HERO MOTO CORP

Click to edit Master subtitle style History

SWOT Industry Analysis

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Origins

1) 1950s HERO established as bicycle manufacturers. 1975 HERO becomes the largest bicycle manufacturers in India. 1970s Government distributing licenses for Mopeds. Munjal family mops up one Negotiations with Peugeot, French Auto Major fails, HERO decides to go on its own Hero Majestic catches 35% market share in 1983.
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2) 3)

4) 5)

Munjal Family Success Mantra

1)

All the four founding brothers will have equal stake in all the munjal companies.

2)If

any of the Munjal family members wanted to join the company, he had to start his own work under the Munjal group, this lead to the formation of textile units, financial services and steel mills.
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Birth Of HERO HONDA (DESH KE DHADKAN)

Why 1) 2) 3)

only HERO group for JV?

HERO had a very efficient distribution mechanism, had a good reach. Experience in handling large volume Production Bajaj was a leader in two wheeler market, with scooters so there was a very rare chance they would venture in bikes. capability.
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Engineering

Art Of negotiation
The

JV took place in 1984. That was a time when Bajaj scooters took one year to deliver and Hero-Honda planned to change it all. The skills in negotiations were shown once again when, HERO entered in a JV with another Japanese company SHOWA to manufacture the shock absorbers.

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GRowth
In

90s Hero Ventured in finance and exports and became Indias largest exporter of twowheelers. In 1992 they signed a new pact with HONDA till 2004. In 1998 HONDA ended its venture with Kinetic, since HHM was focused on motorcycles, it did not give heed to HONDAs advice. HONDA announced HMSI and the stock of HHM plummeted by 30%, according to the agreement HMSI would manufacture scooters for the first two years and then motorcycles from then on. HHM defeated Bajaj eventually to become the largest manufacturer of two wheelers.
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Reasons for Terminating JV

Reluctance

on Hondas part to share the technology like before, because it had its own brand now. Both partners not being able to come to terms at the royalty fees. Refusal of HHM to merge the companys spare part business with Hondas newly owned subsidiary Honda Motors India. The major raw material suppliers for the HHM were from the Munjal clan and HONDA wanted more competitive strategy in this.
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2) 3)

4)

SWOT
Let

us bring out in discussion from the brief overview given and the readings we have undertaken the strength, weakness, opportunities and threats.

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Demand for two wheelers

Inadequate Increased

public transportation system, especially in the semi-urban and rural areas; availability of cheap consumer financing in the past 3-4 years; availability of fuel-efficient and low-maintenance models; urbanisation, which creates a need for personal transportation; in the demographic profile; between two-wheeler and passenger car prices, which makes two7/27/12

Increasing Increasing Changes

Difference

Future of 2 wheeler industry

1)

Volume Growth
27% in 2010-2011

1.1) 25% in 2009-2010

1.2)

2)

Projected Growth : 10-12% over the next five years to reach the size of 21-23 million from present 13 million. MOTO CORP keeps on adding 500-600 customer touching points, closest rival Bajaj has 500 dealers and is now going on an aggressive run.
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HERO