PRESENTED BY- BICHITRA KRO

KAUSHIK BORA
DEEPJYOTI SHARMA
 Hero cycles manufactured 16000 cycles per
day

 Sold about 86 million bicycles till 2002

 Nurtured an excellent network of dealers to

serve to serve India's expansive market
 Honda motor company initially planned to enter
two wheeler segment and electric generator segment

 Honda first chose kinetic engineering ltd. and formed

Kinetic Honda Motors Ltd. joint venture for scooter
manufacturing

 It chose Hero Group for motor cycle

manufacturing as joint venture
Wide Distribution Better Understanding
Limited Options With
Network Through Of The Market
Honda
Dealers Dynamics

Wide Experience In Focus On Financial

Commitment To
Manufacturing Of And Raw Material
Quality
Vehicles Processes

Salience Of Hero Cordial Industry Engineering

Brand Relation Capabilities
 Joint Venture came up in June 1984 -Hero Honda Motors Ltd.

 Honda would provide technical know how and assist in setting

manufacturing facilities

 Honda agreed for $500000 as one time lump sum fees and 4% loyalty

 Joint Venture had 26% equity each with 26% to the public and rest with
the financial institutions
 Hero Honda Motors had grown consistently, earning the title of the
world’s largest motorcycle manufacturer with annual sales volume
of over 2million

 Every 30 seconds, someone in India buys Hero Honda's top-selling

motorcycle – Hero Honda Splendor

 Company lead in both domestic two wheeler industry with nearly

48 % and motorcycle segment, with the shares of 59%

 Over 9 million motorcycles on Indian roads

 Deep market penetration with 5000 outlets

DEEP PENETRATION NETWORK OF HERO LARGELY
BENEFITED THE SALES

ABSENCE OF MAJOR COMPETITORS IN INITIALYEARS

SOUND AND PROVEN TECHNICAL CAPABILITIES OFHONDA

AND THE RELIABILITY OF HERO

INCREASED MARKET FOR MOTORCYCLES

BETTER FUEL EFFICIENCY

CHANGE IN PEOPLE’S PERCEPTION

DECREASE IN PRICE DIFFERENCE WITH SCOOTERS.

 Technological Leadership  Market STP

 Extending brand equity to  Innovative Advertising

new categories
 Consumer Initiatives
 Stronger product portfolio
 Rural Market Penetration
 Capacity expansion
 Employee Management
 Ancillarization

 Expanding Dealer
Network
 Announcement regarding formation of Honda Motorcycle and
Bicycle India (HMSI) in August, 1999

 Hero Honda Motor Company stock plunged by 30 % on the day of

announcement

 Overlapping of products had alreadystarted

 Example:-Honda Unicorn and Hero Honda CBZ Extreme in 150cc

segment whereas Similar is the case with Honda Shine and
Splendor plus

 Entry of new entrants increasing competition

 HERO HONDA 1984 - 2010
HERO MOTOCORP LTD
Paid 2,479.33 crore for
assembly, manufacture,
selling, distribution and
exports licenses, which have
been amortized over a
period of 42 months up to 30
june’14
HONDA
-Entered into a share transfer
agreement
-Entire share holding of 26%
transferred to Hero, bringing
an end to the joint venture
Higher Royalty Payments

Honda's reluctance to fully and freely share

technology

Refusal of Hero Honda to merge the

company's spare parts business with HMSI

Partners turning into Competitors

 Hero’s Rebranding Exercise – HERO MOTOCORP

 New logo along with an advertising campaign

 Launched new products and announced its intentions of exploring

international markets

 Remained successful in retaining its position as the top two-wheeler

company in the Indian market

 According to Pawan Munjal MD of Hero Motocorp, the Challenges included

- First is to bring our own product
- Second is to go out and set up our distribution globally
- Third to replace the brand, which was already one of the most
established brands in the country