PRESENTED BY VIMAL MOHAN

P

RESEARCH GUIDEDr ANITHA S

METHODOLOGYSecondary data

JournalsWebsites

Objectives of the StudyThe Impact of economic reforms on Indian Two wheeler

industry.The Current situation and also the future of Two wheeler

industry in India.Effect of Recession on two wheeler manufacturers.

The feeling of freedom and being one with the Nature comes only from riding a two wheeler. Indians prefer the two wheelers because of their small manageable size, low maintenance, pricing and easy loan repayments. Indian streets are full of people of all age groups riding a two wheeler. Motorized two wheelers are seen as a symbol of status by the populace. Thus, in India, we would see swanky four wheels jostling with our ever reliable and sturdy steed: the two wheeler.

•The history of the two wheelers in India dates back to the year 1955. •The 350 cc 'Bullet' manufactured by the Royal Enfield Company of United Kingdom was the first batch of motorcycles in India.•Enfield Bullet had a close competition with another sturdy bike named Rajdoot•The segment of motorcycles in India went through a tremendous change in the two wheeler market.•The main cause of the growth in the Two wheelers in India segment is the fuel efficient 4 stroke engine.

The first scooters in India were the Lambretta models manufactured by the Italian Innocenti Company in 1975.

Very effective in the urban set-up, as they could cleverly tackle the congested roads and streets.

The company sold the enterprise to the Government of India in 1975 and the Scooters India Limited was established.

This company introduced its first product known as the Vijai Super.

New companies emerged such as Bajaj Auto, LML Vespa(now changed to LML) and the public was offered with a wide array of options.

Bajaj Chetak, till today it remains one of the most successful brand to come out of the Bajaj stable.

Today newer models of two-wheeler are entering the market everyday, slowly pushing these names down the memory lane.

However names like Chetak, Rajdoot and Bullet will always find a mention in the history of two-wheelers in the country.

Factors for the growth of two wheelers in IndiaDifference between two-wheeler and passenger car

pricesThe average family income has increased The finance have become easier to access The reduction in taxes and duties Introduction of international standards in India The economic and fuel-efficient engines The teenager and the youth using more and more

motorcycles

Top two wheeler manufacturers in India

India's largest and the world's 4th largest two-wheeler maker

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

It is based in Pune, Maharashtra with plants in Akurdi and Chakan (near Pune),Waluj (near Aurangabad) and Pantnagar in Uttaranchal

The company is headed by Rahul Bajaj who is worth more than US$1.5 billion.

ModelsBajaj AvengerBajaj CT 100 Bajaj DiscoverBajaj Platina Bajaj Pulsar DTSi Bajaj Pulsar 200CCBajaj Wind 125Sonic DTSi

• Established in 1911 by Sri T.V. Sundaram Iyenger.TVS Motor Company's first launch was 50 cc Moped

TVS 50 in August 1980.First Indian company to introduce 100 cc Indo-

Japanese Motorcycles in India in 1984.Also the first Indian company to launch indigenous

scooterette in India in 1994.The manufacturing unit of TVS Motor is located at

Hosur and Mysore.

Models

Centra Fiero F2 Fiero FX Max 100/R Samurai ScootyScooty Pep Spectra

Star Star City Star DLX Suzuki Fiero Victor GLX Victor GX XL Super XL Super HD

Started production in January 2001. Its based in Japan with its headquarters in Tokyo.Manufacturing operations in 32 countries. Big players in the manufacturing of two wheelers

across the world.

Models

Unicorn Eterno Dio Honda Activa

Kinetic has launched India's first motoscooter in the form of Kinetic Blaze

Kinetic 'Luna‘ in 1972 usured in the era of mopeds into the country

Kinetic has three manufacturing facilities located at Goregaon Bhima, Ahmednagar and Pithampur

Kinetic motor began in 1984 with collaboration with Honda motor of Japan.

Kinetic motor positioned itself as a leading exporter of two wheelers to destinations like USA, Canada, Latin America, Europe, West Asia and South Asia.

Models

BlazeKinetic 4SKinetic HondaDX, ZXMarvelKinetic K4 100Kine

Kinetic King 100VelocityStrykerGf LaserBossAquila

On January 19th 1984 Hero Honda Motor Limited (HHML) was incorporated.

Leader in the Indian market with maximum sales.

Leader in the Indian market with maximum sales.

Models

Ambition CBZCD 100 SS CD Dawn CD 100 Deluxe Dawn Glamour Electric start Karizma

Passion Passion Plus Splendor Splendor + Street Dix Super Splendor ES Super Splendor KS

It came to india in 1949 with the launch of 350 cc Bullet

. In 1955 the Enfield India Company was formedIn 1994, March Eicher Group acquired Enfield India

Company and its name was changed to Royal Enfield Motors Ltd

The manufacturing of Royal Enfield is located at Tiruvottiyur in Chennai.

Models

Bullet 350 Bullet 500 Bullet ElectraS Bullet Electra 5S Lightening 535

Machismo A350 Machismo Standard Tarus Thunderbird

In November 1995 Yamaha Motor Corporation entered into a 50:50 joint venture with the Escorts group

In August 2001 Yamaha Motor India Pvt. Ltd. (YMI) was incorporated as a 100% subsidiary of Yamaha Motors Corporation.

YMI's manufacturing facilities comprises of 2 state-of-art plants at Faridabad (Haryana) and Surajpur (UP).

The infrastructure at both the plants supports production of motorcycles for the domestic as well as overseas market

ModelsCrux Crux rEnticer FazerG5Yd-125

LiberoLibero lxRx 135Rx-zYbx-125

Global playersHarley Davidson

Honda KawasakiDucatiYamahaSuzukiBMW

2003 - 2007 US Heavyweight New Registrations Share

US market share

2007 2006 2005 2004 2003

Harley Davidso

n

49.4% 50% 49.6% 50.2% 50.3%

Honda 14.2 15.1 16.6 18.7 18.4

Suzuki 12.5 12.9 12.4 10.2 9.8

Yamaha 9.2 8.6 8.9 8.7 8.5

Kawasaki

7.2 6.8 6.5 6.4 6.7

SALESOverall the industry sales of two-wheelers have grown by

15% from 6.57 million in 2004/2005 to 7.57 million in 2005/2006.

Annual sales of motorcycles in India expected to cross the 10 million mark by 2010.

The share of motorcycles have increased over the years.. The two-wheelers have penetrated 7% of rural house hold

and 24% of urban markets, thus it leaves an immense scope for the market to grow.

Segmental market share

The Indian two-wheeler industry has undergone a significant change over the past 10 years with the preference changing from scooters and mopeds to motorcycles.

The scooters segment was the largest till FY1998.The motorcycles segment that had witnessed high

growth became larger than the scooter segment in terms of market share for the first time in FY1999.

The motorcycles segment rise more than double its share of the two-wheeler industry.

Scooters are perceived to be family vehicles.Scooter sales declined sharply 2001, and

motorcycle sales reported a healthy growth.The past few years have witnessed a shift in

preference towards gearless scooters (that are popular among women) within the scooters segment.

Motorcycles, offer higher fuel efficiency, greater acceleration and more environment-friendliness.

Trends in Segmental Share in Industry Sales (FY1996-9MFY2005)

Shares of two wheeler manufacturers in industry salesHero Honda sales went up 4.31% for

September 2007 with sales of 314,537 units against 301,577 units sold last year.

In contrast Bajaj Auto’s sales slid by 23% in September - selling 232,496 units against 300,141 last year.

TVS sales fell 29% against last year - selling 115,091 units.

Hero Honda and Bajaj Auto carve up about 80% of the Indian motorcycle market.

The segment itself has an 85% of the overall two-wheeler market.

In the economy segment Bajaj is the leader with 46% of the market share with CT100 being the largest selling bike in this segment.

Hero Honda leads the executive segment with 67% market share with splendor and passion leading the market in this segment.

In premium segment there is a competition between Hero Honda and Bajaj.

Shares of Two-Wheeler Manufacturers in Industry Sales (FY2000-9MFY2005)

TRENDS IN THE TWO-WHEELER INDUSTRY

Companies raising capacity to meet the growing demand

Niche markets also witnessing intense competitionIncreasing focus on exports

  2000 2001 2002 2003 2004 CAGR 2000-04

9MFY2005

Scooter 20,188 25,625 28332 30116 53148 27.4 44832

Motorcycle 35,295 41,339 56,880 126122 187287 51.4 188807

Moped 27,754 44,174 18,971 23330 24234 -3.3 22739

Total 83,237 111,138 104183 179568 264669 33.5 256378

 2000 2001 2002 2003 2004 CAGR 

2000-04

9MFY2005

Bajaj Auto

14924 16112 28527 53366 90210 56.8 87225

HHML 10061 10324 13023 21165 39254 40.5 43441

HMSI 0 0 1293 10916 31414 n.a 27734

TVS 7265 6621 7765 9636 28093 40.2 36666

Yamaha 15197 20446 20321 45546 32906 21.3 27539

Others 35790 57635 32752 39053 42792 4.6 33773

Total 83237 111138 103681 179682 264669 33.5 256378

Effect of recession on two wheeler business

The global meltdown has impacted the sale of motorbike

High interest rates Reluctance of banks to offer two-

wheeler loansLarger-than-usual sum of down

payment

FUTUREThe total sale of two wheelers in India has touched

a figure of 7.86 million units by March, 2007, up 11.42% from the previous fiscal figures of 7.05 million. Production during the period reached 8.63 million units,

The production of two wheelers in India is expected to reach a staggering 17.85 million units by 2011-12, more than double of the current production level.

The two-wheeler production capacity is to reach 22.31 million units in 2011-12 compared with 10.78 million in 2006-07.

India is likely to export 1.39 million two-wheelers in 2011-12 compared with 590,000 in 2006-07.

Total investment for new capacity generation in two-wheeler segment is likely to be more than $2.2 billion (INR10, 000 crore).

Hero Honda, Bajaj Auto and TVS Motor remain the leading players in terms of sales and popularity of their two wheelers.

FINDINGSTwo wheeler business in India is on the path of

development.Recession has affected the industry up to an

extend but not as much as compared to other industry.

1 lakh car may be a threat for the market.India is one of the biggest markets in the two

wheeler business.Scope of global players to enter the market.