PRODUCT

Honda Siel Cars India Limited (HSCI) is a joint venture between the Honda Motor Company of
Japan and Siel Limited, a Siddharth Shriram Groupcompany. It currently is the 7th largest car
maker in India after Maruti Suzuki, Hyundai, Tata, Mahindra, Chevrolet and Ford. It was begun
in December 1995. The venture was begun with the aim of delivering Honda's passenger car
models and technologies to the Indian market. The total investment made by the company in
India till date is over Rs. 800 crores.[1]

The capacity was enhanced to 1,00,000 units annually in February 2008 . The capacity
expansion was necessitated by the excellent performance of all the Honda models, particularly
the growing demand for City in India. Several modifications were done by the company with the
objective of offering higher quality products to its customers, faster and quicker. The expansion
process also included expansion of the covered area in the plant, from 1,07,000 m². to 1,31,794
m².

HSCI currently produces the newly launched Honda Jazz, City, Civic and Accord models in India
and the premium SUV, CR-V is sold as a fully imported unit from Japan.The company operates
under the stringent standards of ISO 9001 for quality management and ISO 14001 for
environment management.
 Honda’s Operational practices show a great example of the innovations the Japanese
automobile manufacturers perform.

Add from presentation

USP

Honda Cars are a premium brand. it provides versatility, style and sporty drive etc in its
vehicles. Honda highlights new-age body line, quiet-smoother handling, cutting edge i-VTEC
engine technology, plush interiors and high-end security system. Thus Honda brand name also
adds as a usp to its products, cz brand name adds the factor of trust its customers have in
Honda cars.

SEGMENTATION
In business-to-business markets the aim of segmentation is similarly to arrive at clusters
of like-minded companies. There is a very strong pressure to use segmentation in
business-to-business markets to win a competitive advantage as there is often little to
 differentiate one product from another. Segmentation therefore links strongly with a
strategy to achieve a sustainable differentiated position.

n Type of industry :
n Organizational characteristics: autonomic
n Type of product & volume Their marketing strategies are therefore directed   towards developing
these high model volumes, hence the careful   attention that we have observed them giving to growth and
market   share
n Quality and Continuous Improvement
n Employee Driven “Kaizen”
n “Quality Circles”
n “Domestic Trouble Reports” (DTRs)
n MRP II and Web-based Ordering for Supplier Base as a whole
n Extent of Efficiency in Supply Chain
n Honda Trading “Soybean Example”
n New Honda Ridgeline Composite Bed/Box

n Financial Size:

Geographic location : HSCI's manufacturing unit was set up in 1997 at Greater Noida, Uttar
Pradesh with an investment of Rs. 450 crore. The green-field project is spread across 150 acres
(0.61 km2) of land (over 6,00,000 sq. m.).
n
n Purchase behavior/usage: Suppliers are involved with development and design of new
products Relationship is much like a partnership Requires an in-depth supplier
selection process

Classification

Segment Honda

Small

Premium Small

Mid Size

Premium Mid Size JAZZ

Executive CITY

Luxury ACCORD

SUV CRV

Models
[edit]Manufactured Locally

1. Honda City (Launched 1996)

2. Honda Accord (Launched 2001)
3. Honda Civic (Launched 2006)
4. Honda Jazz (Launched 2009)
[edit]Imported

3rd Generation Honda CR-V

1. Honda CR-V (Launched 2003)

[edit]Discontinued

None

[edit]Sales and Service Network

Honda Siel Cars India has 120 dealerships across 71 cities in 19 states and 3 Union Territories of India.
HSCI dealerships are based on the “3S Facility” (Sales, Service, Spares) format [3]. It plans to increase the
number of dealerships to 160 by 2014[4].

[edit]Sales performance
Honda Siel Cars India (HSCI) Ltd., leading manufacturer of premium cars in India, sold 55,884 units
during the period April '09 - February '10 as against 45,052 units during the same period last year
recording an increase of 24%.
SUPPLY CHAIN PROCESS

 Honda uses their economies of scale by working with their parts suppliers to order raw
materials in large quantities.

Structural Characteristics

 Also known as executional drivers that reduce operating costs and increase productivity

 Economy of Scale – All purchasing done by Honda Trading America Corp.

 Technology – Multipurpose machinery

 Capacity Utilization – Honda operates facilities in every major market they enter

Market Characteristics

 IT advancements

 3rdwave distribution software by Blinco Systems

 Assures parts quality, controls availability, guarantees delivery, provides

consistent materials pricing

 External factors

 Increasing oil prices effect transportation costs for all markets

Sc characteristics

 The key element for Honda is the flow of information with their suppliers
  12 steps:

 Initial contact, preparation/investigation of Honda parts, quotations, initial

plant visit, prototype development, testing and evaluation, mass production
quotation, preparation for mass production, trial run, Quality Assurance
Visit, agreement, purchase order

 In-house guest engineers

Co specific

 Strategic sourcing – “maximizing the value added through your external suppliers”

 Will chose highest supplier in overall service (not just lowest price)

 “Target pricing”

 Price table for parts

 If price cannot be met, Honda will work with supplier to get costs down

QCDDM

 Customer Satisfaction is top priority

 Accomplished through suppliers competitiveness in quality, cost, delivery,

development, and management (Q.C.D.D.M.)

 Quality

 Most important factor

 Must be built into production process

 Cost

 Suppliers are given target costs

 Cost reductions through own ideas, technology, improved productivity, along with
joint efforts with Honda in value engineering, and value analysis

 Delivery

 Suppliers must use just-in-time production system

 Development

 Uniqueness in design and specifications

 Helps create identity for Honda

  Management

 Positive attitude

 Measured by Q.C.D.D

 Feedback

 Grade cards for suppliers

Conclusion

 Demand for Suppliers is Derived

 High Customer Service Levels

 Very Important for Foreign Suppliers

 A Lot of Statistical Information

 Overall Unit Movement

 Supplier Specific Unit Movements

Comparison With Domestic Automakers

 More of a collaborative relationship

 High levels of information sharing

 Better information

 Lower inventory levels

 The financial health of Suppliers is extremely important

 Sharing of Financial prosperity & follies

Personal selling

Buying behavior

Supplying behavior

Communication methods:

Reverse auction
CRM PROCESS: CRM at HONDA MOTORS
Faced with increasing competition from abroad, a cyclical business
environment, and the challenge of a widely dispersed dealer network, Honda
Motors, a comprehensive customer relationship management (CRM) solution
designed specifically for companies in the automotive industry.
Seamlessly integrated with Honda Motors’ dealer management system and
SAP back-office applications, has delivered significant benefits across the
extended organization, including improved customer satisfaction, increased
revenue and productivity, and reduced costs.
To address its competitive challenges, Honda Motors began standardizing its
customer-facing business processes companywide,
• Laying the foundation for stronger dealer relationships,
• Improved operational efficiency and effectiveness,
• A better customer experience.
31
This has posed numerous challenges, as it involves working with 250 dealer
organizations and more than 1,600 locations staffed by more than 10,000
salespeople across India. In conjunction with its reengineering effort, Honda
has deployed a robust technology platform to improve the flow of information
across the enterprise.
• The platform consists of an innovative Dealer Management System,
which helps individual dealerships with everything from inventory
management and credit reporting to calculating commissions, and
• Honda Motors, a comprehensive Customer Relationship Management
(CRM) solution designed specifically for companies in the automotive
industry.
By tightly integrating with its dealer management system, Honda has
streamlined transactions and ensured that dealers capture customer data as
a part of their normal operations. The solution provides a 360-degree view of
customers to the extended organization, with appropriate visibility controls to
ensure that one dealer is not privy to information from another. To further
enlist dealer support, Honda Motors involved dealers throughout the solution,
configuration and deployment process. Integrating with their dealer
management system ensured that dealers would immediately see the value
in the solution. This has helped the company overcome the usual resistance
to change and gain rapid acceptance from dealers.
Implementation of CRM
Honda Motors has taken a phased approach to the implementation, with the goal of
achieving success in each phase before moving forward.
Phase 1: Focus on capturing customer and vehicle data and automating routine tasks.
Phase 2: Focus on leveraging data to improve customer interactions and streamline
product development and planning.
Phase 3: Focus on tuning the system and delivering additional value-added services to
customers.
Siebel Automotive has been closely integrated with a wide array of SAP back office
applications.
Functionalities of the Solution
• Inventory management and parts location
32
• Pricing and tax calculations adjusted for each dealer’s requirements.
• Comprehensive sales and reporting functionality built into Siebel Automotive
enables Honda to distribute sales targets to its dealers & roll up sales numbers across the
country.
• real-time data flow between the Siebel front end and SAP back end
• Provides multi organization support
• Can be deployed easily over the Internet
• Provides robust partner management capabilities
ELEMENTS OF CRM
CRM Vision
Honda Motors has more than 15,000 Honda Motors dealer personnel in over 1,000 dealer
locations. Its endeavor is to get closer to its customers by obtaining a 360–degree view of
the customer and design better offerings based on customer demands and feedback. The
objectives of the CRM program are:
• Improve its management effectiveness
• To meet increasing competition from global players
Overcome the difficulties of a widely dispersed dealer network of the way to apologize
for the error.
Simultaneously they provide technician who visit their home place in order to attend the
issues and rectify them to satisfaction level. Follow up calls are made to ensure that how
efficiently their problems were resolved.
Customer Valued Experience
The automotive industry is highly competitive world over. The customer in this industry
is pampered by various kinds of vehicular designs and value propositions like mileage,
comfort, style, brand name etc. Apart from the mentioned attributes of the product, what
customers would value is the after sales service. i.e., how the company listens to them
after sale of the vehicle. In short, customers want their vehicle to be taken care of by the
company post sale.
33
Customer segmentation for Honda Motors
The automobile industry is divided into two main segments- the commercial and utility
vehicle segment and the passenger car segment. Honda Motors is the only Indian
automobile company which has a large presence in both the commercial vehicle and the
passenger car segment.
Commercial vehicles In the commercial vehicle space Honda Motors is the market leader
with a market share of 60%. It ranks amongst the top 2 global automakers in terms of the
global sales of commercial vehicles. This shows the importance of this customer segment
in the overall scheme for HONDA motors
In the commercial vehicles segment the company has done a need based segmentation of
the customers. The customers are segmented based on tonnage of vehicles required as
well as the specific use of the vehicles. The company serves the customers with medium
and heavy vehicles, light vehicles, small vehicles and busses. Honda Motors also supplies
specially designed vehicles to the armed forces. On basis of specific use the company
segments the customers based on types of vehicles like rigid trucks, tractor trailers and
tippers.
.
Passenger Vehicles Honda motors is also a very important player in the passenger vehicle
segment of the automobile sector. The company entered the passenger vehicle segment in
late 1990s and enjoys around 16 % share in this segment.
In the passenger vehicle segment the main customer segmentation is based on the price of
the cars. Indian customers are highly discerning, educated and well informed. They are
price sensitive and put a lot of emphasis on value for money. Vehicles priced between Rs.
12,00,000 – 18,00,000 form the largest segment in the passenger car market.
The data about the sales of the cars in various segments is shown in the adjoining graph.
Honda motors also segments the customers based on the
type of vehicles they buy. Even in the passenger car
segment there are some big customers. Honda is very
popular among
elite section because of its good fuel efficiency and
performance blend. The SUVs from Honda are also very
34
popular with call centres to ferry their employees as they are very spacious and
comfortable.
HONDA MOTORS – HR and Organization for CRM
Executive Selection Scheme (ESS)
Honda Motors has always strived towards excellence both in its efforts towards total
integration as well as in recognising its talented employees. The Company is constantly
creating prestigious programmes to reward and retain its outstanding employees. The
Executive Selection Scheme is one such programme, which is highly sought after by
Honda Motors employees. It is a matter of pride and prestige to be a part of the ESS
selection process and emerge a winner.
ESS is a fast track programme for accelerated growth of high potential professionals.
This facilitates their early advancement to challenging and visible assignments through a
very systematic procedure.
The selection involves a 3 stage process:
* Written Test
* Power Interview
* Assessment Centre
Short-listed candidates are required to go through an interview with the executive
directors.
Candidates selected gain a huge lead in terms of promotion and learning. They are
promoted to Manager's level thereby saving almost 10 to 13 years of work time. The
successful candidates are relieved from their current jobs and put on various project
based training programmes under the guidance of senior managers in the Company. If the
candidates do not possess management education, they undergo a 4 months MEP at IIM,
Ahmedabad.
After successful completion of training the candidates are mandatorily rotated across
departments to acquire general management skills.
The ESS is a jewel in Honda Motors overall profile as it provides a platform for every
employee of the Company to perform and achieve maximum potential.
35
Implementation of IT and Technological Solutions at HONDA MOTORS
The highly respected Honda Motors Ltd. has a strong tradition of entrepreneurship. The
com¬pany’s business strategy calls for reaching beyond the borders of India to enter new
markets for its Accord, the innovative luxury sedan for the upper class.
One of the major drivers of success at Honda Motors Ltd. is its ability to fully exploit
infor¬mation technology to drive business goals. The company was an early adopter of
CAD and CAM systems to speed the design of the sedans. The company also uses Siebel
Systems to manage its vast customer relationship network and SAP® for all critical
business services, such as logistics, supplier relations management, customer relationship
management, human resources (HR), and finance.
IT is an integral part of every busi¬ness process from design to delivery and the power of
IT has been extensively leveraged for the sedan project. The design processes used more
digital content than ever before. State-of-the-art CAD and CAM services integrated
design across multiple disciplines, making it possible for our designers to harness and
benefit from their inherent ability to innovate. IT helped the company shrink the design
cycle time.
BSM tools from BMC Software played a key role in tracking and controlling all
components of IT services and automating the management of the IT infrastructure which
is vital to the design and planning for manufacture of the Civic as well as running day-today
business processes.
EXCELLENCE IN OUTSOURCING
Following its strategy of outsourcing noncore activities, TML has outsourced its IT
applications to HONDA Technologies Ltd. and its IT infrastructure to IBM.® The
outsourcing decision has proven to be a wise one. Honda Motors reaped significant
benefits through the outsourcing initiatives. TML was recognized in 2007 and conferred
the “SAP Ace” award for its SRM & Warehouse Management implementations. It also
received the “Uptime Championship Award” at the CIO 100 event in the same year.
36
Initially, the outsourcing approach posed several challenges. Technology silos were
performing adequately. However, a flexible service-oriented management framework was
required to link the silos and provide a comprehensive a view of the IT landscape
underlying a given business process.
To make this framework a reality, HMSI decided to adopt IT service management
concepts outlined in the ISO 20000:05 international standards, as well as best practices
outlined in the IT Infrastructure Library® (ITIL®) Version 3. In addition, the company
decided to establish a service-oriented management architecture that treated IT services
as assets and managed them on a lifecycle basis.
PUTTING BMC SOLUTIONS TO WORK
BMC has provided visibility into the entirety of services components across business
process chains. It has also integrated the various IT service management disciplines into a
single, unified solution.
HSCI started with the out-of-the-box capabilities of the BMC Remedy IT Service
Management Suite to establish a baseline of the IT application and infrastructure
landscape across all technol¬ogy pillars. The company used the applications’ embedded
ITIL-compatible controls —without modification — to define roles, responsibilities, and
authorities required in the support groups.
HSCI realized immediate benefits from the transition to the BMC applications, which
served as the software framework for managing the interactions and process relationships
among all the support groups managing the IT infrastructure underlying business
services. A service-oriented organizational structure was designed and configured in the
BMC Remedy applications.
A major innovation in the configuration is the use of logical architectural definitions for
the support group infrastructure. Logical role names for technical support staff login
allowed uniformity of definitions across the entire support community regardless of
whether the employee is internal to HSCI or outsourced.
The naming convention encompasses competency levels that enable the incident
coordinator to assign tickets based on complexity. This feature has real value in a
multisite support group where names by themselves mean very little. Service managers
can now plan staffing on the basis of competencies and have a transparent view of
support staff effort and load across locations.
37
A SINGLE POINT OF CONTACT FOR IT SERVICES
HSCI used BMC Remedy Service Desk and the end-user console to establish an
outsourced IT service desk that is the single point of contact between the IT user
community and the IT ser¬vice providers. This new service desk consolidated more than
25 different help desks across the country, making it simple and straightforward for users
to get assistance and report problems. This also helps to project a single unified face of IT
to the customers although multiple IT service providers are involved in the complete
services to the customer.
An innovative, segregation-of-duties approach ensures that the vendor providing a
particular ser¬vice is not also responsible for tracking and reporting on that service. This
was done by creating a special group within the IT service desk for ensuring satisfactory
closure of tickets An innovative, segregation-of-duties approach ensures that the vendor
providing a particular ser¬vice is not also responsible for tracking and reporting on that
service. This was done by creating a special group within the IT service desk for ensuring
satisfactory closure of tickets and moni¬toring status of paused tickets. HSCI is required
to be SOX compliant. Statutory requirements for ensuring segregation of responsibilities
were met by allocating responsibilities for recording, classification, and routing by one
vendor, and closing verification, customer satisfaction assurance, and performance
reporting by another.
CLIMBING THE IT SERVICE MANAGEMENT MATURITY LADDER
BMC solutions have helped HSCI make significant progress toward reaching the top of
the IT service management maturity ladder. The applications, which paid for themselves
within the first year, are delivering quantifiable benefits to HSCI.
The applications have brought greater efficiency to the IT environment, enabling the staff
to dra¬matically reduce the number of trouble calls. For example, calls related to
desktops are down 40 percent, calls from supplier relationship management are down 80
percent, and server support calls are down eight percent.
Most importantly, by keeping critical systems available and operating at peak
performance, the company reduced the development cycle for the sedan compared with
38
earlier platforms enabling the company to get this exciting new offering to market faster
and at a lower cost
LOYALTY PROGRAMS
CITY Circle
Honda Motors Privileges Program – CITY Circle
At Honda Motors, it is Endeavour to spoil you with superior quality of vehicles and
value-added services. With this in mind, Honda Motors have made an effort to enhance
your experience with your Indigo beyond the road. The benefits of becoming a member
of the CITY Circle range from getting special offers and discount coupons, interacting
with the Indigo community on a regular basis and being part of a group where you can
share your views, experiences and more.
Honda Motors offers you more than just a car. HONDA Motors offer you an experience
that will spoil you for more. Accessories for your car, world-class workshops with stateof-
the-art equipment and high-priority service by extremely qualified engineers are just
steps towards giving you a complete ownership experience. HONDA Motors provide you
with a lot of value-added services and timely information on what needs to be done to
keep your car in the best condition and looking new.
We also reward our customers with points made on purchases with the Empower Card - a
card that gives you several exclusive benefits from Honda Group companies and select
partners. Other privileges available to our customers include receiving information about
the latest happenings, service alerts, and special events. Our customers also have a chance
to get exclusive benefits such as loyalty, exchange and referral bonuses.
At Honda Motors, services and products are delivered courteously, quickly, efficiently
and to your satisfaction. Honda Motors hope you have a great experience with us. Honda
Motors promise to do our best to satisfy your needs to the best of our abilities.
Honda Club
Honda Motors offers you more than just a car. Honda Motors offer you an experience
that will change the way you look at your car. Accessories for your car, world-class
workshops with state of- the-art equipment, and high-priority service by extremely
qualified engineers are just steps towards giving you a complete ownership experience.
39
Honda Motors provide you with a lot of value-added services and timely information of
what needs to be done to keep your car in the best condition and looking new.
We also reward our customers with points made on purchases with the Empower card - a
card that gives you several exclusive benefits from Honda Group companies and select
partners. Other privileges available to our customers include receiving information about
the latest happenings, service alerts, and special events. Our customers also have a chance
to get special benefits such as loyalty, exchange and referral bonuses.
At Honda Motors, the best of services and products are delivered courteously, quickly,
efficiently, and to your satisfaction. Honda Motors hope you have a great experience with
us. Honda Motors promises to do our best to satisfy your needs to the best of our abilities.
Accessories and Service Coupons
Apart from the various accessories and service packages you will also receive several
offers and discounts on accessories and services. An offer coupon booklet is enclosed
along with this booklet.
Privileged Offers
We also run attractive retail offers for our car owners from time to time, in addition to
retail schemes applicable to others. These may include loyalty or exchange bonus on
additional purchase of Honda cars, or referral bonus if you convince a friend to purchase
your favorite car.
We look forward to a relationship that gets stronger with time. Honda Motors constantly
endeavor to change the ownership experience of every Honda owner and your
suggestions and feedback would not just encourage us, but also help us improve our
service standards in times to come. We’re sure you’ll enjoy the experience of owning and
driving one of the finest cars on the road, the CITY. Happy driving!