Bajaj vs Herohonda1

7/29/2019 Bajaj vs Herohonda1

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COMPARATIVE STUDY

OF

BAJAJ AUTO AND HERO HONDA


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.

Company profile

Bajaj Auto limited is one of the largest two wheeler manufacturing company in India apart

from producing two wheelers they also manufacture three wheelers. It is the world's 4th

largest two- and three-wheeler maker. It is based in Pune, Maharashtra, with plants in Waluj

near Aurangabad, Akurdi and Chakan, near Pune. Bajaj Auto makers motor scooters,

motorcycles and the auto rickshaw.

The company had started way back in 1945. Initially it used to import the twowheelers from outside, but from 1959 it started manufacturing of two wheelers in the country.

By the year 1970 Bajaj Auto had rolled out their 100,000th vehicle. Bajaj scooters and motor

cycles have become an integral part of the Indian milieu and over the years have come to

represent the aspirations of modern India.Bajaj Auto is a major Indian automobile

manufacturer. It is India's largest and the worlds 4th largest two- and three-wheeler maker. It

is based in Pune, Maharashtra, with plants in Waluj near Aurangabad, Akurdi and Chakan,

near Pune. Bajaj Auto makers motor scooters, motorcycles and the auto rickshaw.

Company's history

Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading

Corporation Private Limited. It started off by selling imported two- and three-wheelers in

India. In 1959, it obtained license from the Government of India to manufacture two- and

three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In

1977, it managed to produce and sell 100,000 vehicles in a single financial year. In 1985, it

started producing at Waluj in Aurangabad. In 1986, it managed to produce and sell 500,000

vehicles in a single financial year. In 1995, it rolled out its ten millionth vehicles and

produced and sold 1 million vehicles in a year.According to the authors of Globality: Competing with Everyone from

Everywhere for Everything, Bajaj has grown operations in 50 countries by creating a line of

value-for-money bikes targeted to the different preferences of entry-level buyers.


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Origins

The Bajaj Group was formed in the first days of India's independence from Britain. Its

founder, Jamnalal Bajaj, had been a follower of Mahatma Gandhi, who reportedly referred to

him as a fifth son. 'Whenever I spoke of wealthy menbecoming the trustees of their wealth

for the common good I always had this merchant prince principally in mind,' said theMahatma after Jamnalal's death.

New Tools in the 1990s

Still, intense competition was beginning to hurt sales at home and abroad during the calendar

year 1997. Bajaj's low-tech, low-cost cycles were not faring as well as its rivals' higher-end

offerings, particularly in high-powered motorcycles, since poorer consumers were

withstanding the worst of the recession. The company invested in its new Pune plant in order

to introduce new models more quickly. The company spent Rs 7.5 billion ($185 million) onadvanced, computer-controlled machine tools. It would need new models to comply with the

more stringent emissions standards slated for 2000. Bajaj began installing Rs 800 catalytic

converters to its two-stroke scooter models beginning in 1999.

New Image

The Company, over the last decade has successfully changed its image from a scooter

manufacturer to a two wheeler manufacturer, product range ranging from Scooterettes to

Scooters to Motorcycle. Its real growth in numbers has come in the last 4 years after

successful introduction of a few models in the motorcycle segment. Bajaj has redefined both

the value and the premium segments with its motorcycles offering unique features not seen in

their competitors in those classes.


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PROFILE

OF

BAJAJ AUTO

Founder Jamnalal Bajaj

Year of Establishment 1926

Industry Automotive - Two & ThreeWheelers

Business Group The Bajaj Group

Listings & its codes BSE Code: 500490; NSE -Code:BAJAJAUTO

Presence Distribution network covers 50countries. Dominant presence in SriLanka, Bangladesh,Columbia,Guatemala, Peru, Egypt, Iran andIndonesia.

Joint Venture Kawasaki Heavy Industries of Japan.

Registered & Head Office AkurdiPune-411035Indis

Tel:+91-20-27472851Fax:+91-20-27473398

Works Akurdi,oune 411035

Bajaj Nagar,walujAurangabad 431136

Chahan Industrial Area,Chakan, pune 411501

E-mail [email protected]

website www.bajajauto.com


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BAJAJ AUTOTimeline of new releases

1971- three-wheeler goods carrier

1972-Bajaj Chetak

1976-Bajaj Super

1977- Rear engine Auto rickshaw

1981-Bajaj M-50

1986-Bajaj M-80, Kawasaki Bajaj KB100

1990-Bajaj Sunny

1994-Bajaj Classic

1995-Bajaj Super Excel

1997-Kawasaki Bajaj Boxer, Rear Engine Diesel Auto rickshaw

1998-Kawasaki Bajaj Caliber, Legend (India's first four-stroke scooter)

2000-Bajaj Saffire

2001- Eliminator, Pulsar

2003-Caliber115, Bajaj Wind 125,Bajaj Pulsar

2004-Bajaj CT 100, New Bajaj Chetak 4-stroke with Wonder Gear, Bajaj Discover DTS-i

2005-Bajaj Wave, Bajaj Avenger, Bajaj Discover

2006-Bajaj Platina 11

2007-Bajaj Pulsar-200 Some of the models that Bajaj makes (or has made) are:


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BAJAJ COLLECTION

SCOOTERS

Bajaj Sunny

Bajaj Chetak

Bajaj Cub

Bajaj Super

Bajaj Wave

Bajaj Legend

MOTORCYCLES

Kawasaki Eliminator

Bajaj Pulsar

Bajaj Kawasaki Wind 125

Bajaj Boxer

Bajaj CT 100

Bajaj Platina

Bajaj Caliber

Bajaj Discover

Bajaj Avenger


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UPCOMING MODELS

Bajaj Pulsar 220 DTS-Fi

Bajaj Krystal

Bajaj Blade

Bajaj Sonic

Hero Honda "Splendor" Mode

SWOT ANALYSIS

Lets analyze the position of Hero Honda in the current market set-up, evaluating its

strengths, weakness, threats and opportunities available.

STRENGHTS

Highly experienced management.

Product design and development capabilities.

High export to domestic sales ratio.

High economies of scales.

High economies of scope.

Great financial support network.

High performance product across all categories.

WEAKNESS

Not a global player in spite of huge volumes.

Not a global recognised brand.

Still has no established brand to match Hero Hondas splendour in commuter

segment.


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Hasnt employed the excess cash for long.

THREATS

The competition catches-up any new innovation in no time.

Threats of cheap imported motorcycles from china

Margin getting squeezed from both the direction (price as well as cost).

OPPORTUNITIES

Double-digit growth in two-wheeler market.

More maturity and movements towards higher-end motorcycles.

Growing world demand.

Company Profile

Hero, is the brand name used by the Munjal brothers in the year 1956 with the flagship

company Hero Cycles. The two-wheeler manufacturing business of bicycle components had

originally started in the 1940s and turned into the worlds largest bicycle manufacturer

today. Hero is a name synonymous with two-wheelers in India today. TheMunjals roll their

own steel; make free wheel bicycle critical components and have diversified into different

ventures like product design. The Hero Group philosophy is: To provide excellent

transportation to the common man at easily affordable prices and to provide total satisfaction

in all its spheres of activity. The Hero group vision is to build long lasting relationships with

everyone (customers, workers, dealers and vendors). The Hero Group has a passion for

setting higher standards and Engineering Satisfaction is the prime motivation, way of life


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and work culture of the Group. In the year 1984, Mr. Brijmohan Lal Munjal, the Chairman

and Managing Director of Hero Honda Motors (HHM), headed an alliance between the

Munjal family and Honda Motor Company Ltd. (HMC). 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 toexcellence in the new millennium. This alliance became one of the most successful joint

ventures in India, until the year 1999when HMC had announced a 100% subsidiary, Honda

Motorcycle & Scooter India (HMSI). This announcement caused the HHM stock price to

decrease by 30 percent that same day. Munjal had to come up with some new strategic

decisions as, HMSI and other foreign new entry companies were causing increased intensity

of rivalry for HHM.

Growth

The business growth of Hero Honda has been phenomenal throughout its early days. The

Munjal family started a modest business of bicycle components. Hero Group expanded so big

that by 2002 they had sold 86 million bicycles producing 16000 bicycles a day. Today Hero

Honda has an assembly line of 9 different models of motorcycles available. It holds the

record for most popular bike in the world by sales for 17

Its Splendor model. Hero Honda Motors Limited was established in joint venture with

Honda Motors of Japan in 1984, to manufacture motorcycles. It is currently the largest

producer of Two Wheelers in the world. It sold 3 million bikes in the year 2005-

2006.Recently it has also entered in scooter manufacturing, with its model PLEASURE

mainly aimed at girls. The Hero Group has done business differently right from the start and

that is what has helped them to achieve break-through in the competitive two-wheeler market.

The Group's low key, but focused, style of management has earned the company plaudits

amidst investors, employees, vendors and dealers, as also worldwide recognition. The growth

of the Group through the years has been influenced by a number of factors:

Just-in-Time

The Hero Group through the Hero Cycles Division was the first to introduce the concept of

just-in-time inventory. The Group boasts of superb operational efficiencies. Every assembly

line worker operates two machines simultaneously to save time and improve productivity.

The fact that most of the machines are either developed or fabricated in-house, has resulted in

low inventory levels. In Hero Cycles Limited, the just-in-time inventory principle has been

working since the beginning of production in the unit and is functional even till date.. This is

the Japanese style of production and in India; Hero is probably the only company to have

mastered the art of the just-in-time inventory principle.

Dealer Network


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The relationship of Hero Group with their dealers is unique in its closeness. The dealers are

considered a part of the Hero family. A nation-wide dealer network comprising of over 5,000

outlets, and have a formidable distribution system in place. Sales agents from18

Hero travels to all the corners of the country, visiting dealers and send back daily

postcards with information on the stock position that day, turnover, fresh purchases,

anticipated demand and also competitor action in the region. The manufacturing units have a

separate department to handle dealer complaints and problems and the first response is

always given in 24 hours.

Financial Planning

The Hero Group benefits from the Group Chairman's financial acumen and his grasp on

technology, manufacturing and marketing. Group Company, Hero Cycles Limited has one of

the highest labour productivity rates in the world. In Hero Honda Motors Limited, the focus

is on financial and raw material management and a low employee turnover.

Quality

Quality at Hero is attained not just by modern plants and equipment and through latest

technology, but by enforcing a strict discipline. At the Group factories, attaining quality

standards is an everyday practice - a strictly pursued discipline. It comes from an

amalgamation of the latest technology with deep-rooted experience derived from nearly four

decades of hard lab or. It is an attitude that masters the challenge of growth and change -

change in consumers' perceptions about products and new aspirations arising from a new

generation of buyers. Constant technology up gradation ensures that the Group stays in theglobal mainstream and maintains its competitive edge. With each of its foreign

collaborations, the Group goes onto strengthen its quality measures as per the book. The

Group also employs the services of independent experts from around the world to assist in

new design and production processes.

Diversification

Throughout the years of enormous growth, the Group Chairman, Mr. Lall has actively looked

at diversification. A considerable level of backward integration in its manufacturing activities

has been ample in the Group's growth and led to the establishment of the Hero Cycles ColdRolling Division, Munjal and Sunbeam Castings,Munjal Auto Components and Munjal

Showa Limited amongst other component-manufacturing units. Then there were the

expansion into the automotive segment with the setting up of Majestic Auto Limited, where

the first indigenously designed moped, Hero Majestic, went into commercial production in

1978. Then came Hero Motors which introduced Hero Puch, in collaboration with global

technology leader Steyr Daimler Puch of Austria. Hero Honda Motors was established in

1984 to manufacture 100 cc motorcycles. The Hero Group also took a venture into other

segments like exports, financial services, information technology, which includes customer

response services and software development further expansion is expected in the areas of

Insurance and Telecommunication. The Hero Group's phenomenal growth is the result of


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constant innovations, a close watch on costs and the dynamic leadership of the Group

Chairman, characterized by a culture of entrepreneurship, of right attitudes and building

stronger relationships with investors, partners, vendors and dealers and customers.


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PROFILE

OF

HERO HONDA

Type public company BSE-HEROHONDA M

Founded January 19,1984 in gurgaon, Haryana,India

Headquarters Haryana, India

Key people Om Prakash Munjal, Founder Mr. Brijmohan Lall Munjal, ChairmanMr. Toshiaki Nakagawa, joint ManagingDirectorMr. Pawan munjal, Managing Director

Industry AutomotiveProduct Motorcycles ,scooters

Revenue U$ 2.8 billion

Website http//www.herohonda.com/site/home/home.asp

MILESTONES

Timeline of new releases

Hero's success saga contains an element of spirit and e nterprise; of achievement

through grit and determination, coupled with vision and meticulous planning.

1956-Hero Cycles Limited is established.

1961-Rockman Cycles Industries Limited established which the largest manufacturer ofbicycle chains and hubs is today.

1963-It pioneered bicycle exports from India - a foray into the international market.

1971-Highway Cycles was set up to meet the demands of Hero Cycles. It is today the largestmanufacturer of single speed and multi-speed freewheels.1975-Hero Cycles Limited became the largest manufacturer of bicycles in India.1978-Majestic Auto Limited was formed and the Hero Majestic Moped was introduced.

1981-Munjal Castings established.


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SWOT ANALYSIS

Lets analyze the position of Hero Honda in the current market set-up, evaluating its

strengths,weaknesses,threats and opportunities available.

STRENGHTS

Huge brand equity among customers.

Research and development- due to joint venture with Japanese giant- HONDA

Models/products in almost every bike segment.

Healthy growth in profits.

Ability to understand customer needs & wants.

Its after sales service.

Maintenance cost is low.

WEAKNESSES

Low cash reserves due to massive dividend ppayouts.

Virtual absence in the highly lucrative bike segements.

Import>31% of its spare parts requirements.

Slow to react to market changes- slow innovation- late entrants into the 125cc

segment

Too much dependence on few models.

OPPORTUNITIES

Discount & loans offered laed to great demand.

Ads appealing to youth can do wonders for the company.

THREATS

All major bike maker in the world are lining are up for india.

The growth in two-wheeler market is slowing down.

Low cash reserves.


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ANALYSIS OF BAJAJ AUTO AND HERO HONDA

Q1) which bike do you have?

Q2) Which model do you have?


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3) In which family income level do you fall?

4) For what purpose do you use your Motor Bike?


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5) How do you come to know about this motor bike?

6) Does Advertisement Influence your decision in choosing a motor Bike?


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Q7) If new Bike with good features comes in,then would you like to change your bike?


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CONCLUSION

1) Hero Honda is considered to be most fuel-efficient bike on Indian roads & have betterquality, higher resale as compared to Bajaj bikes.

2) Bajaj service and spare parts are available throughout India in local markets also andBajaj bikes have comparatively low maintenance cost in contrast to hero Honda bikes.

3) While buying a motorcycle, economy is the main consideration in form maintenance,cost fuel efficiency.

4) Majority of the respondent had bought their motorcycle more than 3 years.

5) Market leader Hero Honda has lost more than 3% of its market share in themotorcycle segment to its nearest rival Bajaj Auto.

6) Bikes such as Bajaj Pulsar,Hero Honda Hunk,Karizma are purchased by younggeneration 18 to 30 because they prefer stylish looks and rest of the models of HeroHonda are purchased more by daily users who needs more average of bikes than looks


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RECOMMENDATIONS

1) Bajaj should introduce some more models having more engine power.

2) Hero Honda should think about fuel efficiency in case of upper segment bikes.

3) More service centres should be opened for Hero Honda bikes

4) Maintenance cost and the availability of the spare parts should also be given dueimportance.

5) They also introduce some good finance/discount schemes for students.

6) The price should be economic.

Documents

Bajaj vs Herohonda1