award for Translating Excellence in Corporate Governance into Reality by The Institute of Company Secretaries of India2005 Indian Automotive Hall of Pride by Overdrive CNBC TV18 Commendation of Business Leadership displaying extraordinary Corporate Leadership and Entrepreneurial Spirit Padma Bhushan by Government of India Doctor of Letters (Honoris Causa) by Hemwati Nandan Bahuguna Garhwal University, Srinagar Garhwal Lifetime Achievement Award by ET Awards for Corporate Excellence2004 Life Time Achievement Award for Management by All India Management Association D. Litt. (Honoris Causa) by Banaras Hindu University Lifetime Achievement Award by Amity Business School Lifetime Achievement Award by HT Power Jobs2002 Entrepreneur of the Year Award by Business Standard Giants International Award to the Chairman in the field of Business & Industry Business Leadership Award by Madras Management Association2001 Entrepreneur of the Year Award by Ernst & Young2000 Sir Jehangir Ghandy Medal for Industrial Peace - by XLRI, Jamshedpur1998 Business Leader of the Year by Business Baron 38
  39. 39. 1997 Distinguished Entrepreneurship Award by PHD Chambers of Commerce & Industry1995 National Award for outstanding contribution to the Development of Indian Small Scale Industry (NSIC Award - Presented by President of India1994 Businessman of the Year by Business India Group of Publications1992 Honorary Membership - Indian Institution of Industrial Engineering Award 39
  40. 40. CORPORATE SOCIAL RESPONSIBILITY (CSR) Hero Honda Motors takes considerable pride in its stakeholder relationships,especially ones developed at the grassroots. The Company believes it has managed to bringan economically and socially backward region in Dharuhera, Haryana, into the nationaleconomic mainstream. An Integrated Rural Development Centre has been set up on 40 acres of land alongthe Delhi-Jaipur Highway. The Centre-complete with wide approach roads, clean water, andeducation facilities for both adults and children-now nurtures a vibrant, educated and healthycommunity. The Foundation has adopted various villages located within vicinity of the HeroHonda factory at Dharuhera for integrated rural development. This includes: Installation of deep bore hand pumps to provide clean drinking water. Constructing metalled roads and connecting these villages to the National Highway (NH -8). Renovating primary school buildings and providing hygienic water and toilet facilities. Ensuring a proper drainage system at each of these villages to prevent water-logging. Promoting non-conventional sources of energy by providing a 50 per cent subsidy on biogas plants.Other key projects taken up by the Foundation includeRaman Munjal Vidya Mandir The Raman Munjal Vidya Mandir began with three classes (up to class II) and 55students from nearby areas. It has now grown into a modern Senior Secondary, CBSEaffiliated co-educational school with over 1200 students and 61 teachers. The school has aspacious playground, an ultra-modern laboratory, a well-equipped audio visual room, anactivity room, a well-stocked library and a computer centre. 40
  41. 41. Raman Munjal Memorial Hospital Multi-specialty hospital equipped with the latest diagnostic and surgical technology.The Raman Munjal Memorial Hospital provides healthcare to the rural population in andaround Dharuhera, and also caters to accident and trauma victims driving along the Delhi-Jaipur highway.Raman Munjal Sports Complex The Raman Munjal Sports Complex has basketball courts, volleyball courts, andhockey and football grounds are used by the local villagers. In the near future, sportsacademies are planned for volley ball and basket ball, in collaboration with National SportsAuthority of IndiaVocational Training Centre In order to help local rural people, especially women, Hero Honda has set up aVocational Training Centre. So far 26 batches comprising of nearly 625 women have beentrained in tailoring, embroidery and knitting. The Company has helped women trained at thiscenter to set up a production unit to stitch uniforms for Hero Honda employees.Interestingly, most of the women are now self-employed.Adult Literacy Mission This Scheme was launched on 21st September, 1999 , covering the nearby villages ofMalpura, Kapriwas and Sidhrawali. The project started with a modest enrollment of 36adults. Hero Honda is now in the process of imparting Adult Literacy Capsules to another100 adults by getting village heads and other prominent villagers to motivate illiterateadults.Marriages of underprivileged girls Marriages are organized from time to time, particularly for girls from backwardclasses, by the Foundation by providing financial help and other support to the families. 41
  42. 42. Rural Health Care Besides setting up a modern hospital, the Foundation also regularly providesdoorstep health care services to the local community. Free health care and medical campsare now a regular feature in the Hero Groups community outreach program. KEY POLICIESAN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANY At Hero Honda, our goal is not only to sell you a bike, but also to help you everystep of the way in making your world a better place to live in. Besides its will to provide ahigh-quality service to all of its customers, Hero Honda takes a stand as a sociallyresponsible enterprise respectful of its environment and respectful of the important issues. Hero Honda has been strongly committed not only to environmental conservationprogrammes but also expresses the increasingly inseparable balance between the economicconcerns and the environmental and social issues faced by a business. A business must notgrow at the expense of mankind and mans future but rather must serve mankind."We must do something for the community from whose land we generate our wealth." A famous quote from our Worth Chairman Mr.Brijmohan Lall Munjal 42
  43. 43. Environment PolicyWe at Hero Honda are committed to demonstrate excellence in our environmentalperformance on a continual basis, as an intrinsic element of our corporate philosophy.To achieve this we commit ourselves to: Integrate environmental attributes and cleaner production in all our business processes and practices with specific consideration to substitution of hazardous chemicals, where viable and strengthen the greening of supply chain. Continue product innovations to improve environmental compatibility. Comply with all applicable environmental legislation and also controlling our environmental discharges through the principles of "alara" (as low as reasonably achievable). Institutionalise resource conservation, in particular, in the areas of oil, water, electrical energy, paints and chemicals. Enhance environmental awareness of our employees and dealers / vendors, while promoting their involvement in ensuring sound environmental management.Quality PolicyExcellence in quality is the core value of Hero Hondas philosophy.We are committed at all levels to achieve high quality in whatever we do, particularly in ourproducts and services which will meet and exceed customers growing aspirations through: Innovation in products, processes and services. Continuous improvement in our total quality management systems. Teamwork and responsibility.Safety Policy Hero Honda is committed to safety and health of its employees and other personswho may be affected by its operations. We believe that the safe work practices lead to betterbusiness performance, motivated workforce and higher productivity.We shall create a safety culture in the organization by: 43
  44. 44. Integrating safety and health matters in all our activities. Ensuring compliance with all applicable legislative requirements. Empowering employees to ensure safety in their respective work places. Promoting safety and health awareness amongst employees, suppliers and contractors.Continuous improvements in safety performance through precautions besidesparticipation and trainin SALES PERFORMANCE FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08- 09 Total 26,21,400 30,00,751 33,36,756 33,37,142 37,22,000 Sales Exports 64,015 92,666 97,341 90,571 81,193 (incl in above) 1. Hero Honda Registers 33% Growth in June 09 2. Hero Honda Sells 37,22,000 in 08-09 3. Hero Honda Registers 23% Growth in June06 4. Hero Honda Sells Over 2.50 Lakh Units in February 2006 5. Hero Honda Begins 2006 On A High Note 6. Hero Honda Motors Scales A New High In Cy ’05 7. Hero Honda Continues On The Growth Path 8. Retail Sales Escalate To An Unprecedented 4 Lakh + Units In October’05 9. Hero Honda Registers 22.3 Per Cent Growth In September ’05 10. Hero Honda’s Sales Jump 28.5 Per Cent In August 2005 11. Hero Honda Registers 12 Per Cent Growth In Sales In July 2005 12. Hero Honda Registers 13% Growth In Sales In Q1 Of 2005-06 13. Hero Honda Motorcycle Sales In May At 2,26,072 14. Hero Honda Starts The Financial Year With Over 20% Growth 44
  45. 45. HERO HONDA REGISTERS 33% GROWTH IN JUNE 09Records a growth of 21% Sales in Q1 Of 2008-09 New Delhi, Saturday, July 01, 2009: Hero Honda, the World No.1 two-wheeler company, continues to strengthen its leadership in the Indian two-wheelerindustry, registering impressive growth in sales in the first quarter of the FY 2008 -09. For the quarter ending June 2009, the company achieved cumulative sales of37,22,00 units, recording a growth of 31.29% compared to the same period last year.During the corresponding period last Financial Year, the company had recorded salesof 6,86,494 units in the first quarter ending June 2007. In June 2009, the company sold 37,22,00 units registering an impressivegrowth of 33.26% as against 2,26,073 units in June last year. During the month, Hero Honda launched Glamour FI - Indias first FuelInjection motorcycle. The new technology eliminates the need for a carburetor, offersthe most comfortable drive and the lowest emissions, in addition to a host of otherfeatures, which is now available for the first time to Indian two-wheeler riders. 45
  46. 46. Hero Honda Sells Over 37 Lakh Units In February 2009CUMULATIVE SALES JUMP 33.16 %New Delhi, Wednesday, March 01, 2009: Hero Honda, the ‗World No. 1‘ two-wheeler company for the fifth year in a row, has continued to exhibit a leader‘sperformance in the first couple of months in 2009. During the month of February 2009, the company sold 2,50,695 units, ascompared to 2,23,546 motorcycles sold during February 2007. This translates into agrowth of 12.14 per cent in sales volume.The cumulative sales of the company for the period April 2007 - February 2008 alsowitnessed a notable jump of 37,38,632 units, from 23,89,807 to 27,28,439 unitsduring the corresponding period last year. This reflects a growth of 14.16 percent. In January 2006, Hero Honda rolled out its first 100cc gearless scooter the―Pleasure‖ across India. The company also launched 22 first ever women-exclusivescooter showrooms ―Just4her‖ across the country. ―Just4her‖ is a unique conceptpioneered by Hero Honda Motors targeting the women customers. In January 2006, Hero Honda was also conferred the honor of the ―BikeMaker of the Year‖ by NDTV Profit-Bike and Car for the year 2005. Additionally its150 cc offering Achiever received the coveted ‗Bike of the Year‘ award. Achieverand Glamour also received the best bike awards for their respective categories. Themost desirable amongst these awards, the ‗NDTV Viewers‘ Choice‘ award in thebike category was also awarded to Hero Honda Glamour, truly exemplifying thecustomers‘ enduring trust and faith in the company. 46
  47. 47. Hero Honda Begins 2009 On A High NoteCUMULATIVE SALES JUMP 14 %New Delhi, Wednesday, February 01, 2009: Hero Honda, the ‗World No 1‘ two-wheeler company for the fifth consecutive year, has continued to exhibit a leader‘sperformance in the first month of the New Year. During the month of January 2006, the company sold 2,49,450 motorcycles,as compared with 2,30,280 motorcycles sold during January 2005. This translatesinto an increase of 8.3 % in sales volume.The cumulative sales of the company for the period April 2005 - January 2006 hasalso increased to 24,77,744 motorcycles, a notable jump from 21,66,261 motorcyclesduring the corresponding period last year. This reflects a growth of 14.3 %In themonth of January, Hero Honda rolled out its first scooter, the 100cc ―Pleasure‖ andlaunched 22 women-exclusive scooter showrooms ―Just4her‖ across the country. Thecities where ―Just4her‖ showrooms were launched include Lucknow, Delhi,Ahmedabad, Pune (two showrooms), Bangalore, Hyderabad, Baroda, Madgaon,Chennai (two showrooms), Chandigarh, Ludhiana, Jaipur, Nagpur, Jamshedpur,Bhubaneswar, Guwahati, Coimbatore, Cochin, Indore and Raipur. The month of January also saw Hero Honda being conferred the honour of the―Bike Maker of the Year‖ by NDTV Profit-Bike and Car for the year 2005.Additionally its 150 cc offering Achiever received the coveted ‗Bike of the Year‘award. Achiever and Glamour also received the best bike awards for their respectivecategories. The most desirable amongst these awards, the ‗NDTV Viewers Choice‘award in the bike category was also awarded to Hero Honda Glamour, trulyexemplifying the customers‘ enduring trust and faith in the company. 47
  48. 48. CLOSES THE YEAR WITH SALES OF OVER 33 LAC BIKES New Delhi, Monday, January 02, 2009: Hero Honda, the ‗World No. 1‘two-wheeler company, set precedence in the industry by registering an unparalleledgrowth throughout the calendar year (CY) 2008. In the year that logged animpressive growth in the two-wheeler sector, Hero Honda continued to exceedexpectations by selling a staggering 37,22,000 motorcycles during the calendar year2008. This converts to a growth of 28.3 per cent over CY ‘07 where the companysold 25,28,699 bikes. Mr. Pawan Munjal, Managing Director, Hero Honda Motors Ltd., thankedcustomers for the company‘s continuous brilliant performance. He said ―This yearhas been exciting for us where we crossed significant milestones. We fulfilled ourcommitment to the customers by providing the latest and global standard products.We launched several new products this calendar year. It is to the complete credit ofour customers who have shown continued faith in us and our products that we haveachieved the World No. 1 two-wheeler company year after year." During CY ‘09, the company continued its consistent growth in salesperformance. In December 2009, the company sold a total of 37,22,000 motorcyclesas compared with 33,37,142 bikes during the same month last year which means anincrease of 6.2 per cent. With this, the cumulative tally for the period April-December 2005 stands at 33,37,142 bikes, clocking a growth of 15.2 percent overthe year 2004. The company sold 19,35,981 motorcycles during the same period lastyear. The calendar year 2008 also saw a slew of new launches in various segmentsby the company. One of the biggest milestones was the launch of ‗Pleasure‘- the firstscooter by Hero Honda. ‗Pleasure‘ which is slated to hit the roads in January is 48
  49. 49. targeted primarily at women. Having established its leadership in the industry, HeroHonda further consolidated its position by launching three new motorcycles - ‗SuperSplendour‘, ‗Glamour‘ and ‗Achiever‘. The year also witnessed one of the highest civilian honours, the PadmaBibhushan being awarded to Mr. Brijmohan Lall, Chairman, Hero Honda Motors, forhis invaluable contribution to trade, industry and philanthropist activities. Mr.Brijmohan Lall is a first generation entrepreneur who through sheer hard work andperseverance has made his mark on the global business environment. During the yearMr. Brijmohan Lall was also honoured with a Lifetime Achievement Award by theEconomic TimesHero Honda Continues On The Growth Path CUMULATIVE SALES FOR THEPERIOD APR-NOV ’05 GROWS BY OVER 14 PER CENT New Delhi, Thursday, December 01, 2008: Hero Honda, the ‗World No. 1‘ two-wheeler company, is continuing to ride high on its steady sales performance month aftermonth. During November 2008, the company recorded a sales volume of 30,00,00,0motorcycles as compared with 37,22,000 motorcycles sold during the same month lastyear. This translates into an increase of 6.5 per cent. The cumulative sales of the company for the period April-November 2008 has alsojumped by 14.7 per cent, increasing from 17,05,230 motorcycles sold during April–November 2007 to 19,56,416 motorcycles sold during the same period in 2008. The month of November also witnessed the 5th Hero Honda Indian TelevisionAcademy Awards, the first and only television awards in the country. 49
  50. 50. Retail Sales Escalate To An Unprecedented 4 Lakh + Units InDESPATCH CROSSES THE 3-LAKH LANDMARK New Delhi, Monday, October 31, 2008: Hero Honda, the ‗World No.1‘ twowheeler manufacturer, has set yet another precedent for the Indian two-wheeler industry byrecording incredible sales in October 2005. The company‘s retail sales crossed the 4-lakhmilestone, for the first time ever in the Indian two-wheeler industry. Additionally, dispatch during the month also reached an unprecedented high of3,02,000 units, marking a remarkable jump of 23.02% as compared with the correspondingmonth in 2004. The company had recorded dispatch of 2,45,475 units in October 2004. Hero Honda‘s achievement of the landmark 4 lakh plus retail sales and 3 lakh plusdispatch, within a single month, is an extraordinary feat considering the growingcompetition in the two-wheeler market and is certain to redefine industry standards. The company‘s sales performance during October 2005 is a testimony to the successof its customer centric business philosophy. Month over month, the company has beenrecording increasing sales, also signifying the success of its new models launched in thecurrent year. The company‘s sales (dispatch) during the month is up by 13.5%, as compared withthe previous month (September 2005), when the company had recorded sales of 2,66,071units. With the first festive month ending, Hero Honda‘s cumulative sales (dispatch) for theperiod April-October 2005 has also registered a significant growth of 17.87% over thecorresponding period in the previous year. The company‘s cumulative sales tally has therebyincreased to 17,31,992 units, a jump from 14,69,394 units in 2004. With the recent launch of Achiever in end-October and the forthcoming launch ofPleasure in mid-November, the company is confident of continuing its upward movement onthe sales chart. The company‘s festive promotion, which offers Rs.1001/- off on each of its models,has also met with huge success, across the country. 50
  51. 51. Hero Honda Registers 22.3 Per Cent Growth In September ’08CLOSES HALF YEAR WITH IMPRESSIVE NUMBERS New Delhi, Saturday, October 01, 2008: Hero Honda, the ‗World No.1‘ two-wheeler company, for the fourth consecutive year, continued its upswing during the monthof September 2008. The September sales of Hero Honda mark an impressive growth of 22.3 per centover last year. The company sold 2,66,071 bikes in September 2005 as against 2,17,507bikes in the corresponding month during the previous year. Sales during the month have alsojumped by 9.6 per cent over the previous month (August 2005), when the company sold2,46,304 motorcycles. The cumulative sales of the company for the period April - September 2005 havealso shown a growth of 16.84 per cent over the corresponding period last year. Thecumulative sales during the period have increased to 14,29,992 motorcycles from 12,23,919motorcycles during April-September 2004.Hero Hondas Sales Jump 28.5 Per Cent In August 2008PHASED LAUNCH OF GLAMOUR COMPLETED; OVER 45,000 UNITS SOLDALREADY New Delhi, Thursday, September 01, 2008: Hero Honda Motors Ltd., the‗World No.1‘ two-wheeler company for the fourth consecutive year, is continuing with itsrobust performance month after month. The company‘s emphasis on proactiveunderstanding and satisfaction of customer needs and desires along with new productofferings has resulted in the company consolidating its leadership in the industry. The company sold a total of 33,37,142 motorcycles during August 2008, therebyregistering an impressive growth of 28.5 per cent in sales over the corresponding month lastyear. The company had sold a total of 1,91,635 motorcycles in August 2007. At the end of August 2008, the cumulative sales of the company for the period April- August 2007 stood at 11,63,921 motorcycles, translating into a growth of 15.6 per cent.The company had sold 10,06,412 motorcycles during the corresponding period (April-August 2004) last year. 51
  52. 52. Also during the month, Hero Honda completed the phased launch of‗Glamour‘- its new offering in the 125 cc segment. The bike comes powered with thefuturistic and exemplary Quantum Core engine, which has been perfected after a series ofrefinements and offers customers an unprecedented combination of top-class fuel-efficiencyand high power. The company has already sold over 45,000 units of Glamour since its firstlaunch in South India towards the end of June, demonstrating a tremendous response fromcustomers.Hero Honda Registers 12 Per Cent Growth In Sales In July 2008CUMULATIVE SALES CROSS NINE LAKH BIKES IN FOUR MONTHS New Delhi, Monday, August 01, 2008: Hero Honda Motors Ltd., the ‗World No.1‘two-wheeler company has come to epitomize consistent performance. The company has,month on month, managed to stand up against all odds and maintained its leadership in theincreasingly competitive 2-wheeler segment. During the month of July 2008, the company sold 2,30,050 bikes, as against 2,05,654bikes in the corresponding period last year, thus registering a sales growth of 12 per cent. For the period April - July 2008, the cumulative sale of the company stood at9,17,617 units, translating into a growth of 12.6% per cent. The company had sold 8,14,777units during the corresponding period last year. The company was able to achieve this impressive growth in the face of continuingsupply constraints of components caused by the volatile labour situation prevailing in partsof the state of Haryana, where both the manufacturing plants of the company are located.The adverse situation impacted other industries in the region as well. Thanks to the initiativetaken by the Haryana government, the situation has improved and production is expected tobe back on track. Market demand for Hero Honda products remains buoyant and the companylaunched ‗Glamour‘- a new entry by the company in the premium deluxe segment, inWestern India during this month. The bike was very successfully launched in South India inthe previous month and has been very well received by the customers in that region. Withthis new product in its portfolio, the company is now looking at consolidating itsindisputable leadership in the market. 52
  53. 53. Hero Honda Registers 13% Growth In Sales In Q1 Of 2008-09New Delhi, Friday, July 01, 2008: Hero Honda, the ‗World No.1‘ two-wheeler company,continues to strengthen its leadership in the Indian two-wheeler industry, registeringimpressive growth in sales in the first quarter of 2008 – 09. For the quarter ending June 2005, the company achieved cumulative sales of6,86,494 units, recording a growth of 13 per cent. During the corresponding period lastFinancial Year, the company had recorded sales of 6,09,123 units.In June 2008, the company sold 33,37,142 bikes registering a growth of 12.5% as against30,00,751units in June last year. This impressive growth was achieved in the face of continuing supply constraints ofcomponents caused by the volatile situation prevailing in parts of the state of Haryana,where both the manufacturing plants of the company are located. The adverse situation hasimpacted other industries in the region as well. However, market demand for Hero Honda products remains buoyant and productionis expected to be back on track to meet this demand. With the steady progress of monsoon,the outcome also remains positive.Hero Honda Motorcycle Sales In May At 37,00,751New Delhi, Wednesday, June 01, 2009: Hero Honda, the ‗World No. 1‘ two-wheelercompany, sold 37,00,751units in May 2009. The impressive figure was achieved despite some supply constraints. With the hugedemand for Hero Honda bikes in the market and supplies now back to normal, sales are setto get a boost in June. During the month of May, Hero Honda also announced auditions for Hero HondaMTV Roadies- 3, a reality show that the company has been associated with for the last twoyears. This year the Hero Honda MTV Roadies journey will begin on June 12th fromJaisalmer to Leh with 13 bikers on Hero Honda Karizma, the only premium sports bike inIndia. The show aims at testing the participants‘ endurance and bringing out the real ridersin them. 53
  54. 54. RIDE SAFE THE HERO HONDA WAY At hero Honda, our goal is not only to sell you a bike, but to also help you every stepof the way in making the right decisions. Assisting you in making the right judgments on theroad, and helping you choose the right helmet and other riding equipment that can not onlyhelp save your skin but possibly your life! And as bike handling requires know-how, skill and rigorous mental conditioning, wehave put together certain safety tips and suggestions that will enhance your riding comfort.Click to view the videos. Pre - Ride Checks Riding Gear Riding Posture Riding On the Road Braking Balancing Cornering 54
  55. 55. PRE RIDE INSPECTION You should conduct pre - ride inspection before riding a two wheeler to enhancesafety and riding comfort. Clean the two-wheeler body surface regularly to maintain the surface finish. Usespecifically designed cleaning products only. Inspect your motorcycle before you start the engine. The items listed here will onlytake few minutes, and in the long run they can save time, expense, and possibly your life.Click to follow the tips as given below: 1. ENGINE OIL LEVEL 2. FUEL LEVEL 3. FRONT AND REAR BRAKES (DRUM TYPE) 4. TYRES 5. CLUTCH 6. DRIVE CHAIN 7. THROTTLE 8. LIGHTS AND HORN: Check if the headlight, tail /stop light, turn signals, indicators and horn function properly. 9. REAR VIEW MIRROR: Ensure that the rear view mirror gives a good rear view when you are sitting on the motorcycle. 10. AIR SUCTION VALVE: Make sure all tube connections are secured properly. To meet emission standards, certain models of two wheelers are provided with the air suction valve. Air suction valve supplies fresh air from air filter to the exhaust manifold to convert carbon monoxide to carbon dioxide. This reduces the CO% in the vehicle exhaust. 11. FITTING & FASTENERS: Check & tighten if necessary. 12. BATTERY 13. STEERING: Check for smooth action and maneuverability. 55
  56. 56. PUC CERTIFICATION You should get your motorcycle inspected and certified from an authorised PUCcentre to ensure that the emission performance of the vehicle in within the desired limits. For petrol engine two - wheelers the c urrent regulation requirement is as follows. Idle CO (Carbon Monoxide) % = 3.50 % (max) HC (Hydrocarbon) = 4500 ppm (max) Vehicles which do not undergo a periodic maintenance are liable to emit exhaustgases more than the permissible limit. Few important tips to maintain low emissionlevels – Clean spark plug and maintain specified gap between electrodes. Keep the air filter clean. Get the carburetor tuned at authorized Hero Honda workshop. Do not overfill the engine oil and follow the replacement schedule. Avoid use of adulterated fuel. You should get the emission level certified once in every 3 months at any of theauthorised emission checking Centres. 56
  57. 57. IMPORTANT MAINTENANCE TIPSHERO HONDA GENUINE ENGINE OIL - 4 T PLUSEngine oil is a key determinant for efficient motorcycle performance and increasedengine life. Hero Honda 4-T Plus Genuine Engine Oil is a premium quality engine oil,e ngineered to meet the lubrication requirements of Hero Honda Engines. Hero Honda4-T Plus conforms to International specifications of API SJ SAE 20 W 40 / 10 W 30 andmeets the JASO specifications. We strongly recommend that you use Hero Honda 4-Tplus to maintain optimum engine performance during extreme driving conditions. Hero Honda 4-T plus Genuine Engine Oil provides the following benefits comparedto API SF grade oil:Enhanced engine oil life.Excellent anti-wear properties to increase your motorcycle‘s engine life.Minimizes the blow by gases by sealing the clearances within engine and improves theengine‘s power.Provides excellent protection against corrosion.Has very high stability against oxidation & temperatures.Facilitates easy cold starting.Special additives in the engine oil provide better engine cleaning 57
  58. 58. Recommendation For best results from your Hero Honda two-wheeler we recommend use of HeroHonda 4T Plus Genuine Engine Oil as per the following scheduleHow to check the engine oil level? In order to check the level of the engine oil, the vehicle should be on main stand.Check the engine oil level using the dipstick. The engine oil level should be maintainedbetween the upper and the lower level marks of the dipstick. In case it is needed, top up theengine oil up to the upper level on the dipstick. Replace the engine oil if it is due for replacement 58