Bajaj Auto vs Hero Honda

Topics: Honda, Motorcycle, Bajaj Auto / Pages: 10 (2254 words) / Published: Mar 21st, 2008
Producing Lowest Cost Two-Wheelers:
Bajaj Auto Vs Hero Honda

By
Ved Singh,
Abhimanyu Prabhavalakar,
Baskaran Balasubramanian,
Srikanth Gopalakrisnan

Table of Content
1. Indian Economy and Two-wheeler Industry
2. Bajaj Auto Ltd.
3. Hero Honda
4. Cost Management Analysis

1. Indian Economy and Two/Three wheeler Industry
As we write this report, there are few factors which we would like to state , just to set the context for this report, for for Indian Economy in general and then for two-wheeler industry in general –
• Consistent High Growth in Indian Economy
High Growth India appears to have acquired a ravenous appetite for growth that shows no signs of abating. A GDP growth of 9.4 percent in 2006-07 makes it the second successive year of 9 per cent plus growth. The country's GDP crossed the billion-dollar mark for the first time ever in April 2007, and India now finds itself in an elite club of trillion dollar nations.
• High Savings Rate
There is little doubt that the changing savings and investment profile is powering India's growth engine. The savings rate shot up to 32.4 per cent of GDP during the year in review This is at par with some of the top ASEAN nations.
• Manufatucting Sector Growth
Manufacturing posted a growth of over 12 percent Capacity expansion was fueled by a boom in capital goods, electronics and automobile sectors, emphasising the consumer boom.
• Young Consumers' share in population
With 30-40 million persons joining the middle class each year, demographics has emerged as a source of competitive advantage. Approximately 50 per cent of India is under 25, and it will remain this way for some time What this means is that a higher percentage of people will be in the working age till the mid-twenty-first century- which is when India is projected to take over the US as the second largest economy of the world.
• Urbanisation
Urbanisation is also becoming increasingly relevant in the growth

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