1. Hero Honda
Introduction:
The Indian two-wheeler industry is experiencing a major shift in its shape and structure.
The established players in the industry are taking a hard look at their portfolio of products
and are in the process of reshuffling them to meet the expectations of customers. The
beneficiary is of course the consumer, who has an increased array of products to choose
from.
The last four-five years have brought about a great change in the consumer preferences
for two-wheelers. The market leaders of yesteryears are being driven to maintain their
leadership position in the forthcoming years. Those who have had a great going in the last
few years are fighting hard to retain their new supremacy. The two-wheeler industry is
perhaps the most happening place in terms of new models launched, upgraded products
and innovative marketing techniques. Gone are the days of regulation when the
production of scooters and motorcycles was limited to two or three brands and the number
of products produced was decided by the Government; today the Indian two-wheeler
market is highly competitive with numerous players who offer anything and everything a
consumer demands and that too at affordable price. From a sellers market where one had
to wait for a scooter for 12 years to the days when you can just walk into any showroom
and drive out in the vehicle of your choice, the market of two-wheelers in India has come a
long way. But this is only the beginning of the transformation.
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2. Hero Honda
The Industry:
The Indian two-wheeler industry is dominated by three players, Bajaj, Hero Honda and
TVS Suzuki, who account for 80 percent of the total two-wheeler market. The other
players including Kinetic Engineering, LML and others account for the remaining 20
percent of the market. The industry can be divided into three broad segments: Scooters,
motorcycles and mopeds. In the scooters segment Bajaj is the market leader, Hero Honda
is the market leader in the motorcycles segment and in the segment of mopeds, TVS
controls the major chunk of the market.
Most Indian players in the two-wheeler industry had been into some kind of strategic
alliance, technical collaboration or joint venture with foreign players, mainly Japanese
firms. Hero-Honda, is a joint venture between the Munjal-promoted Hero Group and
Honda Motor Co. of Japan; TVS-Suzuki was an alliance with TVS and Suzuki Motors (till
September 2001); Bajaj-Kawasaki a joint venture between Bajaj Motors and Kawasaki;
and Yamaha-Escorts, a joint venture between Escorts and Yamaha Motor Corp. (till June
2001).
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3. Hero Honda
Hero Honda
The story of motorcycles in India is a good case study of how fortunes change overnight.
Motorcycles in India were hardly popular and Hero Honda was the only player, which had
carved a niche for motorcycles. Its market was small and limited while scooters ruled the
roost but today, it is one of the biggest success stories. Its established presence in the
motorcycle segment had stood it in good stead in this phase of boom in motorcycle sales.
The fact that no other player commanded the brand name which Hero Honda enjoyed in
motorcycle segment also added up to its success. In addition most other players such as
Bajaj, TVS, LML etc., took time to assimilate the change in customer preferences and
come up with models to buck the trend. Meanwhile Hero-Honda's designs were ready on
the platter. Its R&D had been able to come up with models such as CBZ, Passion etc., in
the premium segment to capture the hot demand. Riding high on the expectations of
consumers, Hero Honda has successfully crossed over the one million units mark in
motorcycle sales. Its popular model Splendor is the largest selling motorcycle in the world.
To give a boost to its youthful image the company has chosen Saurav Ganguly and Hrithik
Roshan as brand ambassadors. The company has also embarked on in-film advertising in
a forthcoming Hindi movie. In order to expand its reach to rural areas, the company has
recently launched a marketing initiative in towns with a population of less than 50,000 in
Uttar Pradesh. As a part of this initiative, it started a mobile workshop and showroom,
through which people will be able to gather knowledge about the companies' vehicles and
can also buy them. These mobile marketing efforts are focused on Splendor and Joy.
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4. Hero Honda
Executive summary
Hero Honda Motors Ltd is one of the leading companies in the two-wheeler industry. At
present, it is the market leader in the motorcycle segment with around 47% the market
share during FY 2000-01.During the year, the company posted a 41.05% yoy rise in
turnover to Rs.31,686.5mn in motorcycles which was driven by a 35.17% yoy rise in
motorcycle sales volumes. The company has emerged as one of the most successful
players, much ahead of its competitors an account of its superior and reliable product
quality complemented with excellent marketing techniques . The company has been
consistently addressing the growing demand for motorcycles and has a cumulative
customer base of over 4 million customers which is expected to reach 5mln mark with the
rural and semi-urban segment being the new class of consumers.
The Indian two wheeler contributes the largest volumes amongst all the segments in
automobile industry. Though the segment can be broadly categorized into 3 sub-segments
viz; scooters, motorcycles and mopeds ; some categories introduced in the market are a
combination of two or more segments e.g. scooterettes and step-thru's . The market
primarily comprises five players in the two-wheeler segment with most of the companies
having foreign collaborations with well-known Japanese firms earlier .But most of the
companies are now planning 100% subsidiaries in India.
In the last four to five years, the two-wheeler market has witnessed a marked shift towards
motorcycles at the expense of scooters. In the rural areas, consumers have come to
prefer sturdier bikes to withstand the bad road conditions. In the process the share of
motorcycle segment has grown from 48% to 58% , the share of scooters declined
drastically from 33% to 25% , while that of mopeds declined by 2% from 19% to 17%
during the year 2000-01. The Euro emission norms effective from April 2000 led to the
existing players in the two- stroke segment to install catalytic converters. All the new
models are now being replaced by 4-stroke motorcycles. Excise duty on motorcycles has
been reduced from 32% to 24% , 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.
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5. Hero Honda
Hero Honda has been an early-entrant in the 4 – stroke segment of the two wheeler
industry. With a right mix of product styling and pricing the company helped garner
a larger market chunk of the 4 – stroke market as compared to Bajaj Auto. A shifting
consumer preference towards motorcycles also enabled the fast growth of the
company in the last few years. Of the total motorcycle sales , HHML has a maximum of
around 36.5% market share in the Western Zone and 28.6% in the Southern Zone which
has remained more or less consistent from FY2000 levels. In the Eastern Zone Hero
Honda has a market share 12%. The company has reported a fall in sales volume to
3,29,900 units from 4,79,630 units in motorcycles for half-year ended September 2001
accompanied by decline in net sales by 29.2% to Rs10.38 mln from Rs14.67mn.
Competition has intensified over the last couple of years altering the dynamics in the
motorcycle segment with various companies planning to cash in on this spurt in demand
by calling off their JVs like Suzuki Motors planning to break- off with TVS. Recently,
Honda Corporation of Japan announced its intentions to set up a 100% subsidiary to
manufacture scooters and motorcycles. Other players in the two wheeler industry
include Bajaj Auto Ltd , Kinetic Motor Co Ltd , LML and Escorts Yamaha. Low –
interest regime has helped in reducing cost of loans , which will help in boosting sales of
2-wheelers, since 80% of the two- wheelers are credit – stimulated .
HHML, a part of the Hero group, is a reputed name in the two-wheeler sector and the
management has a rich experience in the business. HHML is a joint venture with Honda
Corporation , Japan and over the years has been the most successful Indo-Japanese
venture in two-wheelers. The company has invested in capex, in the past three years to
cater to the increasing demand. The company has been cash –rich and has been
effectively utilizing its surplus resources combined with prudent working capital
management. Hero Honda has set a target of 20% volume growth and 25% turnover
growth for the fiscal 2001-02 . The company has also set a turnover target of Rs. 200 mln
from spare parts business in fiscal 2001-02 up from Rs.145 mln in 2000-01 and the
business is expected grow faster than bike sales for the next 5 yrs . It has planned to bring
in operational efficiencies with special focus on distribution, dealerships and pricing and
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6. Hero Honda
the sucessful implementation of SAP R/3 ( ERP- Program-" Project Synergy " ) has
enabled proper planning and company wide efficiency
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7. Hero Honda
The legend of Hero Honda
What started out as a Joint Venture between Hero Group, the world's largest bicycle
manufacturers and the Honda Motor Company of Japan, has today become the World's
single largest two wheeler Company. Coming into existence on January 19, 1984, Hero
Honda Motors Limited gave India nothing less than a revolution on two-wheels, made
even more famous by the 'Fill it - Shut it - Forget it ' campaign. Driven by the trust of over 5
million customers, the Hero Honda product range today commands a market share of
48% making it a veritable giant in the industry. Add to that technological excellence, an
expansive dealer network, and reliable after sales service, and you have one of the most
customer- friendly companies.
This is proved by the company's sales over the years :
1985-86 43,000 units
1989-90 96,200 units
1998-99 5,30,600 units
1999-00 7,61,210 units
2000-01 10,29,555 units
2001-02 14,25,195 units
Customer satisfaction, a high quality product, the strength of Honda technology and the
Hero group's dynamism have helped HHML scale new frontiers and exceed limits.
In the words of Mr. Brijmohan Lall Munjal, the Chairman and Managing Director, "We will
continue to make every effort required for the development of the motorcycle industry,
through new product development, technological innovation, investment in equipment and
facilities and through and through efficient management."
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8. Hero Honda
History Of Company
1984
- The Company was Incorporated on 19th January, at New Delhi. The Company
Manufacture motor cycles upto 100 cc capacity. The Company was promoted by Hero
Cycles (P) Ltd. (HCPL).
- The Company entered into a technical-cum-financial collaboration agreement with
Honda Motor Co. Ltd., Japan (HML). As per this collaboration agreement, HML was to
furnish complete technical information and know-how and trade secrets and other relevant
data.
- Hero Honda CD-100 is the first four stroke motorcycle to be introduced in India in 100cc
range. Its most attractive features are fuel efficiency and its light weight. CD-100 will be
equipped with electronic ignition system, illuminated speedometer, 4 speed gear box,
neutral and flasher indicators, etc.
- 15 No. of equity shares subscribed for by the promoters, etc. In November, 119,99,985
No. of equity shares issued at par of which 71,99,985 shares reserved for allotment as
under:
- (i) 31,19,998 shares to Hero Cycles (P) Ltd., Hero Investments (P) Ltd., and Bahadur
Chand Investments (P) Ltd.
- (ii) 31,20,000 shares to Honda Motor Co. Ltd., Japan and
- (iii) 9,59,987 shares to friends and association of promoters. Out of the balance
48,00,000 shares, 2,40,000 shares were reserved for subscription by the employees of
the Company and 96,000 shares by business associates. The remaining 44,64,000
shares were offered at par for public subscription during November.
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9. Hero Honda
1985
- The Company embarked on its 2nd phase of expansion of increasing its installed
capacity from 1,20,000 to 1,50,000 vehicles per annum by the addition of several critical
aliminium and steel components.
1986
- 36,00,000 rights equity shares issued at par in prop. 3:10.
1987
- The Company offered 6,00,000 - 15% secured redeemable non-convertible debentures
of Rs 100 each for cash at par on rights basis in the proportion 1 debenture: 18 equity
shares.
- Another 3,00,000 - 15% debentures were allotted to retain oversubscription. The
debentures were to be redeemed at a premium of Rs 5 per debenture on the expiry of the
7th year from the date of allotment of the debentures.
- 3,75,000 rights equity shares issued at par in prop. 3:10.
1989
- The Company introduced a new model "Sleek" during July.
- 850 No. of equity shares forfeited.
1990
- The Company was planning to launch a new model motor cycle-CD 100 SS sutiable to
semi-rural conditions. In the domestic market the Company was reported to have a market
share of 46%.
- 850 forfeited shares reissued.
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10. Hero Honda
1994
- The Company proposed to expand the capacity of existing plant at Dharuhera to
2,40,000 nos. per annum. Another plant with an installed capacity of 1,50,000 nos. per
annum at Gurgaon Industrial Estate was being set up.
- The Company issued 39,79,500 bonus shares to the existing shareholders in the ratio of
1:4. The Company also issued 28,557 number of fractional coupons representing 14,250
shares against which shares shall be allotted to presenting the same for consolidation and
allotment.
- The Company's production and turnover increased to 1,83,490 motorcycles and
Rs.483.85 crores respectively due to growth in demand for two wheelers and declining
inflation.
1995
- 14,420 bonus shares issued by way of consolidation of fractional coupons. - A new
Technical Collaboration Agreement has been signed with Honda Motor Co. Ltd., Japan for
the period upto the year 2004 which includes technology related to models of higher
Engine displacement.
- The Company alloted 39,79,500 No. of Equity Shares of Rs. 10/- each as Bonus shares
on 7th February, by way of capitalisation of General Reserves.
- The Company had issued 28557 No. of Fractional Coupons representing 14.250 shares
against which the Shares shall be alloted on presenting the same for consolidation and
allotment.
1997
- Hero Honda Motors has launched its newest motorcycle, the Street, a 100 cc bike
designed for use in congested urban traffic conditions.
- Hero Honda Motors Ltd (HHML) has set up a new motorcycle plant in Gurgaon, near
Delhi for the manufacture of the Honda Super Cub 100 cc stepthro bike.
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11. Hero Honda
- Hero Honda has set up a new state-of-the-art plant, heralding a new phase of
development of motorcycle industry in India, to provide the most modern and
technologically advanced production facilities.
- Hero Motors of the Rs.1,600 crore Hero group, as part of its globalisation plan, has set
up a plant in Brazil for manufacturing hero winner scooters.
- A new step thru model `Street-100' with unique feature was launched on 24th January.
1998
- The company proposes to increase the share capital to 5 crore equity shares of Rs. 10
each, 4 lakh cumulative redeemable preference shares of Rs. 100 each and 4 lakh
cumulative convertible preference shares of Rs. 100 each with power to increase or
reduce it from time to time.
- The company further proposes to capitalise Rs. 19,96,87,500 from general reserve to
share capital through issue and allotment of bonus shares. Altogether, 1,99,68,750 fully
paid bonus shares will be allotted and distributed to members of the company holding
equity shares of the company in the proportion of one bonus share for every fully paid
equity shares of Rs.10 each.
- Motorcycles major Hero Honda is considering entry into scooters in collaboration with
partners, Honda Motors, after the Japanese company decided to walk out of Kinetic
Honda, their scooter venture with the Firodias of Pune.
- Honda Motors recently pulled out of its joint venture with the Firodias in which it held a
51 per cent equity stake.
- Honda Motor Company Ltd of Japan (Honda) and Kinetic Honda Motor Ltd (KHML) have
signed a five-year licence and technical assistance agreement under which KHML will
continue to receive the technical knowhow, critical vehicle parts and access to Honda's
markets even after the sale of Honda stake in KHML to Kinetic Engineering Ltd (KEL).
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12. Hero Honda
- The Company changed the paradigm in two-wheelers by launching the most powerful
and fast bike- CBZ with a unique feature of Transient Power Fuel Control (TPEC) system.
- 23,962,500 bonus shares issued in prop. 1:1.
1999
- Hero Honda Motors Ltd (HHML) and 20th Century Finance Corporation Ltd have signed
a Memorandum of Understanding (MoU) for financing of Hero Honda motorcycles.
- The company, a joint venture between Honda Motor Company of Japan and Hero group
of India to produce four-stroke motorcycles, also aims to increase its share by 1 per cent
to 38.6 per cent during the current fiscal.
- Leading two-wheelers manufacturer Hero Motors has formed a joint venture with Briggs
Stratton of US to develop and manufacture four-stroke engines for mopeds and scooters
in India, a top company.
- Honda Motor Company of Japan has decided to re-enter the scooter market in India as
also foray into three-wheelers in a joint initiative with its existing joint venture company
Hero Honda Motors Ltd.
2000
- Hero Honda Motors Ltd. and Tata Finance Ltd. have signed a national tie-up agreement.
The Company is the largest manufacturer of motorcycles in the country.
- The Company will relaunch its stepthru Stree Smart on Baisakhi 13th April.
- Hero Honda Motors Ltd (HHML), has launched an upgraded version of the existing step-
through motorcycle - the Hero Honda Street.
- The Company was ranked as the 9th Highest Value Creator among 12 industry groups
within the Bombay Stock Exchange top 100 companies over a five year period (1994-99).
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13. Hero Honda
2001
- Hero Honda Motors Ltd. has launched a new 100cc motorcycle named `Passion'.
- The Company has secured shareholders' approval for splitting one equity share of Rs 10
each into five equity shares of Rs 2 each in the ratio of 1:5.
- Hero Honda Motors Ltd. has become the largest seller of motorcycles amongst all Honda
companies and ventures in the world by selling one million motorcycles during the current
financial year.
- Credit rating Agency Crisil has reaffirmed outstanding `AAA' rating assigned to the
proposed Rs 15 crore non-convertible debenture issue, Rs 16 crore commercial paper
programme and fixed deposit programme of Hero Honda Motors.
- Promoter-Chairman of the country's largest motorcycle manufacturing company, Hero
Honda Ltd, Brijmohan Lall Munjal has bagged the prestigious Ernst & Young Entrepreneur
of the Year (EOY) award here on September 27.
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14. Hero Honda
Business
Hero Honda is the largest player in the motorcycle segment. Focused on contemporary
design and style, the company has a comprehensive range of bikes in its stable viz; CD-
100DX , CD-100SS , Splendor , Street Smart , Sleek , CBZ , Passion . However ‘ Street ‘
failed to evoke market fancy while sporty ‘ CBZ ‘ dropped down the popularity chart.
Hence the company continues to rely on urban – centric ‘ Splendor ‘; its primary revenue
spinner with the USP of fuel – efficiency, which accounts for over 60-70%of its sales. The
" Passion " launched in mid -Jan 2001has had a resounding success contributing to 26%
of total volumes and has not cannibalized the volumes of ‘ Splendor ‘. With the sale of
over 1mn motorcycles in 2000-01 , the company has also become the largest volume
seller among all Honda Companies and ventures in the world .
The company has now shifted its focus towards launch of new products. HHML launched
a 100cc motorcycle ‘ Joy ‘ in FY2001delivering 65 to 70 km per litre in city driving
conditions. The company hopes to achieve a sales of 8,000 to 10,000 units of Joy per
month. The company is also planning to launch motorcycles in 200cc –300 cc category
and is looking at the possibility of introducing a " luxury motorcycle " in the same category.
HHML has planned an additional capacity of 1.5mln units pa at Dharuhera plant by
investing Rs3bn ($65mn) to meet the huge and increasing demand for motorcycles.
The Honda Motor Corporation of Japan has set the annual sales target of 1.75 mln 2-
wheelers (25% of worldwide target) for 2003 in India, to be contributed to the extent of 1.5
mln by HHML and the balance by its wholly owned subsidiary Honda Motorcycles &
Scooters India Pvt. Ltd. HMSI launched ‘ Activa ‘ the 4 stroke automatic medium-sized ,
102-cc scooter in July 2001 and is looking at volumes of about 50,000 from its first
product. It also plans to launch another scooter next year are also in the offing in order to
increase the sales volumes to 1 lakh units .
The current mix of Hero Honda’s urban to rural sales is about 40:60 and is estimated to
remain at the same level in the future too.
SWOT Analysis
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15. Hero Honda
Strengths:
Technological support from Honda Motors, Japan.
The company has a deeply penetrated dealer network.
The company provides good after sales service through its well established dealer
network.
The company enjoys a huge market share and well established brands like Splendor,
CD100, CBZ, etc.
Weaknesses:
Hero Honda depends on Honda for new products and this is a big weakness considering it
from the post 2005 point of view. The reason being that the technological tie-up between
Hero Honda and Honda Motors of Japan will cease to exist.
The company doesn't have a product catering to Rs. 25,000 - Rs. 30,000 segment, and
the company might suffer on account of this as the imported motorcycles and foreign
players' motorcycles are expected to cater to this particular segment of the market. This
can result in fall in the market share of the company.
The company imports about 31% of its spares requirements. This makes the company
vulnerable to the import policies of the government. it also exposes them to the exchange
rate risk.
Opportunities:
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16. Hero Honda
The motorcycle segment is growing at the rate of 33%, which provides a great opportunity
for the company to cash on. Also it is experiencing a shift in the customer preference from
4-stroke mobikes to 2-stroke mobikes. This again provides an excellent opportunity to
Hero Honda to leverage its market share and market leadership for sustained profitability.
Threats:
The technical collaboration with Honda is valid only till 2005 and this is a serious threat as
they have been dependant on Honda for technology. Also Honda has set up its 100%
subsidiary in India which shall start producing motorcycles from 2004. This will further
increase the competition.
The company has plans to foray into the scooter segment, which can also be a major
threat for the future prospects of the company. The reason being that the consumers are
shifting from scooters to motorcycles and at this hour moving from motorcycles to scooters
doesn't sound logical.
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17. Hero Honda
Mission Statement
IN PURSUIT OF EXCELLENCE
"We, at Hero Honda, are continuously striving for synergy
between technology, systems, and human resources to provide
products and services that meet the quality, performance, and
price aspirations of our customers. While doing so, we maintain
the highest standards of ethics and societal responsibilities,
constantly innovate products and processes, and develop
teams that keep the momentum going to take the company to
excellence in the new millennium".
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18. Hero Honda
Hero Honda Policies
Some of the policies followed by Hero Honda are: -
Environment Policy :
“We at Hero Honda are committed to demonstrate excellence in our environmental
performance on a continual basis, as an intrinsic element of our corporate philosophy.
To achieve this we commit ourselves to:
x 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;
x Continue product innovations to improve environmental compatibility;
x Comply with all applicable environmental legislation and also controlling our
environmental discharges through the principles of "alara" (as low as reasonably
achievable);
x Institutionalise resource conservation, in particular, in the areas of oil, water,
electrical energy, paints and chemicals;
x Enhance environmental awareness of our employees and dealers / vendors, while
promoting their involvement in ensuring sound environmental management;
We shall communicate this policy to all our employees and would make it available to
interested parties.”
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19. Hero Honda
Quality Policy
Excellence in quality is the core value of Hero Honda's philosophy. We are
committed at all levels to achieve high quality in whatever we do, particularly in our
products and services which will meet and exceed customer's growing aspirations
through:
x Innovation in products, processes and services.
x Continuous improvement in our total quality management systems.
x Teamwork & responsibility.
The policy shall be applied equally, fairly & without exception.
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20. Hero Honda
Board of Directors
The Board of Directors of The Hero Honda Group Comprises of : -
Mr. Brijmohan Lall Munjal Chairman
Mr. Pawan Munjal Managing Director
Mr. Akio Kazausa Joint Managing Director
Mr. Kazumi Yanagida Director
Mr. Satyanand Munjal Director
Mr. Om Prakash Munjal Director
Mr. M P Wadhawan Director
Mr. S P Virmani Director
Mr. O P Gupta Director
Mr. M. Sudo Director
Mr. S Toshida Director
Mr. N N Vohara Director
Mr. Pradeep Dinodia Director
Gen. ( Retd.) V P Malik Director
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21. Hero Honda
The Hero Honda Stable:
Hero Honda company has a comprehensive range of bikes in its stable viz; CD-100, CD-
100SS , Splendor , Street Smart , Sleek , CBZ , Passion.
 CD100
Features:
The Original Fill it, Shut it, Forget it
Bike
India's first 4-Stroke bike is still India's
foremost. And the reasons for its
popularity are apparent. Economy.
Reliability. And the capability to go on
and on, year after year.
The 4-Stroke Engine : The CD100's 4-stroke engine is derived from Honda's tough
Econo series range of engines, which have proved their mettle for the last 35 years.
Worldwide.
Phenomenal Fuel Efficiency : A marvel of 4-stroke technology, ensuring complete
combustion of fuel. Giving you an unbelievable average of 80 kms/litre.
Economical & Easy to Maintain : Optimal oil utilization of 50 ml for every 1000 kms. And
separate oil circulation in the engine, instead of it being burnt with petrol. Hence, no
carbon deposits on piston rings, spark plug and silencer to worry about.
Built For Strength and Endurance : The CD100 is the only Indian bike using a T-bone
frame of high quality pressed tensile steel. Moreover, having less welded joints and fewer
stress points, it emerges unrivalled in terms of strength, durability and safety.
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22. Hero Honda
Smokeless Exhaust : CD100 is the only 100cc bike, which satisfies pollution limits and is
well within the stipulated carbon monoxide emission levels.
Nationwide Service Support : Backing the technological excellence of the CD 100 is an
extensive and well-equipped sales and service network, well spread out across the
country.
Other Thoughtful Features : An improved, easy-to-read, illuminated speedometer. With
a colour-marked 'Economy Zone' indicating cruising range. Pillion-step mounted on
chassis frame for pillion rider's comfort. Double tube rear shock absorbers for better riding
comfort. A range of exciting colours.
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23. Hero Honda
CD100SS
Features:
Tough And Rugged
Wider tyres. Higher ground clearance. A special
engine guard. This bike any way you look at it
represents toughness. And the ability to handle even
off road, dirt track conditions with ease. All this with
the economy and comfort you have always
associated Hero Honda with.
Extra Strength. Matchless Fuel Economy: Say goodbye to your commuting troubles.
And get ready to take on the toughest riding conditions, while continuing to enjoy the
legendary fuel economy. The CDlOOSS adds a new dimension of strength to Hero
Honda's world famous 4-stroke technology, the CD100 SS adds a new dimension of
strength. Special modifications have been incorporated to prepare the bike for the rough
and the tough.
Larger reinforced shock absorbers: To soak up bumps on unkind roads. To protect
your bike, and insulate you from discomfort.
Wider tyres: To grip the road, no matter in what condition. Improved cornering stability
and safety.
Heavier body weight: To ensure balance and strength. The 103 kilo dry weight makes
the ride exceptionally stable.
Engine guard: To protect your engines from the assault of sand, mud and stones.
Therefore improving performance.
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24. Hero Honda
 Splendor:
Features:
Designed to Excel
The Hero Honda Splendor is an excellent example of the term. Designed with your
comfort in mind, with a contoured low-slung seat, specially designed handle-bar and a
strong double-cradled tubular frame. This bike epitomises riding pleasure. Truly, the
limousine of Indian two Wheelers.
The 4-stroke, 100 cc driving machine from Hero Honda. A bike that will stop you right in
your tracks. Both by its look and performance. True to its Honda lineage. Consider its
newly designed engine that gives you unprecedented fuel efficiency. While still delivering
a punchy 7.5 PS. Next, feel the ergonomics of it as you cruise along. A well-cushioned
low-slung seat helps you rest and ride at the same time. Not to mention the suspension,
that works so well that probably you'll never find out what happens between the tyres and
that bumpy road. Needless to add, owning a Splendor means a lot of other things too. Like
getting all the admiring looks. Or the pride you feel in riding a bike that meets the pollution
control standards of the next decade, today.
That's Splendor, a bike that will be called a turning point in motorcycling. So check it out.
Tomorrow has arrived, in style!
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25. Hero Honda
 STREET SMART
Features of Street Smart:
City Riding Made Easy
Another example of technology coming up with brilliant
solutions to frustrating, everyday problems. The Street Smart
is the ideal city bike. With a unique 'City Clutch' and Rotary
Gears, it is specially equipped to let you handle stop-start city traffic with ease.
Presenting Hero Honda Street Smart. A bike from the world's favourite Honda Cub family.
This 4-stroke, 100cc bike from Hero Honda delivers great pick-up, with remarkable
economy. Rotary gears and Auto-clutch make it amazingly maneuverable. So you can
smile your way in and out of crowded traffic. From zipping down to the bazaar, to going on
picnics, the sheer convenience of riding makes Street Smart the smartest choice for the
entire family. Choose one today, and join the world's largest and happiest family of riders.
Stylish Front Shield: The Street Smart comes with trendy front shield, making it sturdier,
safer and smarter.
Storage Box: There's enough space in here for whatever you'll need to carry. From
Sunday shopping to office lunch.
Rotary Gears: Specially designed to take you from the fourth to neutral by simply
avoiding the third, second and the first. Perfect for today's stop-and-go traffic.
Unique 'City Clutch': A unique in-built auto-clutch. Hence, no clutch levers making gear
changing a simple foot-tapping affair.
Automatic Decompression: Easy start is yet another unique feature. One gentle nudge
and the engine comes alive. Self-start model also available, which helps reduce load on
the battery and enhances its life.
 Dawn
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26. Hero Honda
Features of dawn:
Hero Honda 'Dawn' comes with
a special Rough Road Package
Control (TPFC) system: Tough track suspension : 'Dawn' is provided with a unique
double-acting suspension that soaks up bumps on rough roads. This gives much better
riding comfort.
Double tubular frame : Its tubular double-cradle frame imparts extra stability and strength
to the bike.
Broad rear tyre: 'Dawn' has a broad rear tyre, which gives you better grip and stability on
all kind of roads. Whatever the terrain, it is always 'ready for the rough'.
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27. Hero Honda
 CBZ
Features:
Transient Power Fuel Control (TPFC) system:
For quick acceleration, providing a sudden surge
when required. A feature which is used in some of
the most advanced cars.
Tachometer and Tripmeter: Tachometer displays
the engine rotation speed. And a first time feature
the Tripmeter measures the distance traveled in a trip.
Dynamic vibration dampers: The dampers incorporated in the handlebar, ensure
that your ride is smooth and easy.
Air injection system: Injects fresh air into the exhaust port, to meet the emission
norms.
Gear Box: Equipped with five gears and a 156cc engine that generates 12.5 bhp
power. Enough to take it from 0 - 60kmph in just five seconds and touch the top
speed of 100kmph.
Unique Trapezoidal Headlight: Gives the CBZ a distinctly stylish look. Provided
with 35 watts of power these headlights help give you a clear view of the road, even
in the darkest of nights.
Zero Crank Case Evaporative Emission: An advanced pollution control feature
which is the first of its kind in India. Keeping alive the Hero Honda tradition of
environment friendly bikes.
Multi Lever Locking Seat: Provides storage space It also doubles as an anti theft
mechanism for the CDI unit, RR unit and the battery, by allowing the side covers to
be opened only after unlocking the seat.
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28. Hero Honda
Adjustable Rear-Shock absorbers: They have been provided for extra comfort,
and can be easily adjusted into five positions.
Hydraulic Vibration Dampers: The hydraulic dampers have been incorporated into
the handlebars to ensure that your ride is smooth and steady.
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29. Hero Honda
PASSION
Features of Passion:
DESIGN
x Contoured Fuel Tank
x Multi- reflector Trapezoidal Headlight and
Tail- light
x Streamlined Side Cowl
SAFETY
x Position Lamp
x Side Reflector
x Wider Wheel Base
COMFORT
x Adjustable Rear Cushion
x Wide & Comfortable Seat
x Broad Rear Tyre
x Double Cradle Tubular frame
CONVENIENCE
x Large Storage Space with Locking Facility
x Helmet Holder
x Lockable Seat
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30. Hero Honda
RURAL MARKETING- CHALLENGES AND
OPPORTUNITIES
The Indian rural market with its vast size and demand base offers great opportunities to
marketers. Two-thirds of countries consumers live in rural areas and almost half of the
national income is generated here. It is only natural that rural markets form an important
part of the total market of India. Our nation is classified in around 450 districts, and
approximately 630000 villages which can be sorted in different parameters such as
literacy levels, accessibility, income levels, penetration, distances from nearest towns, etc.
The success of a brand in the Indian rural market is as unpredictable as rain. It has always
been difficult to gauge the rural market. Many brands, which should have been successful,
have failed miserably. More often than not, people attribute rural market success to luck.
Therefore, marketers need to understand the social dynamics and attitude variations
within each village though nationally it follows a consistent pattern.
While the rural market certainly offers a big attraction to marketers, it would be naive to
think that any company can easily enter the market and walk away with sizable share.
Actually the market bristles with variety of problems. The main problems in rural marketing
are:
A Physical Distribution
A Channel Management
A Promotion and Marketing Communication
The problems of physical distribution and channel management adversely affect the
service as well as the cost aspect. The existent market structure consists of primary rural
market and retail sales outlet. The structure involves stock points in feeder towns to
service these retail outlets at the village levels. But it becomes difficult maintaining the
required service level in the delivery of the product at retail level.
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31. Hero Honda
One of the way could be using company delivery vans which can serve two purposes- it
can take the products to the customers in every nook and corner of the market and it also
enables the firm to establish direct contact with them and thereby facilitate sales
promotion. However, only the bigwigs can adopt this channel. The companies with
relatively fewer resources can go in for syndicated distribution where a tie-up between
non-competitive marketers can be established to facilitate distribution.
As a general rule, rural marketing involves more intensive personal selling efforts
compared to urban marketing. Marketers need to understand the psyche of the rural
consumers and then act accordingly. To effectively tap the rural market a brand must
associate itself with the same things the rural folks do. This can be done by utilizing the
various rural folk media to reach them in their own language and in large numbers so that
the brand can be associated with the myriad rituals, celebrations, festivals, melas and
other activities where they assemble.
One very fine example can be quoted of Escorts where they focussed on deeper
penetration .In September-98 they established rural marketing sales. They did not rely on
T.V or press advertisements rather concentrated on focussed approach depending on
geographical and market parameters like fares, melas etc. Looking at the ‘kuchha’ roads
of village they positioned their mobike as tough vehicle. Their advertisements showed
Dharmendra riding Escort with the punchline ‘Jandar Sawari, Shandar Sawari’. Thus, they
achieved whopping sales of 95000 vehicles annually.
One more example, which can be quoted in this regard, is of HLL. A year back HLL
started ‘Operation Bharat’ to tap the rural markets. Under this operation it passed out low–
priced sample packets of its toothpaste, fairness cream, Clinic plus shampoo, and Ponds
cream to twenty million households.
Thus looking at the challenges and the opportunities which rural markets offer to the
marketers it can be said that the future is very promising for those who can understand the
dynamics of rural markets and exploit them to their best advantage.
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32. Hero Honda
Marketing In Rural India:
The Indian society is a complex social system with different castes, classes, creeds and
tribes. The high rate of illiteracy added to the inadequacy of mass media impedes reach
almost to 80% of India's population who reside in village. Mass media is too glamorous,
interpersonal and unreliable in contrast with the familiar performance of traditional artist
whom the villager could not only see and hear, but even touch. Besides this villagers are
more conservative buyers then their urban counterparts. Their desire to innovate with new
product is restricted.
Traditional media can be used to reach these people in the marketing of new concept. The
traditional media with its effective reach, powerful input and personalized communication
system will help in realizing the goal. Besides this when the advertisement is couched in
entertainment it goes down easily with the villager.
Advantages of traditional media:-
The accessibility is high.
Involves more then one sense.
Interest arousal capability is high.
Less operational liability ¨ Minimum cost.
Disadvantages of traditional media:-
Range of mode choice is narrow.
Potential for cognitive gain retention is possible but restricted.
Depends on the skill of the performer But for optimum effect all elements in the rural
communication system will have to be orcheastered into a united whole.
Companies like Bajaj, Rajdoot, HLL, Nirma are the few companies which have used these
methods to the fullest extent.
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33. Hero Honda
Few companies which have used traditional media effectively & the strategy behind it are
:-
The Strategy: Dabur address the rural marketing for its Gripewater to both men and
women.
The Lesson: Rural women make the decisions .Its the men who buy.
The Strategy: Reckitt and Colemen uses NGO's in rural areas to educate customers
about product benefits.
The Lesson: Establishes one to one communication channels.
The Strategy: BBLIL markets its rural brands through magic shows and skits.
The Lesson: Use local idioms to convey your message in a meaningful context.
The Strategy: Hero Honda has established mobile service centers to take care
of rural customers.
The Lesson: Reinforce product quality through service indicators.
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34. Hero Honda
Types of Traditional Media:
Some of the available options in the traditional media are Puppetry, Folk Theater & Song,
Wall Painting, Demonstration, Posters, Agricultural Games, Post Cards etc.
A Puppetry:
Puppetry is the indigenous theatre of India. From time immortal it has been the most
popular form and well-appreciated form of entertainment available to the village people. It
is an inexpensive activity. The manipulator uses the puppets as a medium to express and
communicate ideas, values and social messages.
Puppet theaters in India:-
1. String puppets or Kathputlis of Rajasthan -
Contents - Heroic deeds of Vikramaditya, Prithviraj Chouhan, Amar Singh Rathore
2. String puppets of Orissa -
Contents - Radha-Krishna
3. Rod puppets from Bengal:-
Contents -Mahabharat, Manas , Radha-Krishna
4. String and Rod puppets of the south (Tanjavur, Madras and Andhra):-
Contents - Kathakali
5. Shadow puppets of (a)Orissa (b) Kerala (c)Andhra (d) Karnataka:-
Contents - Ramayana.
Thus in rural India puppetry is a source of livelihood, avenue for entertainment and
creative expression which is ritually sacred and meaningful as a means of social
communication and vehicle of social transformation.
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35. Hero Honda
Song and Drama Division of the Government Of India makes wide use of puppets in its
campaigns to promote various government projects. Several other organizations,
government, semi-government and private, have also used puppets in support of
individual schemes.
Life Insurance Corporation of India used puppets to educate rural masses about Life
Insurance; enlisting the help of the literacy house in Lucknow. These plays were shown to
the audience in villages in UP, Bihar, & MP. The number of inquires at local Life Insurance
Companies during the period immediately following the performance was compared with
normal frequency and found to be considerable higher. The field staff of the corporation
also reported a definite impact on the business.
Indian Institute of mass communication, New Delhi made a study of comparative impact of
puppetry and documentary films, in two villages near Delhi. People in both the villages
responded more favorably to the puppet shows then the films.
Folk Theater:
Folk theaters are mainly short and rhythmic in form. The simple tunes help in informing
and educating the people in informal and interesting manner. It has been used as an
effective medium for social protest against injustice, exploitation and oppression.
Folk Theater / Songs Forms In India:
Andhra Pradesh : Veethi Natakam, Kuchupudi, Burratatha
Bihar: Bidesia, Serikela Chhau, Jat-Jatni Bidpada, Ramkhelia
Haryana : Swang, Naqqal
Assam : Ankiya Nat, Kirtania Natak, Ojapali
Gujarat : Bhavai
Jammu & Kashmir: Bhand Pathar or Bhand Jashna, Vetal Dhamali
Himachal Pradesh: Kariyala, Bhagat, Ras, Jhanki, Harnatra Haran or Harin.
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36. Hero Honda
Kerala: Kodiyattam,Mudiattam,Therayattam,Chavittu Natakam, Chakiyar
Kooth, Kathakali
Karnataka: Yakshagan, Sanata, Doddata-Bayalata, Tala Maddle or
Prasang,Dasarata, Radhna.
Madhya Pradesh : Maanch, Nacha
Orissa: Pala Jatra, Daskathia, Chhau Mayurbhanj, Mangal Ras, Sowang,
Rajasthan: Khyal, Rasdhari, Rammat, Turra Kilangi, Gauri, Nautanki,
Jhamtara
Uttar Pradesh : Ram Leela, Ras Leela, Nautanki, Bhagat, Sang-Swang, Naqqual
Maharashtra : Tamasha, Lalit Bharud, Gondha, Dashavatar
Punjab: Nautanki, Naqaal, Swang.
Tamilnadu : Therukuttu, Veethi Natakam, Bhagwat Mela Natakam, Kurvaanji,
Pagal Vasham, Kavadi Chindu
Goa, Daman & Diu: Dashavatar, Tiyatra.
Folk songs have been effectively used during revolts of Telangana and Naxalbari and now
a days it's best exploiters are Political Parties.
Government has used this media for popularizing improved variety of seeds, agricultural
implements, fertilizer etc. Punjab Agricultural University produced Two Audio Cassettes.
A) Balliye Kanak Biye - Wheat Cultivation.
B) Khiran Kepah Narme - Cotton Cultivation.
Both were well received by farmers.
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37. Hero Honda
Demonstration:
"Direct Contact" is a face to face relationship with people individually and with groups such
as the Panchayats and other village groups. Such contact helps in arousing the villager's
interest in their own problem and motivating them towards self-development.
Demonstration may be:
A. i. Method demonstration
ii. Result demonstration
B. i. Simple Demonstration
ii. Composite Demonstration
The five steps to make any demonstration effective are below:
A Information about people
A Objectives to be accomplished
A Demonstration plan & Execution of the plan
A Evaluation of the demonstration
A Reconsideration after evaluation.
In result demonstration, help of audio -visual media can add value. Asian Paints launched
Utsav range by painting Mukhiya's house or Post office to demonstrate that paint does not
peel off.
Haats & Melas:
The countries oldest tradition holds the key to solving these problems. The mobile
supermarkets of rural India.
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38. Hero Honda
Facts & Figures:-
A Over 47,000 haats and 25,000 melas are held annually.
A The average daily sale at a Haat is about Rs.2.25 Lacs.
A Annual sales at melas amount to Rs.3,500 crore.
A Over half the shoppers at haats have shopping lists.
A More than 10,000 melas draw visitors from all over India.
A Nearly half the outlets at melas are for manufactured goods.
A Haats is a better opportunity for promotion after brand building has been done at
Mela.
A Melas are organized after harvest season,so the villager has enough money which
he will be ready to spend.
Demonstration at Haat is essential to convert customers at haats since their atitude is far
more utilitarian than that of visitors to a fair.
Wall Paintings:
Wall Paintings are an effective and economical medium for advertising in rural areas.
They are silent unlike traditional theatre .A speech or film comes to an end, but wall
painting stays as long as the weather allows it to.
Retailer normally welcomes paintings of their shops, walls, name boards. Since it makes
the shop look cleaner and better. Their shops look alluring and stand out among other
outlets. Besides rural households shopkeepers and panchayats do not except any
payment, for their wall to be painted with product messages. To get one's wall painted with
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39. Hero Honda
the product messages is seemed as a status symbol. The greatest advantage of the
medium is the power of the picture completed with its local touch. The images used have
a strong emotional association with the surrounding, a feat impossible for even a moving
visual medium like television which must use general image to cater to greatest number of
viewers.
A good wall painting must meet some criteria to generate awareness and remind
consumer about the brand. The wall should:
A The most frequented shops can be painted from inside also one feet above the
ground level.
A It is courteous to take the verbal permission of owner .The permission is normally
given. However by taking the permission of the rural retailers or house owners, one
gets the owner morally committed to taking care of wall painting.
A The message should be simple, direct and clear .
A definite way of arresting is to use bright colors and these do not fade away easily.
A good paint will survive the ravages of dust, sand and rainstorms for about three
years.
A Paintings must be taken after rainfall.
A It should be peaked up during the festival and post harvest season. To derive
maximum mileage their usage needs to be planned meticulously.
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40. Hero Honda
Hero Honda in the Rural Market.
In the rural market, consumers prefer motorcycles for their sturdiness and ability to sustain
bad road conditions. The stricter environment norms such as the euro emission norms are
forcing companies to install catalytic converters in the existing vehicles or go in for four-
stroke engines to reduce pollution. This has added up to the costs of scooters while most
motorcycles are in tandem with these new norms.
The success of the motorcycle is more of a rural phenomenon. According to analysts, the
entire age profile of the consumer has undergone a change and the buyers / target
consumers are now younger. ``So, in effect, the entire demographics now are in favour of
the motorcycle segment. It is not unusual that a large chunk of motorcycle sales are from
the rural areas. Hero Honda, derives 60 per cent of its sales from the rural segment.”
In order to promote its brand in the rural market, Hero Honda has recently launched a
marketing initiative in towns with a population of less than 50,000 in Uttar Pradesh. The
initiative would involve a mobile showroom and workshop, through which people will be
able to gather knowledge about the vehicles and also buy them. The concentration will be
mainly on promoting the company's two major brands: Splendor and Joy.
With these initiatives, Hero Honda is targeting sales of 1.3 million two-wheelers this fiscal.
The festival season has also showed an improvement in sales for Hero Honda despite the
current downtrend. A factor driving sales could be the company's offering of a two-year
warranty (for which it claims to spend approximately Rs 10-15 crore annually) and its
hugely successful consumer loyalty programme.
Hero Honda, makes practically nothing at its plant. The only operation done at its
Dharuhera works other than the assembly of motorcycles is engine assembly.
Hero Honda has an enormous advantage as in it has a product for each of the market
segments. The CD 100 is the basic no-frills model with fuel efficiency and reliability as
USP; the CD 100 SS is the upgraded durable model positioned in the rural market; Sleek
the glamorous bike for the urban youth and the Splendor is the premium product with
better features and targeted at the urban market.
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41. Hero Honda
Analysts believe that the biggest advantage Hero Honda enjoys is its brand image as a
fuel-efficient bike. The company expects to leverage on the strong brand image when its
earliest customers start looking for replacements.
A recent research report says that on the back of large volumes, Hero Honda has
developed strong vendors like Munjal Showa, Hi-Tech Gears, International Instruments
and others from whom it sources more than 80 per cent of its components. This has also
helped the company to lower its import content.
Hero Honda, makes practically nothing at its plant. The only operation done at its
Dharuhera works other than the assembly of motorcycles is engine assembly.
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42. Hero Honda
A Dream Turned into Reality
“Quote”
We must do something for the community from whose
land we generate our wealth.
“Unquote”
This famous quote of Hero Honda’s CMD, Mr.Brijmohan Lall Munjal set the ball
rolling for the Rural Development of the area around Dharuhera (Haryana) in the
year 1990 and 10 years later, the dream, the vision has turned into reality.
It can be said with all the humility & modesty that Hero Honda Motors Ltd is perhaps the
only Corporate House who have genuinely contributed to its share of Social Service &
Community Development of a backward region in almost all the spheres, be it
Infrastructure (Roads, Water Supply Scheme, Community Hall, School Buildings),
Education, Health ,Sports, Adult Education and Vocational Training and turned in
into a Vibrant, Educated and Healthy community with all the modern amenities
available to it in a modern society.
Setting up of an Integrated Rural Development Centre called “Raman Kant Munjal
Foundation” in 40 acres land along Delhi Jaipur Highway (NH-5) near Dharuhera. This
Nodal Agency was set up in 1992 and is responsible for initiating and undertaking all the
activities & project related to Rural Development & for the Uplift of the Community.
Some of the salient features of their Social & Community Development Projects which
have been undertaken since the last seven years are listed below :-
Raman Munjal Vidya Mandir : Raman Munjal Vidya Mandir of Raman Kant Munjal
foundation was started in 1992 with three classes (UKG,I& II) and 55 students with the
aim to impart education that is holistic in approach especially to the students of rural area.
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43. Hero Honda
Today it has grown into a Senior Secondary, CBSE affiliated co-educational, English
Medium School with 1050 students and 51 teachers having complete & most modern
infrastructure. The school provides a confluence of modern educational facilities like full
fledged ultra-modern laboratory, well equipped Audio Visual Room, Indoor Games,
Activity Room, well stocked Library and ultra modern Computer Laboratory
The platform is one of interaction amongst the teachers and the taught thereby fostering a
conducive education environment. The school aims to involve parents as prime factors in
the child’s learning process. No stone is left unturned to encourage the students to
develop well integrated personalities. Self learning is a part of our curriculum. Varied co-
curricular activities make our students receptive to art, culture and language skills. The
school has a large spacious playground and sports is encouraged to the core.
Raman Munjal Memorial Hospital : A multi specialty 30 bed hospital, to be upgraded to
100 bed unit having state of the art equipment providing quality health care to the rural
population of the catchment area of 20 KM around Dharuhera, apart from providing
immediate life saving medical aid to the Accident & Trauma victims of National highway
No-8 .
Raman Munjal Sports Complex : A modern sports complex primarily to promote rural
sports is likely to be planned in near future with sports academies in Volley ball and
Basket ball, in collaboration with National Sports Authority of India. Out door Basket
ball & Volley ball courts in addition to Hockey & Football playgrounds are already being
utilized by the local population.
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44. Hero Honda
Vocational Training Centre : In order to help local rural people, specially women, the
Company has set up a Vocational Training Centre. So far 13 batches comprising of
nearly 150 women have been trained in tailoring, embroidery and knitting. The Company
has helped women trained at this center to set up a production unit to stitch uniforms for
its employees thus creating income generation opportunities for them. Most of the women
are now self employed.
Adult Literacy Mission : This Scheme was launched on 21st September, 1999
covering the nearby villages of Malpura, Kapriwas & Sidhrawali wherein 36 adults
were enrolled. We are now in the process of imparting Adult Literacy Capsules to
another 100 adults by involving Village Heads and other prominent villagers to
motivate the illiterate adults. The program is a regular feature, only village keeps
changing.
Marriages of Under Privileged Girls, particularly from backward classes have been
organized as per the local customs from time to time by providing financial help and other
support to the respective families.
Rural Health Care : Besides setting up a modern hospital as mentioned above, the
company has provided extensive health care services to the local community at their door
step. A series of Free Health Care & Medical Camps have been organized in the last 7
years or so and has now become a regular feature.
Adoption of Village for Integrated Development : The Company has adopted 10
villages located within 10 km radius of our factory for integrated rural development. Some
of the developmental activities undertaken in these villages are as under :
Drinking Water : Southern Haryana being water scarce area, the Company has installed
75 deep bore hand pumps in the adjoining villages to provide clean drinking water.
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45. Hero Honda
Construction of Roads : The Company has constructed approx. 5 km of metalled roads
and connected these villages to the National Highway (NH –8).
Renovation of Govt. School Building : Four Primary School Buildings have been
renovated including provision of Sulabh toilets and drinking water.
Construction of Drainage : Most of these villages do not have proper drainage causing
water logging in the heart of these villages. The Company has constructed proper
drainage system in these villages.
Promotion of Non-Conventional Energy : In order to promote non-conventional
sources of energy the Company has been subsidizing installation of bio-gas plants
by 50 percent. 15 such plants are currently operational.
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