Industry Overview

The two-wheeler industry in India is one of the largest in the world. In 2022, the market size was estimated to be around 18 million units.
The industry is expected to grow at a CAGR of 9.88% to reach 48.1 million units by 2028.

The growth of the two-wheeler industry in India is being driven by a number of factors, including:

1. The rising population and increasing urbanization in India

2. The growing demand for personal transportation
3. The increasing affordability of two-wheelers, when compared to four-wheelers
4. The increasing penetration of electric two-wheelers
5. The government's focus on promoting fuel-efficient vehicles

The two-wheeler industry in India is dominated by a few major players, including:

Hero MotoCorp | Bajaj Auto | Honda MSI | TVS Motor Company | Royal Enfield
 Market Shares of the major players

A negative CAGR of 6.97%

17% Growth from last year.
Bajaj - Market Positioning Approach
Product Strategy
● Bajaj Auto focuses on two primary
areas: Performance-oriented
motorcycles and Commuter-friendly
models.
● They developed a deep
understanding of engine technology,
design capabilities, and
manufacturing efficiency, enabling
them to deliver high-performance
motorcycles that resonated with
enthusiasts.
● Simultaneously, they recognized the
importance of fuel efficiency and
reliability for the commuter segment
and tailored their offerings to meet
these specific requirements.
Navigating Competition
● At the heart of Bajaj Auto's success
lies their dedication to the power of
market research. By immersing in
data-driven insights, they gain a
profound understanding of their target
market. This allows them to navigate
the competitive landscape astutely,
leveraging hidden opportunities and
mitigating potential risks.
● By forming differentiation strategies to
focus on USP of products, they
mitigated competition.
● By placing their customers at the
forefront, Bajaj Auto fostered deep
connections, forged loyalty, and
propelled their brand to new heights.
Focus on NPD
● Bajaj regularly introduces new models, upgrade
existing ones, and explore emerging technologies
such as electric mobility
● Besides growing its share in the 125cc bikes in the
domestic market, the Pune-based company also
discontinued its strategy of aggressive pricing to
gain market share in the budget category.
● Bajaj Auto’s market share in the domestic
motorcycle market as at the end of September 22
stood at 19.63%
● 60% of its sales in Q2FY23 came from the 125cc
plus segment as compared to only 46% in FY20.
 Bajaj - Approach for Operating Efficiency
Introduction Bajaj Auto Overview -
- Brief overview of Bajaj Auto, a
leading Indian automobile
manufacturer.
- Emphasis on their reputation
for efficient operations and
competitive pricing
Risk Management
- Mitigation strategies for supply
chain disruptions.
- -Backup suppliers and quick
recovery plans in place.
Logistics & Supply Chain
Efficiency
Efficient logistics crucial for bulky
items, perishables, and dispersed
markets.
Bajaj Auto's well-optimized supply
chain ensures timely production and
distribution. Just-in-time inventory
management minimizes carrying
costs and stockouts
Input Risks & Integration
- Long-term contracts with
suppliers ensure stability.
- In-house R&D and
vertical integration reduce
reliance on external
sources.
Environmental Factors Cost Structure & Competitive
Pricing
- Commitment to eco-
friendly practices aligns - Lean cost structure due
with market trends. to efficient operations. -
- Enhances brand image - High production
and access to volumes enable
environmentally competitive pricing.
conscious markets.
Labor Relations & Financial Highlights
Technology
- Profitability driven by
- Stable labor relations streamlined
for uninterrupted operations.
production. - Comparative cost
- In-house R&D and structure analysis for
strong parent support industry perspective.
drive technological
innovation.
TVS - Market Positioning Approach
Regulatory changes:
Risk: Changes in emission standards, safety regulations, and
import/export policies can impact production and sales.
Mitigation: Stay informed about regulatory changes and
proactively adapt manufacturing processes and products to
comply with new standards.
Competitive landscape:
Risk: Intense competition from established players like
Royal Enfield, Bajaj, Honda, and new entrants.
Mitigation: Continuous innovation in product design,
technology, and features to differentiate from competitors.
Current & upcoming launches:
225-cc motorcycle Ronin - High end bike segment
EV plus IC-engine - Electronic vehicle market
Technological disruption:
Risk: Rapid advancements in electric vehicles (EVs) and
autonomous technology could disrupt traditional vehicle
markets.
Mitigation: Develop strategic partnerships with technology
companies to stay competitive.
Supply chain disruptions:
Risk: Dependence on global suppliers for components could
lead to disruptions due to geopolitical tensions or logistical
issues.
Mitigation: Diversify supplier base, establish contingency
plans, and explore local sourcing options to minimize supply
chain disruptions.
Current performance:
Company delivered ROE of 24.13% in year ending 31 Mar, 2023
outperforming its 5 year avg. of 19.86%.
Company's annual revenue growth of 31.67% outperformed its 3 year
CAGR of 19.11%
TVS - Operating Efficiency
Technology and Innovation: TVS Motor invests in research and
Raw Material Prices: TVS Motor may engage in long-term contracts
development to stay at the forefront of technological advancements in
with suppliers or use hedging strategies to stabilize raw material
the automotive industry eg BMW.
costs.

Market Demand: To manage fluctuations in demand, TVS Motor

Supply Chain Disruptions: TVS Motor diversifies its supplier base
diversifies its product offerings and explores new markets 4.95 Million
and maintains contingency plans to ensure a resilient supply chain.
Two-Wheelers Annual Production Capacity.

Labor Relations: TVS Motor fosters positive labor relations through

Competition: TVS Motor focuses on brand development, product
fair wages and effective dispute resolution mechanisms to minimize
innovation, and effective marketing to remain competitive in the
the risk of workforce-related disruptions.
crowded automotive market It was the first Indian company to deploy a
catalytic converter in a 100 cc motorcycle.
Regulatory Changes: The company stays informed about regulatory
changes and adapts production processes to comply with new laws
Environmental Factors: TVS Motor emphasizes eco-friendly product
and standards.
development and sustainable manufacturing practices to meet
environmental regulations and consumer preferences.
Currency Exchange Rates: TVS Motor employs hedging techniques
or adjusts pricing strategies to mitigate the impact of currency
Geopolitical Risks: By diversifying its market presence and monitoring
exchange rate fluctuations.
geopolitical developments closely, TVS Motor aims to minimize
disruptions caused by political instability or trade tensions.
 HERO’s - Approach for Market Positioning
Diverse Product Portfolio
- Hero provides a large selection of
two-wheelers to meet the needs of
various client segments, ranging
from affordable commuting
motorcycles to high-end models.
They are able to reach a wider
market and identify various
customer preferences thanks to their
extensive range.
- In addition to their entry-level
commuter models, Hero MotoCorp
extends its product lineup to include
motorcycles with a more refined and
elevated character. These offerings
feature enhanced design elements,
advanced technological features, and
improved performance dynamics.
- Hero MotoCorp has also entered the
electric vehicle market with electric
scooters and bikes.
Global Expansion
- Hero MotoCorp has been
expanding its presence in
international markets. This
approach diversifies their revenue
streams and allows them to tap
into the potential of emerging
markets.
- This expansion aims to diversify
the company's customer base,
increase revenue streams, and tap
into the growth potential of
emerging markets.
Sustainability Initiatives
-Hero MotoCorp has shown an interest
in sustainability by introducing eco-
friendly technologies, promoting green
manufacturing practices, and
advocating for environmentally
responsible operations.
-Hero focuses on adopting eco-friendly
manufacturing practices that reduce
energy consumption, water usage, and
waste generation in its production
processes.
-The company invests in research and
development to develop and implement
green technologies, such as more fuel-
efficient engines and electric vehicle
(EV) solutions.
-Hero engages in corporate social
responsibility (CSR) initiatives that
support environmental conservation and
community development.
Customer-Centric
Approach
-Hero MotoCorp focuses on
understanding and meeting the
needs of its customers. This
involves conducting market
research, gathering consumer
feedback, and designing products
that align with customer
preferences.
-The company actively engages
with customers through various
channels, including social media,
surveys, feedback mechanisms,
and customer service interactions.
-The company places a strong
emphasis on delivering products
of high quality that meet or
exceed customer expectations.
Reliable performance enhances
customer trust and loyalty.
 HERO’s - Approach for Operating Efficiency
Supply Chain Management
Hero places a strong emphasis on
comprehensive supply chain
management to shorten lead times
and control inventories. Operations
can be made more efficient by
working in partnership with
suppliers and logistical partners.
Data-Driven Decision
Making
The business optimizes its
operations by using data analytics
to make defensible judgments
regarding production, inventory
control, and market trends.
Process Optimization
The company continuously
evaluates and refines its
processes to eliminate
bottlenecks, redundancies, and
inefficiencies. This ensures
smoother operations and
resource utilization.
Technology Adoption
Hero leverages technology and
automation where applicable to
enhance production and
operational efficiency. This
includes advanced
manufacturing technologies and
data-driven decision-making.
Cost Management
The company keeps a keen
eye on costs across its
operations. This involves
prudent spending, cost-
effective procurement, and
resource allocation to
maintain profitability.
Training and Skill
Development
Hero invests in training and
skill development for its
workforce to enhance their
expertise and efficiency.
Well-trained employees
contribute to smoother
operations.
Process Optimization
To get rid of bottlenecks,
duplications, and
inefficiencies, the organization
continually assesses and
improves its processes. This
guarantees more efficient use
of resources and activities.
Energy Efficiency
Hero is committed to
reducing energy
consumption through
energy-efficient
technologies, optimizing
plant layouts, and adopting
sustainable practices.
Industry Risk Assessment
Risk Factors TVS Hero Bajaj

Dominant player in the economy segment

Faces strong competition from Hero Faces competition from Hero and TVS
Market Competition but faces competition from TVS and Bajaj
and Bajaj in various segments. across various segments.
in higher segments.

Need to invest in research and Known for innovative offerings, but

Technological Focus on innovation and R&D to maintain
development to keep up with needs to stay updated with evolving
Disruption competitive edge.
technological advancements. technologies.

Dependence on suppliers for critical Diverse supplier network, but

Supply Chain Strong supplier relationships help manage
components; disruptions can impact potential disruptions can affect
Disruptions disruptions, but still vulnerable.
production. production.

Known for quality and performance, Established brand with a focus on

Strong brand loyalty due to reliability and
Brand Reputation but maintaining brand image is performance and value; needs to
widespread service network.
essential. maintain reputation.
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