4. Big Move – Media Coverage
Financial
Express, New 29th April‟11 ( FT, New Delhi)
BS, Kolkata (15th Oct‟10) Delhi(24th Dec10)
Hindustan
Times, New
ET, New Delhi Delhi(25th
Hindu Business Line, New Delhi (26th Oct10) (2th May‟11) Oct‟10)
ET, New Delhi (27th Oct10)
Financial Express, New Delhi (24th Sep‟10) Mint, New Delhi (13th May‟11)
7. Index
History : Hero Group
Indian Automobile Market at a Glance
Indian Two-wheeler Industry Scenario
Difference in approach (Hero Honda, Honda & Bajaj – Brand Building)
Hero vs. Honda (Positioning & SWOT analysis)
Hero Approach for Future
9. Hero Group
Brijmohan Lall Munjal was born in 1923 at Kamalia, district Toba Tek Singh (now in Pakistan). He was
from a simple middle-class Hindu family. After completing his formal education he worked at the Army
Ordnance Factory, before moving his base to India after partition.
In 1944, when Brijmohan was 20, his family sensed partition, So Brijmohan along with his elder brothers
Dayanand Munjal, Satyanand Munjal and his younger brother Om Prakash Munjal came to India and
settled in Amritsar. The brothers initially started a business by supplying components to manufacturers of
bicycles in and around Amritsar. After the partition in 1947 the Munjal family completely shifted their base from
Pakistan to Ludhiana. Brijmohan Lall Munjal
In 1961, Rockman Cycles Industries was established to manufacture bicycle chains and hubs. Under his leadership Hero
Cycles was the first company to export bicycles in large scale. In 1975 they had earned the distinction of Largest bicycle
manufactures in India. By 1986 Hero Cycles Limited entered the Guinness Book of Records as the largest manufacturers of
bicycles in the world
The company is a joint venture between India's Hero Group and Honda Motor Company, Japan that began in 1984.
In 2001, the company achieved the coveted position of being the largest two-wheeler manufacturing company in India and the
„World No.1‟ two-wheeler company in terms of unit volume sales in a calendar year by a single company. Hero Honda has
retained that coveted position till date.
Hero Honda three manufacturing
units in India, Two of these are
based at Gurgaon and
Dharuhera which are located in
the state of Haryana in northern
India. The third and the latest
manufacturing plant is based at
Haridwar, in the hill state of
Uttrakhand
HHML First Plant inauguration, (Gurgaon) HHML‟s First Vehicle hit the road
10. Hero Group Companies
Hero Global Design
Munjal Auto Component
Majestic Auto Ltd
Hero Cold rolling Division
Hero has excellent presence in two-wheeler, bicycle and auto component manufacturing
12. Indian Automobile Market at a glance:
2nd most populated country
4th largest economy in the world
2nd largest two-wheeler market
4th largest commercial vehicle
market
11th largest passenger car market
& is expected to become 7th largest
by 2016.
India emerged as Asia‟s 4th
largest exporter of automobiles,
behind Japan, South Korea and
Thailand.
By 2050, the country is expected
to Top the world in car volumes with
approximately 611 Mn. vehicles on
the nation‟s roads
13. Reasons for Growth :
Growing working population
Fast paced urbanization
Increasing city limits
Lack of good public transport
Increased access to credit & lower interest loans
Middle class population is expending by 30Mn every year
15. Two wheeler market scenario
<Two- wheeler market volume trend> <Segment wise contribution>
Units in Lacs
90 100%
81
80
70 80%
60
60%
50
40 34
40% 81%
30
20 20%
33%
10
0 0%
'99 '00 '01 '02 '03 '04 '05 '06 '07 08 '99 '00 '01 '02 '03 '04 '05 '06 '07 08
Year wise segment wise Industry data Year wise/segment wise Industry data (Mkt share)
MC SC
ATSC MPD
FSC CUB
MPD
• The Indian two-wheeler market has grown from 3.4 Mn units in 1999 to 8.1 Mn. units in 2008 and crossed by
2010 crosses 10 Mn mark.
• The Motorcycle segment is the no.1 segment contributing to approx 80% of total sales.
17. Indian Two Wheeler Industry Scenario :
OTHERS
6%
ATSC
15%
GSC 1%
Indian
09年9月移動年
>180MC 1%
2国内市場
wheeler 100-110MC
150-180MC 51%
11%
8,076千台
Industry
125-135MC
15%
Entry level segment governs the industry with more than 50% contribution to the industry.
18. Manufacturer wise Positioning :
Volume
More than 1Lac units/month Network
Less than 1Lac units/month
Approx 70% market is captured by HHML & Bajaj (Indian Manufaturers)
19. Manufacturer wise Positioning :
Volume
More than 1Lac units/month Network
Less than 1Lac units/month
Honda as a group has more than 60% market share.
20. Manufacturer wise Contribution :
1% 1% Market Share
1% Market Share
1%
2% (2008-09) HHML 0% (2009-10) HHML
2%
0% 0% Bajaj 2% 0%
2% Bajaj
TVS TVS
HMSI 13% HMSI
14%
Yamaha Yamaha
Suzuki 48% Suzuki
48%
14%
15% Enfield Enfield
Mahindra Mahindra
Othere Othere
19%
17% LML LML
CY :
LY :
•HHML is maintaining its position with 48%
•HHML leads the position with 48% Market market share.
share
•Bajaj has improved its position from 17%
•Followed by Bajaj with 17% & TVS by 15% to 19%
•There is a slight dip in TVS & HMSI
23. Difference in Approach
HHML : Honda Motor Co. Ltd. Japan entered into Indian two-wheeler industry in the year of 1983 with a JV
with Hero Group of India and formed a co. called Hero Honda Motors India Ltd. Since its establishment, the
Company is the leader in the segment and currently holds market share of 48%.
Kinetic : At the same time, to meet increasing customers demand, Honda Motor Co. Ltd. Japan also did a
JV with Kinetic Engineering Ltd. of India to venture into indian scooter market in 1985 but the JV could not
go for a long and in 1998 the JV between the two broke-down.
HMSI : In 1999 Indian Gov. Signed Free Trade Policy which made easy to foreign players to venture in
Indian market. HM Japan ventured again in India, the company decided to form its 100% subsidiary and
formed a co. called Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) which started its business
operations in India in 2001. Company started its business with an entry in scooter segment thereafter
introduced motorcycle in 2004. Currently company has its presence in each segment with 9 domestic & 3
international products and enjoying a market share of 15%.
Current Scenario : After completion of 10 years of HMSI in Indian two-wheeler market, Honda Motor Co. Ltd. Japan decided
to brake the JV with Hero Group of India and decided to serve Indian market independently with HMSI.
Introduction
of Kinetic
Honda
Introduction
of HHML
24. Market Scenario in 1984
Bajaj, Enfield, Escorts were present in the market
&
Bajaj was the most preferred brand
(“Hamara Bajaj”)
26. Difference in Approach
HHML : Honda Motor Co. Ltd. Japan entered into Indian two-wheeler industry in the year of 1983 with a JV
with Hero Group of India and formed a co. called Hero Honda Motors India Ltd. Since its establishment, the
Company is the leader in the segment and currently holds market share of 48%.
Kinetic : At the same time, to meet increasing customers demand, Honda Motor Co. Ltd. Japan also did a
JV with Kinetic Engineering Ltd. of India to venture into indian scooter market in 1985 but the JV could not
go for a long and in 1998 the JV between the two broke-down.
HMSI : In 1999 Indian Gov. Signed Free Trade Policy which made easy to foreign players to venture in
Indian market. HM Japan ventured again in India, the company decided to form its 100% subsidiary and
formed a co. called Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) which started its business
operations in India in 2001. Company started its business with an entry in scooter segment thereafter
introduced motorcycle in 2004. Currently company has its presence in each segment with 9 domestic & 3
international products and enjoying a market share of 15%.
Current Scenario : After completion of 10 years of HMSI in Indian two-wheeler market, Honda Motor Co. Ltd. Japan decided
to brake the JV with Hero Group of India and decided to serve Indian market independently with HMSI.
Demerger of
Kinetic Honda
Introduction of
Kinetic Honda
Introduction
of HHML
27. Difference in Approach
HHML : Honda Motor Co. Ltd. Japan entered into Indian two-wheeler industry in the year of 1983 with a JV
with Hero Group of India and formed a co. called Hero Honda Motors India Ltd. Since its establishment, the
Company is the leader in the segment and currently holds market share of 48%.
Kinetic : At the same time, to meet increasing customers demand, Honda Motor Co. Ltd. Japan also did a
JV with Kinetic Engineering Ltd. of India to venture into indian scooter market in 1985 but the JV could not
go for a long and in 1998 the JV between the two broke-down.
HMSI : In 1999 Indian Gov. Signed Free Trade Policy which made easy to foreign players to venture in
Indian market. HM Japan ventured again in India, the company decided to form its 100% subsidiary and
formed a co. called Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) which started its business
operations in India in 2001. Company started its business with an entry in scooter segment thereafter
introduced motorcycle in 2004. Currently company has its presence in each segment with 9 domestic & 3
international products and enjoying a market share of 15%.
Current Scenario : After completion of 10 years of HMSI in Indian two-wheeler market, Honda Motor Co. Ltd. Japan decided
to brake the JV with Hero Group of India and decided to serve Indian market independently with HMSI.
Introduction
of HMSI
Demerger of
Kinetic Honda
Introduction of
Introduction Kinetic Honda
of HHML
29. Bajaj Positioning
2001
Old Bajaj changing to New Bajaj
(Focused youths & respect Indian Culture)
30. Difference in Approach
HHML : Honda Motor Co. Ltd. Japan entered into Indian two-wheeler industry in the year of 1983 with a JV
with Hero Group of India and formed a co. called Hero Honda Motors India Ltd. Since its establishment, the
Company is the leader in the segment and currently holds market share of 48%.
Kinetic : At the same time, to meet increasing customers demand, Honda Motor Co. Ltd. Japan also did a
JV with Kinetic Engineering Ltd. of India to venture into indian scooter market in 1985 but the JV could not
go for a long and in 1998 the JV between the two broke-down.
HMSI : In 1999 Indian Gov. Signed Free Trade Policy which made easy to foreign players to venture in
Indian market. HM Japan ventured again in India, the company decided to form its 100% subsidiary and
formed a co. called Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) which started its business
operations in India in 2001. Company started its business with an entry in scooter segment thereafter
introduced motorcycle in 2004. Currently company has its presence in each segment with 9 domestic & 3
international products and enjoying a market share of 15%.
Current Scenario : After completion of 10 years of HMSI in Indian two-wheeler market, Honda Motor Co. Ltd. Japan decided
to brake the JV with Hero Group of India and decided to serve Indian market independently with HMSI.
Honda has
arrived
Introduction
of HMSI
Demerger of
Kinetic Honda
Introduction
of Kinetic
Honda
Introduction
of HHML
31. Honda Positioning
2004
Honda has arrived
Honda is adopting Indian Culture & respect their values
(Heena Ad)
32. Hero Honda Positioning
HHML started Celebrity endorsement & focused on Sports
(Dhak Dhak Go)
33. Bajaj Positioning
2007
Bajaj started focusing on Young Bikers & Fun Biking Culture
(Hami se aage nikal rahe hai hum – Hamara Bajaj)
35. Hero vs. Honda
HHML : Honda Motor Co. Ltd. Japan entered into Indian two-wheeler industry in the year of 1983 with a JV
with Hero Group of India and formed a co. called Hero Honda Motors India Ltd. Since its establishment, the
Company is the leader in the segment and currently holds market share of 48%.
Kinetic : At the same time, to meet increasing customers demand, Honda Motor Co. Ltd. Japan also did a
JV with Kinetic Engineering Ltd. of India to venture into indian scooter market in 1985 but the JV could not
go for a long and in 1998 the JV between the two broke-down.
HMSI : In 1999 Indian Gov. Signed Free Trade Policy which made easy to foreign players to venture in
Indian market. HM Japan ventured again in India, the company decided to form its 100% subsidiary and
formed a co. called Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) which started its business
operations in India in 2001. Company started its business with an entry in scooter segment thereafter
introduced motorcycle in 2004. Currently company has its presence in each segment with 9 domestic & 3
international products and enjoying a market share of 15%.
Current Scenario : After completion of 10 years of HMSI in Indian two-wheeler market, Honda Motor Co. Ltd. Japan decided
to brake the JV with Hero Group of India and decided to serve Indian market independently with HMSI.
Honda - 10yrs
Honda has Hero Honda – 25yrs
arrived
Introduction
of HMSI
Demerger of
Kinetic Honda
Introduction
of Kinetic
Honda
Introduction
of HHML
Honda Long Term Planner
37. Hero vs. Honda
HHML : Honda Motor Co. Ltd. Japan entered into Indian two-wheeler industry in the year of 1983 with a JV
with Hero Group of India and formed a co. called Hero Honda Motors India Ltd. Since its establishment, the
Company is the leader in the segment and currently holds market share of 48%.
Kinetic : At the same time, to meet increasing customers demand, Honda Motor Co. Ltd. Japan also did a
JV with Kinetic Engineering Ltd. of India to venture into indian scooter market in 1985 but the JV could not
go for a long and in 1998 the JV between the two broke-down.
HMSI : In 1999 Indian Gov. Signed Free Trade Policy which made easy to foreign players to venture in
Indian market. HM Japan ventured again in India, the company decided to form its 100% subsidiary and
formed a co. called Honda Motorcycle & Scooter India Pvt. Ltd. (HMSI) which started its business
operations in India in 2001. Company started its business with an entry in scooter segment thereafter
introduced motorcycle in 2004. Currently company has its presence in each segment with 9 domestic & 3
international products and enjoying a market share of 15%.
Current Scenario : After completion of 10 years of HMSI in Indian two-wheeler market, Honda Motor Co. Ltd. Japan decided
to brake the JV with Hero Group of India and decided to serve Indian market independently with HMSI.
Removal of Honda
from Hero
Demerger of
Honda has Hero Honda
arrived
Introduction
of HMSI
Demerger of
Kinetic Honda
Introduction
of Kinetic
Introduction Honda
of HHML
38. Lesson from Indian Automobile JVs
Kawasaki Bajaj (1986 ~ 2000)
TVS Suzuki (1986 ~ 2000) Removal of Honda
from Hero
Demerger of
Escort Yamaha (early 80‟s to late 90‟s) Honda has Hero Honda
arrived
Kinetic Honda ( 1984 ~ 98) Introduction
of HMSI
LML Piaggio (1984 ~ 99) Demerger of
Kinetic Honda
Introduction
of Kinetic
Introduction Honda
of HHML
Know
Your Competition
Your Market
Your Customer
Have breakfast or be breakfast
39. Difference in Approach
HHML Approach
Celebrity - Hrithik, Priyanaka
Sports - Cricket, Shooting, Hockey, Tennis
Music & Reality - Sa Re Ga Ma Pa & Roadies
Focus was on Indian Culture, Tradition & their Values
Key attribute : Marketing & Distribution
Honda Approach
Key attribute : Quality & Technology
Bajaj approach
Key attribute : Fun Biking & Youth Centric
41. Hero vs. Honda (Hero Group)
Hero Global Design
Munjal Auto Component
Majestic Auto Ltd
Hero Cold rolling Division
Hero neither focused on “BRAND” nor diversified their business in other sectors.
43. Hero vs. Honda (Honda Group)
Honda R&D (India) Pvt Ltd. Honda Siel Power Products Ltd.
6 Group Companies in India
Honda Motorcycle & Honda Siel Cars India
Scooter India Pvt. Ltd.
Hero Honda Motor Ltd Honda Motor India
Honda has over 60% Market Share in Indian two-wheeler Market
44. Hero vs. Honda
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Color & Graphics Color & Graphics
Activa OCT‟ 05 SEP‟ 07 MAR‟09
JUL ‟01 Color & Graphics Color & Graphics Color & Graphics
Dio OCT‟ 05 OCT‟ 07 OCT‟ 08
SEP‟ 02 Color & Graphics Color & Graphics
Eterno NOV‟ 05 SEP‟ 07 Stopped CB Unicorn
MAY‟‟03 Color & Graphics Color & Graphics Color & Graphics
Unicorn OCT‟05 MAR‟07 APR‟08
OCT‟ 04 MMC/ Cast wheel
Color & Graphics Color & Graphics CB Unicorn
Dazzler
Shine APR. 07 Oct‟08
APR‟ 06 Cast wheel, CB Shine
Aviator OCT‟09
JAN „08 May‟09
Every year Honda introduced CBF Stunner
a Product & silently strengthened JUNE‟08 PGM-FI
Fun Bike
its portfolio
CB1000R
FEB‟ 09 CBR1000RR
JAN‟10
CB Twister
45. Manufacturer wise Positioning :
International
Conservative Modern
Indian
Hero Honda is yet to make its clear positioning
46. HERO HONDA ~ SWOT Analysis
•Brand equity/reputation among customers •New Brand has to be established
•Aggressive Marketing •R&D setup
•Strong Distribution Network •Less International Market know how
•Deep Penetration in India Market •Too much dependence on few models
•Strong Resale Value •Hero is very much dependent on Honda
S W
•Fast growing sector
OT
•Establish customer trust with new Hero Brand
•Exports market is yet to be properly exploited •Need to have a bigger presence in the executive seg.
•Cruiser bike segment is unexplored by HHML •Major bike makers in the world are lining up for India
•Most reliable bike manufacturer in India •Low cash reserves
•Strong brand follower •Losing a foothold in the exports market
•Strong competition from Indian & International Brands
48. Company’s Vision & Mission
Hero Honda
Vision : The Hero Honda story began with a simple vision – the vision of a mobile and an
empowered India, powered by Hero Honda. This vision was driven by Hero Honda‟s
commitment to customer, quality and excellence, and while doing so, maintaining the highest
standards of ethics and societal responsibilities. Hero Honda believes that the fastest way to
turn that dream into a reality is by remaining focused on that vision.
Strategy : Hero Honda‟s key strategy has been driven by innovation in every sphere of activity
– building a robust product portfolio across categories, exploring new markets, aggressively
expanding the network and continuing to invest in brand building activities.
Honda
Philosophy : Honda operates on a principle, which is followed worldwide by all Honda
companies. Maintaining a global viewpoint, we are dedicated to supplying products of the highest
quality, yet at a reasonable price for worldwide customer satisfaction. Honda's philosophy is
based on the company's guiding principle and advocates 2 fundamental beliefs:
1. Respect for Individual – Initiative, Equality & Trust
2. Three Joy – Joy of Buying, Joy of Selling, Joy of Creating
Principle : Maintaining a global viewpoint, we are dedicated to supplying products of the highest
quality yet at a reasonable price for worldwide customer satisfaction.
49. Brand Building
Introduction of new Brand Logo & CI
Strengthen new Hero Brand
Focus on R&D
Deep penetration in Indian Market
Make a Vision for International Markets
Focus on 4As
50. Introduction of New Logo
Hero should create a new CI first and it should be introduced in phased manner
51. Strengthen New Hero Brand
2nd Hand 2-w
(April’12)
Co. Owned Outlets
(March’12)
Auto Expo
(Jan’12)
Racing in India
(Oct’11)
New CI & Promotion
(July’11)
59. How to enter
Degree of involvement
High Involvement, High Cost
Equity stake
or acquisition
Joint Venture
Contract
Manufacturing
Licensing
Exporting
Low Involvement & Low Cost
Cost
India should be
the first Priority
60. Vision for International Markets
Culturally Close
Organic Acquisition
Easy
Difficult to
to enter
enter
Franchise Joint Venture
Culturally Distant
Latin America, Africa, Middle East & South East Asia
62. Learning
“If this business were split up, I would give you
the land and bricks and mortar, and I would
take the brands and trade marks, and I would
far better than you.”
– John Stuart
