A

SUMMER REPORT
ON

HERO MOTOCORP

AT
V.S. PATEL COLLEGE OF ARTS AND SCIENECE, BILIMORA

SUBMITTED BY
RATHOD BHAVIN. T.
BBA (5TH SEMESTER)
(2020-2021)
 2

V.S. Patel College of Arts & Science, Bilimora.

Bachelor of Business Administration

CERTIFICATE

CLASS: - T.Y.B.B.A. Sem-5 ROLL NO.: 32

This is to certify that MR BHAVINKUMAR THOKARBHAI

RATHOD has successfully completed the project work entitled
AUTOMOBILE as the 5th Semester requirement for the degree of
Bachelor of Business Administration as per the requirements of Veer
Narmad South Gujarat University rules and regulations, during
academic year 2020-2021.

________________ ___________
Sign. of Project (Dr A.R. Bajaj)
Guide
(Prof Darshan
Desai)

Place: Bilimora.

Date:
Sign. of Examiner: _______________
 3

ACKNOELEDGMENT

I would like to express my gratitude towards to my prof. DARSHAN DESAI SIR

guiding me throughout the project. I also feel thankful and express my kind
gratitude towards our principal prof. Dr A.R. Bajaj for allowing me to conduct
department studies on HERO MOTOCORP. The mentioned project was done
under the supervision of the DARSHAN DESAI SIR. I thank all participants for
their positive support and guidance.

I feel thankful to the collage staff for giving me such a big opportunity. I believe
I will enroll in more such events in the in the coming future. I ensure that this
project was done by me and is not copied.

RATHOD BHAVIN THAKORBHAI

ROLL NO:- 32
 4

DECLARION

I their by declare that this project report entitled “HERO MOTOCOR” is result of my authenic
work carried out during the period of 6 weeks under the guidance/supervision of the staff of
BBA department of V.S. PATEL COLLEGE OF ARTS AND SCIENCE (BCA & BBA Self
Finance Course), BILIMORA. I also declare that the data provided in this report are to the best
of my knowledge. The study was carried out by me as a part of BBA programmed.

I further declare that the personal data and information received from all respondents during
the survey has not been submitted to any other university or institute for any other purpose and
it is used for academic purpose only.

BHAVIN RATHOD
 5

INDEX
SR PARCTICULAR PAGE
NO. NO.
1 Industrial scenario 07
1.1 History/ working of the sector 08
1.2 Future of automotive 10
1.3 Overall working of the sector 14
1.4 Major player in the sector 15
1.5 GDP contribution by that sector 20
1.6 Covid-19 impact on Hero automotive 21
industry
1.7 Global prospective 22
1.8 summary 25

2 Company profile 26
2.1 Name and location of company 27
2.2 Name and location of other branches 28
2.3 Year of establish 29
2.4 Brief history 30
2.5 Name of founder of company 33
2.6 Vision / mission statement 34
2.7 Organization structure 35
2.8 Board of advisors 36
2.9 SWOT analysis of the company 37
2.10 Any other specific details 40
2.11 10 year challenge if company logo 41
2.12 Product life cycle 43

3 Financial department 46
3.1 Profit and loss account 47
3.2 Final balance sheet 48

4 Marketing department 50
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4.1 List of products 51

4.2 Specific distribution channel 52
4.3 Market segment 53
4.4 Positioning strategies 56
4.5 Promotion tools 56
4.6 Pricing method 57

5 Human resource department/personal 58

department
5.1 Recruitment & selection process 59
5.2 Number of employees 60
5.3 Training and methodology 61
5.4 Employees safety mechanisms 62
5.5 Wages and salary administration 63

6 Production department 64
6.1 Raw material 65
6.2 Turn over 65
6.3 Product produce 65
6.4 Service provided 66

7 Conclusion 67

8
7
8

• Industrial/Sectoral Scenario

• History

• The automotive industry began in the 1860s with hundreds of manufacturers that
pioneered the horseless carriage. For many decades, the United States led the world in
total automobile production. In 1929, before the Great Depression, the world had
32,028,500 automobiles in use, and the U.S. automobile industry produced over 90%
of them. At that time, the U.S. had one car per 4.87 persons. After 1945, the U.S.
produced about 75 percent of world's auto production. In 1980, the U.S. was overtaken
by Japan and then became world leader again in 1994. In 2006, Japan narrowly passed
the U.S. in production and held this rank until 2009, when China took the top spot with
13.8 million units. With 19.3 million units manufactured in 2012, China almost doubled
the U.S. production of 10.3 million units, while Japan was in third place with 9.9 million
units. From 1970 (140 models) over 1998 (260 models) to 2012 (684 models), the
number of automobile models in the U.S. has grown exponentially.

• Early car manufacturing involved manual assembly by a human worker. The process
evolved from engineers working on a stationary car, to a conveyor belt system where
the car passed through multiple stations of more specialised engineers. Starting in the
produced largely with automated machinery.

• Two-Wheeler Industry in India entered the manufacturing course in the early 1950s
when Automobile Products of India (API) started manufacturing scooters in India. In
1948, Bajaj Auto began importing Vespa scooters in India. In 1960, Bajaj started a shop
to manufacture scooters in India in collaboration with Piaggio of Italy. The
collaboration ended in 1971.

Even the motorcycles segment also started with three manufacturers viz Enfield, Ideal
Jawa, and Escorts. In the ’80s the market for two-wheeler motorbikes opened up and it
buzzed the market by storm. It resulted in the expansion in the market where TVS
Suzuki and Hero Honda occupied the top two spots in the Indian motorcycles segment.
Since then, throughout the last four decades, we have seen splendid growth in the Indian
9
two-wheeler segment year on year basis. Moving forward from starting in the 1950s to
the current time, India is the largest market for the two-wheeler segment right now.
10

• Future of automotive (Electric bike)

(History)

The early history of electric motorcycles is somewhat unclear. On 19 September 1895,

a patent application for an "electrical bicycle" was filed by Ogden Bolton Jr. of Canton
Ohio. On 8 November of the same year, another patent application for an "electric
bicycle" was filed by Hosea W. Libbey of Boston.

At the Stanley Cycle Show in 1896 in London, England, bicycle

manufacturer Humber exhibited an electric tandem bicycle. Powered by a bank of
storage batteries, the motor was placed in front of the rear wheel. Speed control was by
a resistance placed across the handlebars. This electric bicycle was mainly intended for
racetrack use.

The October 1911 issue of Popular Mechanics mentioned the introduction of an electric
motorcycle. It claimed to have a range of 75 miles (121 km) to 100 miles (160 km) per
charge. The motorcycle had a three-speed controller, with speeds of 4 miles (6.4 km),
15 miles (24 km) and 35 miles (56 km) per hour.

• (future)

The government in India aims to make arrangements and incentive to that the battery
vehicles will encourage more people to contribute to 25% of all vehicle’s registration
by 2024. Currently, electric vehicles contribute only 0.29% of the overall registration
in India for this happens, a two-prong approach must be set in nation. Firstly, India
needs to be genuinely EV-ready by setting up with proper infrastructure and the
necessary technology to support electric vehicles manufacturing.

Provision must be put in place so that the old vehicles can be converted into hybrid
electric vehicles through retrofitting to reduce pollution level.
11

• National Electric Mobility Mission Plan 2020(NEMMP)

Government of India (GoI) launched the National Electric Mobility Mission Plan
(NEMMP) 2020 in 2013. The National Electric Mobility Mission Plan 2020 is one of
the most important and ambitious initiatives undertaken by the GoI that has the potential
to bring about a transformational paradigm shift in the automotive and transportation
industry in the country. Some of the key objectives of the National Electric Mobility
Mission Plan 2020 are: • To encourage reliable, affordable and efficient xEVs (hybrid
and electric vehicles) that meet consumer performance and price expectations through
government-industry collaboration. • Promotion and development of indigenous
manufacturing capabilities, required infrastructure, consumer awareness and
technology are additional objectives of NEMMP 2020. • India to emerge as a leader in
the two-wheeler and four-wheeler xEV market in the world by 2020, with total xEV
sales of 6-7 million units thus enabling the Indian automotive industry to achieve global
xEV manufacturing leadership and contributing towards national fuel security. • Target
of putting 6 million electric & hybrid vehicles per year on road by 2020 under NEMMP
2020.
12

• Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles

in India (FAME)

Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles scheme was
launched in 2015 under National Electric Mobility Mission Plan (NEMMP) with the
objective to support hybrid/electric vehicles market development and manufacturing
eco-system. The overall scheme is proposed to be implemented over a period of 6 years,
till 2020. The scheme has 4 focus areas i.e., I. Technology development II. Demand
Creation, III. Pilot Projects and IV. Charging Infrastructure. The FAME India Scheme
is aimed at incentivizing all vehicle segments i.e., 2-Wheeler, 3-Wheeler Auto,
Passenger 4-Wheeler Vehicle, Light Commercial Vehicles and Buses. The scheme
covers Hybrid & Electric technologies like Mild Hybrid, Strong Hybrid, Plug in Hybrid
& Battery Electric Vehicles. FAME is designed to implement in a phased manner.
Phase I of the FAME-India Scheme was initially proposed for two years viz. FY15-16
and FY16-17 but was extended thrice for six months up to September 30, 2018. In
September 2018, the government further extended the phase 1 of the FAME India
scheme by another six months till March 2019 or till its second phase is approved. The
government has withdrawn benefits available to conventional battery vehicles. As per
a notification by Heavy Industries Ministry, the incentives under the extended scheme
from October 1 will be available only for registered vehicles. Approximately 2,18,625
Electronic Vehicles were ‘promoted’ by FAME I till July 2018. In December 2017, The
Government of India shortlisted 11 cities to have electric vehicle based public
transportation systems under this scheme. The shortlisted cities are Delhi, Mumbai,
Ahmedabad, Bengaluru, Jaipur, Lucknow, Hyderabad, Indore, Kolkata, Jammu and
Guwahati.
13

• Safety

Safety is a state that implies to be protected from any risk, danger, damage, or cause of
injure. the automotive industry, safety means that users, operators or manufacturers do
not face any risk or danger coming from the motor vehicle or its spare parts. Safety for
the automobiles themselves, implies that there is no risk of damage.

Safety in the automotive industry is particularly important and therefore highly

regulated. Automobiles and other motor vehicles have to comply with a certain number
of regulations, whether local or international, in order to be accepted on the market. The
standard ISO 26262, is considered as one of the best practice frameworks for achieving
automotive functional safety.

In case of safety issues, danger, product defect or faulty procedure during the
manufacturing of the motor vehicle, the maker can request to return either a batch or
the entire production run. This procedure is called product recall. Product recalls
happen in every industry and can be production-related or stem from the raw material.
14

• Overall working of sector

Domestic automobiles production increased at 2.36% CAGR between FY16-20 with

26.36 million vehicles being manufactured in the country in FY20. Overall, domestic
automobiles sales increased at 1.29% CAGR between FY16-FY20 with 21.55 million
vehicles being sold in FY20.

In FY21, the total passenger vehicles production reached 22,652,108.

Overall, production of passenger vehicles, three wheelers, two wheelers and

quadricycle reached 1,875,698 units in April 2021.

Two wheelers and passenger vehicles dominate the domestic Indian auto market.
Passenger car sales are dominated by small and mid-sized cars. Two wheelers and
passenger cars accounted for 80.8% and 12.9% market share, respectively, accounting
for a combined sale of over 20.1 million vehicles in FY20. Two-wheeler sales stood at
995,097 units, while passenger vehicle sales stood at 261,633 units in April 2021.

Overall, automobile export reached 4.77 million vehicles in FY20, growing at a CAGR
of 6.94% during FY16-FY20. Two wheelers made up 73.9% of the vehicles exported,
followed by passenger vehicles at 14.2%, three wheelers at 10.5% and commercial
vehicles at 1.3%.

EV sales, excluding E-rickshaws, in India witnessed a growth of 20% and reached 1.56
lakh units in FY20 driven by two wheelers. According to NITI Aayog and Rocky
Mountain Institute (RMI) India's EV finance industry is likely to reach Rs. 3.7 lakh
crore (US$ 50 billion) in 2030. A report by India Energy Storage Alliance estimated
that EV market in India is likely to increase at a CAGR of 36% until 2026. In addition,
projection for EV battery market is forecast to expand at a CAGR of 30% during the
same period.
15

• Major player in the sector

1:- Bajaj

2:- Mahindra

3:- Honda

4:- Yamaha motors

5:- Suzuki

1:- Bajaj

Bajaj auto limited is an Indian multination two-wheeler and three wheeler

manufacturing company based in Pune, Maharashtra. It manufacture company based
on auto rickshaws. Bajaj auto is a part of the Bajaj group. It was founded by Jamnalal
Bajaj in Rajasthan in 1940s.

Founded:- 29 November 1945

CEO:- Rajiv Bajaj (April-2005)

Headquarter:- Pune

Revenue :- US$ 4.2 billion

 16

2:- Mahindra
Mahindra two-wheeler limited is a group venture owned by Mahindra & Mahindra limited,
which manufacture scooters and motorcycle. Mahindra two-wheeler limited was founded in
2008, when Mahindra & Mahindra limited acquired the business assets of kinetic motor
company limited. MTWL has partnered with Taiwan saying industry limited company to help
developed its scooter portfolio, and with Italy based engines engineering for research and
product design.

Founded :- 2008
Headquarters :- Pune
CEO:- Anish shah
 17

3:- Honda Motorcycle and Scooter India Pvt .Ltd

Honda Motorcycle and Scooter India Pvt. Ltd. (HMSI), a 100% subsidiary of Honda Motor
Company Ltd., Japan, in 1999. Despite being one of the youngest players in the Indian two-
wheeler market, Honda has become the largest two-wheeler manufacturer as well as
the second-largest two-wheeler company in India.

CEO:- Gaku Nakanishi

Founded:- 1999
Headquarter :- Gurgaon, Haryana, India
Customer service no: - 124229091119
Revenue: - 16,593.87 crore
 18

4:- Yamaha motors India

Yamaha motors made its initial foray into India in 1985 as a joint venture. In august 2001, it
became a 100% subsidiary of Yamaha motors. The Indian subsidiary of YMC came into its
parent form of in 2008, when it formed agreement with Mitsui & co ltd. And started to be
known as ‘Yamaha motors India PVT. LTD.

Founded :- 1985
CEO :- Hiroaki Fujita
Headquarter:- Uttar Pradesh
Revenue :- 6014.96 crore
Customer service no :- 06354020253
 19

5:-Suzuki
Suzuki motorcycle India privet limited is a subsidiary of Suzuki motors corporation, Japan
where in we are having the same manufacturing philosophy of value packed products right
from the inception. SMIPL will be manufacturing two wheelers best suited for the value in
India customers covering all segments.

CEO:- Sanjay Singh

Founder:- Michio Suzuki
Revenue :- 1850 crore
20

• GDP contribution by that sector

The Automotive sector in India is valued at $93 billion currently and is growing at a
steady pace. The automotive industry contributes a whopping 49% of India’s
manufacturing GDP. In 2018, the Automotive Sector contributed to 7.5% of India’s
total Gross Domestic Product (GDP). While this percentage dropped to 7% in the
current year, owing to COVID-19, new emission norms and the economic downturn,
experts believe that it may show an increase towards the end of this year. From March
2020 to April 2020, all automotive manufacturers and dealers were shut down for a
period of 40 days, further contributing to the decline in GDP.

As a result, the GDP, which saw an increasing trend began to feel the pinch of an
unexpected and unforeseeable downfall.
21

• Covid-19 impact on automotive industry

What started as a small fire in September 2018—a dip in sales of CVs after the
regulatory change in the axle-load norms—turned into a full-blown conflagration, at a
scale not experienced in the last two decades, as fundamental economic challenges
roiled the Indian automotive industry. Credit availability fell, demand slowed
(especially in infrastructure and mining), and discretionary spending dropped, all of
which contributed to a decline in auto sales. In early 2020, just as the industry was
expected to recover, the COVID-19 pandemic introduced challenges that hurt demand
and interfered with the automotive industry’s deeply intertwined supply chains.

More recently, however, the situation has looked brighter. In late 2020, government
travel restrictions eased, India’s harvest was good, and the festive season stimulated
demand in some high-volume segments. Both 2Ws and PVs showed a recovery in
month-over-month sales during that time.

Despite the ongoing challenge of COVID-19, the Indian automotive industry seems to
be overcoming most of its challenges, and many are now in the rear-view mirror. The
sector is also benefiting from new tailwinds, such as global supply-chain rebalancing,
government incentives to increase exports, and technology disruptions that create white
spaces. These developments will help create opportunities at all levels of the automotive
value chain.

Industry participants are now beginning to see a clear highway, where they can push on
the gas, accelerate, and go into a higher gear. From our research, we have distilled a set
of imperatives and enablers that industry participants must understand as they attempt
to fast-track their value-creation trajectories.

While the Indian automotive industry has faced many recent challenges, including the
devastating COVID-19 pandemic, its growth potential is clear. In fact, the sector is
expected to account for 65 million new jobs within India by 2026 as companies increase
production. To help domestic and international players in India capture new opportu-
nities as the market expands, we examined the current state of the country’s automotive
sector and identified imperatives and enablers for success.
22

• Global prospective

International Markets

In Europe, the restructure process is characteristic by the shift east with the new EU
member states in central and East Europe (CEE) acting as the western’s pressure value
against a background of stagnating sales, rising raw material costs, increased
competition from Asian automakers access to less costly labour and new customers,
and it allows new entrants, such as Hyundai and kia, to compete without legacy costs.
The net effect has been a rebalancing of automakers footprints in the region with
western Europe losing 1.5 million in capacity since 2000, while CEE countries will
have added 1.8 million unites of capacity by 2009.

European union outlook

Despite a short period of contraction from 2000 to 2003, Western Europe has enjoyed
considerable stability since the late 1990s, with sales hovering around the 14.5 million
mark in the mid-2000s. A lack of dynamic growth is a feature of a mostly mature market
such as Western Europe, where replacement cycles and the prevailing economic
situation drive demand. Economic growth in countries such as Poland, the Czech
Republic, Hungary and Slovakia, as well as Romania (joined 2007), has spurred a boom
in sales volumes. The star performer has been Romania, where sales rose more than 25
percent in 2007-08, thanks to the improving economic situation and the rollout of the
Dacia Logan-exactly the type of low-cost car designed to boost sales in emerging
markets. Poland also seems to be reaching its potential, with sales increasing almost 23
percent year-on-year and totalling 293,000 in 2007.

In Western Europe, a mosaic of factors influences the new car market. In Germany,
the impact of the 3 percent increase in WATT continues to hold the German market
back, so that despite a high average vehicle parc age and increasingly positive economic
news, sales in 2007 were down almost 10 percent from 2006. Of the other big-five
markets, Spain also has moved into the negative, as the country’s construction-driven
23
economic boom ended and consumer confidence declined. Italy, France and the UK
posted above-average year-on-year growth for 2007, with Italy, in particular
performing well , thanks in part to part to part a raft of new vehicles introduction from
domestic.

• CHINESE AND INDIAN BRANDS TO GAIN MARKET SHARE

Market share expectations continue to shift in favour of emerging Asian and mature
Japanese and Korean brands; U.S. brands are expected to perform worst. Year on year
Chinese brands have moved from second to first place in market share expectations,
and Indian brands from fourth to second place, relegating Toyota from top position to
third. Expectations of Honda’s market share have grown, as have expectations for many
European brands. Meanwhile, expectations for General Motors, Ford and Chrysler have
declined further from an already low level, with 63 percent of respondents expecting
Ford to lose market share, 66 percent for General Motors and 69 percent for Chrysler.
On a regional basis, EMA companies are markedly more optimistic on market share
expectation than companies in the Americas or ASPAC - and in particular, they are
more optimistic on the prospects for European brands (more than half of EMA
companies see market share increases for VW and BMW). Companies believe that even
when China and India are discounted, emerging markets will still grow faster than any
other region. Expectations of growth over the next three 48 years in markets outside
China and India are globally well-distributed. Expectations are strongest for Central
and South America, reflecting the relative resilience of Brazilian 36 demand as
economies elsewhere turns down. Nevertheless, a significant minority of respondents
also expect strong growth in the Middle East and Africa, and again in 24 Russia and
Ukraine.

• GROWTH MARKET BY FOREIGN DIRECT INVESTMENT

Drivers of future cross-border automotive deals will likely include the arrival of new
global players, emerging market growth, and currency fluctuations. In many cases,
automotive companies in emerging nations are quickly becoming global players
24
looking for increased access to global customers, markets, and technology. Examples
in recent deals include India’s Tata and Mahindra & Mahindra, China’s Chery and
SAIC, and Russia’s Russian Machines. This trend is likely to feed cross-border deal
flow over the next several years. In turn, companies from developed nations seeking to
gain further access to the quickly growing markets in the BRIC countries are also likely
to be a factor in future cross-border deal activity. This could be especially true of
component suppliers who are seeking proximity to local VMs. There were early signs
of this in 2007 including Cummins’ purchase of the remaining shares of Tata Holset (a
joint venture founded to produce diesel engines in India) and Bosch’s increased
investment in Motor Industries, an Indian based component supplier. Finally, the
weakening of the US dollar versus global currencies in 2008 vs. 2007 is likely to
encourage bargain hunting in the US. This trend is already materialising in early 2008
as interest in US automotive assets increases. Overall, the currency situation could lead
to a significantly larger net deal deficit for the US in 2008 vs. 2007, including large net
deal surpluses from Asia, Row, and potentially Europe.
25

• Summary

The automotive industry is a pillar of Indian economy and a key driver of

macroeconomic growth and technological advance. Currently, the automotive industry
contributes more than 7% to the total GDP and provides employment to about 32
million people, directly and indirectly. Strong domestic demand coupled with
supportive government policies have led to the Indian automotive industry climbing up
the ranks be one of the global leaders.

Just like many other countries, the Indian auto industry is set to witness major changes
in the form of electric vehicles and intelligent transport system with aims to alleviate
existing concern including traffic congestion, fuel, dependency, air & noise pollution
etc. in march 2016, the government of India set the country ambition target to have
100% electric vehicles fleet on road by 2030. Keeping in mind, the government of India
has to been taking various initiatives to promote faster adoption of electric vehicles.

Subsequent, multiple state government have been providing incentive to attract electric
vehicles manufacturing in their state, and to fast-track adoption of EVs. Karnataka
became the first Indian state government to introduce an electric vehicle policy in 2017.
The government of Maharashtra, Andhra Pradesh, Telangana, Uttar Pradesh and
Uttarakhand have also either unveiled policy or are framing draft policies to support
Gol’s, vision to have 100% Electric vehicles by 2030.
26
 27

Company profile
Hero Motor crop

Type Public company

Industry Auto motive
Founded 19th January 1984
Founder Brij Mohanlal Munjal
Headquarter New Delhi
Key people Pawan Lal Munjal

Name and location of company

Hero MotoCorp limited is the world’s largest manufacturing of two-wheelers. The company
has four manufacturing facility namely Dharuhera and Gurgaon in Haryana Haridwar in
Uttarakhand and Neemrana in Rajasthan. The company is based on New Delhi India.

Name and location of other branches

Hero MotoCorp has a total 5 manufacturing plant in India
1:- Haridwar (Uttarakhand)
2:- Dharuhera(Haryana)
3:- Gurgaon(Haryana)
4:- Neemrana(Rajasthan)
5:- Vadodara (Gujrat)
 28

Hero MotoCorp branches

Hero MotoCorp has sale and service network with over 6,000 dealership and service points
across the India.
 29

Year of establish
19th January 1984 at Dharuhera.
30

• Brief History

Hero Honda started its operations in 1984 as a joint venture between Hero
Cycles (sometimes called Hero Group, not to be confused with the Hero Group food
company of Switzerland) of India and Honda of Japan. In June 2012, Hero MotoCorp
approved a proposal to merge the investment arm of its parent Hero Investment Pvt.
Ltd. with the automaker. This decision came 18 months after its split from Hero Honda.

"Hero" is the brand name used by the Munjal brothers for their flagship company, Hero
Cycles Ltd. A joint venture between the Hero Group and Honda Motor Company was
established in 1984 as the Hero Honda Motors Limited at Dharuhera, India. Munjal
family and Honda group both owned 26% stake in the Company. During the 1980s, the
company introduced motorcycles that were popular in India for their fuel economy and
low cost. A popular advertising campaign based on the slogan 'Fill it – Shut it – Forget
it' that emphasised the motorcycle's fuel efficiency helped the company grow at a
double-digit pace since inception. In 2001, the company became the second largest two-
wheeler manufacturing company in India and globally. It maintains global industry
leadership to date. The technology in the bikes of Hero MotoCorp (earlier Hero Honda)
for almost 26 years (1984–2010) has come from the Japanese counterpart Honda
31

• Termination of the Honda joint venture and renaming

By December 2010, the board of directors of the Hero Honda Group had decided to
terminate the joint venture between Hero Group of India and Honda of Japan in a
phased manner. The Hero Group would buy out the 26% stake of the Honda in JV Hero
Honda. Under the joint venture Hero Group could not export to international markets
(except Nepal, Bangladesh and Sri Lanka) and the termination would mean that Hero
Group could now export. From the beginning, the Hero Group relied on their Japanese
partner Honda for the technology in their bikes.

The Japanese automaker exited the joint venture through a series of off-market
transactions by giving the Munjal family—which held a 26% stake in the company—
an additional 26%. Honda, wanting to focus only on its independent fully owned two-
wheeler subsidiary—Honda Motorcycle and Scooter India (HMSI)—, exited Hero
Honda at a discount and get over ₹6,400 crore (equivalent to ₹120 billion or
US$1.6 billion in 2019) for its stake. The discount was between 30% and 50% to the
current value of Honda's stake as per the price of the stock after the market closed on
16 December 2010.

The rising differences between the two partners gradually emerged as an irritant.
Differences had been brewing for a few years before the split over a variety of issues,
ranging from Honda's reluctance to fully and freely share technology with Hero (despite
a 10-year technology tie-up that expired in 2014) as well as Indian partner's uneasiness
over high royalty pay-outs to the Japanese company. Another major irritant for Honda
was the refusal of Hero Honda (mainly managed by the Munjal family) to merge the
company's spare parts business with Honda's new fully owned subsidiary, HMSI.

As per the arrangement, it was a two-leg deal. In the first part, the Munjal family, led
by Brij Mohan Lal Munjal group, formed an overseas-incorporated special purpose
vehicle (SPV) to buy out Honda's entire stake, which was backed by bridge loans. This
SPV was eventually thrown open for private equity participation, and those in the fray
32
included Warburg Pincus, Kohlberg Kravis Roberts (KKR), TPG, Bain Capital,
and Carlyle Group.

• Formation of Company

The name of the company was changed from Hero Honda Motors Limited to Hero
MotoCorp Limited on 29 July 2011. The new brand identity and logo of Hero
MotoCorp were developed by the British firm Wolff Olin’s. The logo was revealed on
9 August 2011 in London, to coincide with the third test match between England and
India. Hero MotoCorp can now export to Latin America, Africa and West Asia. Hero
is free to use any vendor for its components instead of just Honda-approved vendors.
On 21 April 2014, Hero MotoCorp announced its plan on a ₹254 crore (equivalent
to ₹327 crore or US$46 million in 2019) joint venture with Bangladesh's Nitol-Niloy
Group in the next five years to set up a manufacturing plant in Bangladesh. The plant
started production in 2017 under the name “HMCL Niloy Bangladesh Limited". Hero
MotoCorp owns the 55% of the manufacturing
company and rest 45% is owned by Niloy Motors (A subsidiary of Nitol-
NiloyGroup). Hero also updated its 100cc engine range in 2014 for 110cc bikes except
Hero Dawn.
 33

Name of founder of company

Founder: - Late Dr. Brij Mohanlal Munjal

34

• Vision Statement

The story of company began with a simple vision – the vision of a mobile and
empowered India. Hero MotoCorp Ltd., Company’s new identity, reflects commitment
towards providing world class mobility solution with renewed focus on expanding
Company’s footprint in the global arena.

• Mission Statement

Hero MotoCorp’s mission is to be become a global enterprise fulfilling its customer’s

needs and aspiration for mobility.
Setting benchmark in technology, styling and equality so that it coverts customer into
brand advocate.
35

• Organization structure

PAWAN
MUNJAL
(CEO)

NEERJA NIRANJ
SHARM AN
A GUPTA
(COMPA (CFO)
NY
SECRAT
ARY)
SANAJY
BHAN MIKE
NAVEN VIKRAM (HEAD- CLARK
MALO
CHAUH BHASKA LE GLOBAL (COO)
AN R MASSIO BUSINR
N SS)
(HEAD- (EXECU
SALES & TIVE (HEAD-
AFTER DIRACT STRATE
SALES) ORE) GY AND
GLOBAL
PRODUC
T
PLANNI
NG
36

• Board & Advisors

PRADEEP
DINDODIA
(NON -
EXECUTIVE
DIRCTORE)

M.
DAMODARAN
(NON-
EXE.INDEPEN
DENT
DIRECTOR

VIKRAM S.
KASBEKAR JAGMOHAN TINA TRIKHA
SINGH RAJU
(EXE-DIR & B.S DHANOA (NON-EXE &
CHIEF (NON-EXE & INDEPENDEN
(DIRECTOR) INDEPENDEN
TECHNICAL T DIRE)
OFFICER) T DIRE)
 37

• SWOT analysis of the company

• Strengths

Strength inherent capability of organization it can be used to gain strategic advantage

over its competitors.

Strengths: -
1:- Best price
2:- Lots of Inventory
3:- Exclusive deal with big brand name
4:- Recently rebuilt website
5:- Increased in export level
6:- Ability to understand customer needs & wants
38

• Weaknesses
Is an inherent limitation of organization. Which creates strategic disadvantage

1:- Lack of innovation

2:- Global exports

3:- Decline service quality

• Opportunities

An opportunity is favourable condition in the company environment.

1:- New advertisement

2:- Growing industry

3:- Expansion of product line

4:- Electric two-wheeler

• Threats

Is an unfavourable condition of the company. Which cause a risk, damage of

organization position.

1:- Strong competition

39

2:- Public transport infrastructure

3:- Less skilled labour

4:-Lack of updating technology

40

• Any other specific detail

The 2006 Forbes list of the 200 world’s most respected companies had Hero Honda
Motors ranked at #108

The brand trust report published by trust research advisory has ranked Hero Honda in
the 7th position among the most trusted brand in India.

It received the ‘best value for money bike maker’ and ‘best advertisement’ in two-
wheeler category at the auto India best brand awards 2012.

World’s most fuel-efficient bike.

Ranked no 1 brand in auto(two-wheeler) category in brand equity “the most trusted

brand”.

“Most recommended two-wheeler brand of the year” awarded by CNBC awaaz.

41

• 10 year difference about company logo

LOGO

One of the most the most famous motorbikes manufacture has a short and modest visual
identity history. Its logo was redesigned just once after it was created, keeping the
signature brand’s colours.

1984-2011
 42

But in 2011 Honda decided to leave the brand and the need for the new corporate identity
occurred.

2011-today

This is the difference between logo

 43

• Product life cycle

Introduction

Hero Honda passion is a Motorcycle manufactured in India by hero Honda. It is one of the
largest selling motorcycles, second only to hero Honda Splendor. Passion debuted in the year
2001.

Its graphic and colours were first refreshed in the year 2003 and it was rechristened passion
plus. Its graph were again update in the year 2008 and how black alloy wheels are standard
with an all black engine.
 44
The engine is a 97.2cc air cooler four stroke single cylinder. The chassis is a tubular double
cradle type. Although it is under 100 cc, it is market as am executive class bike due to its styling
and price.

• Decline

In the stage the sale begin to decline as the market becomes saturated the product
becomes technologically obsolete or customer taste change. If the products had
developed brand loyalty the profitability may be maintained longer , nit costs may
increased. The customer who take up products in this stage are laggards and
competition also decline . the company now takes up the step to phares out weak
product. Distribution of the products in this stage is selective with cut down pf price.

• Diffusion of innovation

Diffusion of innovation theory. Developed by E.M. Rogers in 1962, is one of the oldest
social science theories. It originated in communication to explain how, over time an
idea or products gain moment and diffuses through a specific population or social
system adopt a new idea., behaviour or products. Adoption means that a person must
person dose not something differently than what they had previously. The key to
adoption is that the person must have perceive the idea, behaviour, or product as a new
or innovation. It is through this that diffusion is possible.

• Inventory

They are technology enthusiastic; they are venture and enjoy thinking with new
products and mastering their intricacies. In return for low prices, they are happy to
conduct alpha & amp; data base testing report on early weaknesses . these are people
45
who wants to be the first to try innovation . they are venturesome and interesting in new
ideas . these people are very willing to take risks, and are often to this population. 2.5%
of sales for lays come from innovation they accept any new product introduce in the
market and also except the product due too low price.
46
 47

STATEMENT OF PROFIT & LOSS

(AMOUNT IN CRORE OF INR)
PARETICULAR MARCH MARCH
31,2019 31,2020
INCOME
Revenue from operation 33,650.54 28,836.09
Other income 691.25 778.34
Total Income 34,341.79 29,614.43

EXPENSES
Cost of raw materials consumed 23,346.10 19,867.19

Change in inventories of finished goods and work-in-progress (28.38) (167.78)

Employee benefit expenses 1,730.24 1,841.70
Finance cost 8.60 22.02
Depreciation and amortisation expenses 602.01 817.96
Other expenses 3,672.49 3,339.02
Total expenses 29,331.06 25,718.11
Profit before tax and exceptional items 5,010.73 3,896.32
Exception item- NCCD income - 737.38
Exception item- VRS expenses - (60.11)
Profit before tax 5,010.73 4,573.26
Tax expenses
Current tax 1,601.02 1,084.11
Deferred tax 24.84 (143.68)
Total tax expenses 1,625.86 940.43
Profit for the year 3,384.87 3,633.26
Other comprehensive income
Item that will not be reclassified subsequently to profit or loss (27.38) (42.47)
Re-measurement losses on defined benefit plans 10.69 9.57
Income tax effect (31.78) (17.81)
Net other comprehensive income for the year, net of income tax 3,367.06 3,601.48
Earning per share (nominal value of RS.2 each) in rupees
Basic 169.48 181.91
Diluted 169.47 181.91
 48

• STATEMENT OF FINAL BALANCE SHEET

(AMOUNT IN CRORE OF INR)

SR PARTICULARS MARCH MARCH

NO 31,2019 31,2020

A ASSETS
Non-current Assets
Property, plant and equipment 4,477.53 5,562.42
Capital work-in-progress 360.67 160.25
Right of use assets - 414.57
Other intangibility assets 141.05 140.09
Intangible assets under development 181.19 181.02
Financial assets
(1) Investment 2801.51 3528.17
(2) Loan 59.69 67.27
Income tax assets 839.26 310.13
Other non-current assets 664.38 96.85
Total Non-Current Assets 9,525.55 10,460.77

CURRENT ASSETS
Inventories 1,072.37 1,091.97
Financial assets
Investment 3,167.10 4,694.48
Trade receivable 2,821.57 1,603.14
Cash and cash equivalents 40.68 147.91
Bank balance 95.78 93.95
Loan 25.36 22.36
Other 653.89 354.61
Other current assets 239.22 280.14
Total Current Assets 8,115.64 8,288.56

Total Assets 17,641.19 18,749.33

B EQUITY AND LIABILITY

Equity
Equity share capital 39.95 39.95
Other equity 12,817.17 14,096.45
Total equity 12,857.12 14,136.40

LIABILITIES
49
Non-Current liabilities
Finance liabilities
Lease liability - 121.67
Provision 117.20 122.37
Tax liabilities 536.51 392.83
Total Non-Current Liabilities 653.71 636.87

Current Liabilities
Financial liabilities
Lease liabilities - 28.29
Trade payables
Total outstanding dues of micro and small 8.33
enterprises
Total outstanding dues of creditors other than 3,355.28 3,022.18
micro enterprise and small enterprise
Other financial liabilities 220.87 252.44
Other current liabilities 495.18 518.26
Provision 59.03 146.56
Total Current Liabilities 4,130.36 3,976.06

Total Equity and Liabilities 17,641.19 18,749.33

50
 51

• List of product and service

`

NO SCOOTER
1 MAESTRO EDGE 125 BS6
2 MAESTRO EDGE 110 BS6
3 DESTINY 125 BS6
4 PLEASURE + BS6
5 MAESTRO EDGE 125 BS6
6 DUET

MOTORCYCLE
1 GLAMOUR XTEC
2 XTEREME 160R BS6
3 XPULSE 200 BS6
4 PASSION PRO BS6
5 SPLENDORE ISMART BS6
6 SPLENDOR + BS6
7 GLAMORE BS6
8 HF DELUXE BS6
9 SUPER SPLENDOR BS6
10 XPULSE 200T
11 XTREME 200S
12 SPLENDOR + BLACK AND ACCENT
13 HUNK
14 KARIZMA
15 KARIZMA ZMR
16 ACHIEVER

HERO ELECTRIC
1 PHOTON HX
2 OPTIMA HX (DUAL BATTERY)
3 OPTIMA HX (SINGAL BATTERY)
4 NYX HX (DUAL BATTERY)
52

• Specific distribution channel

FACTORY

CARRY &
DEPOT FORWARD
AGENT

DEALER

ASC(AUT RSO(RUR
MULTI/SU HORIESD DEALERS
AL SALES
B DEALER SERVICE BRANCH
CENTER)
CENTER

CUSTOMER CUSTOMER CUSTOMER CUSTOMER

53

• Marketing segment

Hero MotoCorp caters to a wide consumer base. It has segmented its market based on
income and age. It caters to youth of all income groups. Its highest selling bike Splendor
is a favourite in sub urban and rural India. It portrays itself as the most efficient bike
range to cater to Indian Roads.
 54

• Two wheelers: Company wise Market Share

As per SIAM report, India has 11 motorcycle manufacturers and 7 scooter

manufacturers. Motorcycles contributed to 62.4 percent of the total sales, scooters
increased their contribution to 33.27 percent and mopeds share declined to 4.25 percent.
Hero MotoCorp, Honda Motorcycles and Scooters India (HMSI), TVS Motor, Bajaj
and Royal Enfield stands in top 5 followed by Suzuki Motorcycle and Yamaha Motor
India etc.

TWO-WHEELER MARKET SHARE

COMPAN HERO HMSI TVS BAJA ROYAL YAMAH OTHER
Y MOTORCO J ENFILE A S
RP D MOTOR

MARKET 36.56% 28.60% 14.24% 9.78% 3.97% 3.93% 2.92%

SHARE

Hero MotoCorp
wheeler industry by selling over 73.82 lakh motorcycles with a growth of about 14 percent in
FY18. Despite YOY growth it lost slight market share from 36.86 percent in FY17 to 36.56
percent in FY18. Hero Splendor has been India’s top-selling motorcycle and launch of new
products like Hero Glamour and Deluxe continue to allure buyers especially in the rural
markets. Hero MotoCorp did lose out on its scooter sales to its former Japanese partner Honda
MotoCorp the world’s largest two-wheeler manufacturer has continued to be the leader in the
Indian two-wheelers and Chennai based TVS Motor Company also overtook Hero in scooter
sales. Hero also exported over 2 lakh motorcycles in India.
55

• Honda Motorcycles and Scooters India

(HMSI) has registered a massive growth of 22.23 percent in 2017- 18 and sold a total
of over 57.75 lakh motorcycles. Scooters contributed to over 66 percent of Honda’s
total two-wheeler sales in India with over 38.21 lakh scooters sold. Honda Active is the
country’s most sold scooter and the company has also launched the Honda Grazia and
Honda Cliq to cater to the younger audience. HMSI’s market share stands at 28.60
percent.

TVS Motor Company often referred in the industry as one of the most sorted
companies in India has grown by over 15% last financial year and its new sports bikes
in Apache series and also commuters like TVS Victor along with major boost from
TVS Jupiter has helped the company to achieve a total sales of over 28.75 lakh,
grabbing a market share of 14.24 percent.

Only motorcycle manufacturers Bajaj and Royal Enfield have reported a sales of 19.74
lakh units and 8.01 lakh units respectively. While Bajaj Auto’s sales did drop by 1.3
percent YoY, Royal Enfield grew by over 23 percent and recorded its most sales ever.
Royal Enfield Interceptor 650 and Royal Enfield Continental GT 650 that were
showcased at EICMA 2017.

Japanese two-wheeler manufacturers, Suzuki Motorcycle and Yamaha Motor India sold
a total of 5.01 lakh and 7.92 lakh units respectively. Both of these companies sell
scooters, commuters and premium motorcycles in India. Suzuki Motorcycle closed the
financial year at a market share of 2.48 percent and Yamaha’s market share in India is
3.92 percent.
56

• Positioning strategies

Models, engine, and safety measures. Positioning is an act designing company’s profile
and image to take a top place in the minds of the targeted consumers. Positioning refers
and broadly means why targeted market should buy that product. Hero is having good
brand positioning in the market due to its look, designs

• Promotional tools
Hero MotoCorp has always been aggressive regarding its branding and marketing
activities. When it comes to promotion Hero Motocorp leaves no stone unturned, and
always goes the extra mile to reach out to its customers by convincing them in all ways
possible. This also helps Hero Motocorp to be connected with customers and help
build up a good relationship with them. Extensive Television advertisements becomes
the backbone of promotional activities. Other forms of promotional activities in its
marketing mix include newspaper, magazines, billboard, hoardings and distribution of
Pham plates in strategic locations. Over the years, Hero Motocorp has roped onto
famous personalities and Bollywood superstars to play the role of their brand
ambassador. Hero Motocorp have been closely associated with Cricket; which is the
most followed sports in India, thus helps them to tap into the youngsters’ base. With
significant amount of social responsibility activities, it helps Hero Motocorp to gather
a good amount of goodwill. All these give an insight in the marketing mix of Hero
MotoCorp.
57

• Pricing method

Hero MotoCorp gives bikes and two wheelers at a competitive price, focusing on the
mass market.
The ex-showroom prices of the products depend upon various parameters and vary from
state to state primarily because of VAT and other Tax constraints. Hero Motorcop
prices its products which is very competitive in the market, thus in turn they over the
years they have been able to skim the market and gain the largest market share. The
pricing in its marketing mix is a bit expensive than its competitors like Bajaj, Honda,
TVS. But this is due to the fact that the price varies with the value addition it has for
the buyers. More the features available with the products of Hero MotoCorp more is
the price of the model. A huge amount of purchase intention of Indian customers
depends on mileage than on the price, so Hero MotoCorp manufacture bikes which are
highly fuel efficient and couple it with attractive price helps them to convert purchase
intention to actual purchase.
58
59

• Recruitment & selection process

Recruitment and selection are the most important function in an organisation because
with the help of the these function the management selection the best available
candidate from a batch of them. The organisation, this growing competitive world, need
to have the best of manpower as have an edge over its competitive.

Sources of recruitment
There are two main sources of recruitment

1 Internal source
Present employees who can be transferred or giving promotion.
The retired and retrenched employees who want to return to the company.
Depends and relative of the deceased and disable employees.

2 External sources
Press & advertisement
Campus interview
Placement agency
Recommendation
Walk in interview
60

• Selection process
1 preliminary interview
2 application form
3 selection test
4 selection interview
5 physical interview
6 Reference check
7 Final approval
8 Employment

• NUMBER OF EMPLOYEES
8599, EMPLOYEES IN HERO MOTORCORP
61

• TRAINING AND METHODOLOGY

1 Class room lecture

Arranging class rooms lecture to the participant which expect some question from
participant. This is suitable for large audience.

2 Talk

Incorporates variety of techniques, allows participates and discussion from trainers,

suitable for gropes of not more than 20 lakhs. Participants may reduce it to a lecture.

3 Case studies

A history of some event or set of circumstance with the relevant details examined
by the trainees. Is provides opportunity for exchanges of ideas and consideration of
possible solution.

• Behavioural and attitudinal training

1 Stress management
2 Health management
3 Attitude and motivation
4 Team work
5 Role play
62

• Technical training
1 Energy and audit
2 Rural management system
3 Works unit and field works

• Employee’s safety mechanisms

We believe that safe work practice leads to better business performance,
motivated workforce and higher productivity.

We shall create safety culture in organization

1. Integrating safety and health matters in all our activities.
2. Promoting safety and health awareness among the employees, suppliers and
contractors
63

• Wages and salary administration

1. Associate manager salary: - RS 15,85,507 / Year
2. Sale manager salary: - RS 11,47,588 / Year
3. Graduate engineering salary: - RS 6,77,852 / Year
4. Service manager salary: - RS 6,22,507 / Year
64
65

• Raw material

During FY 2014-15, metal prices were volatile, particularly for steel, copper,
aluminium and nickel. However, raw material costs as a proportion of sales declined
from 72.56% to 72.22%.

• Turn over
Net sale turn over is RS 30,800.62(in crores)
Other income is RS 579.85(in crores)

• Product produce
India’s largest two-wheeler maker Hero MotoCorp, that crossed 100 million units in
cumulative production, said it will introduce over 10 products, including variants,
refreshes and upgrades every year, over the next five years. “We have been making in
India, for the world, and this milestone is an acknowledgment of the customers’
preference for Hero across geographies, demographics and generations,” said CMD
Pawan Munjal. Mr. Munjal added in line with its vision to ‘Be the future of mobility,’
the firm would unveil motorcycles and scooters over the next five years while also
expanding global footprint.
66

• Service provider
Our constant endeavor is to support the company's mandate of providing highest level
of customer satisfaction by taking good care of your two-wheeler service and
maintenance through our vast network of more than 6000 committed dealers and
service outlets spread across the country.

Our state-of-the-art authorized workshops have well laid out standards for two-wheeler
servicing with fully equipped infrastructure having quality precision instruments,
pneumatic tools and a team of highly trained service technicians. Having your two-
wheeler serviced at an authorized workshop ensures highest standards of service quality
and reliability.

• Services Schedule
Hero MotoCorp offers free services on all its two-wheelers. You should avail these
services within the stipulated conditions of time period or km range, whichever
condition gets satisfied earlier from the date of purchase. After the completion of free
services or its validity period you must continue availing paid services as per the
recommended service schedule.
67

• Conclusion
From this study we can conclude that hero MotoCorp is a well-organized company
providing tremendous
facilities to its customers. Hero MotoCorp is one of the leading automobiles in India it
provides low-cost
vehicles and they targeted middle class families. In motorcycle & scooter segment, hero
MotoCorp ltd has
faced severe competition from its peer resulting in a loss of market share. Hero
MotoCorp advertise in a
manner to attract the population with emotional and cultural attachment
like
1. Chalta rahe tera mera melon ka yaarana
2. Hero salute for real hero (army person)
3. Hero comes home safe.
4. Hum me Hai hero (social concern)
5. Hero MotoCorp has wide distribution network over 3000 dealerships