Motorcycle and Hero Honda

Satisfactory Essays
Topics: Honda, Motorcycle
CASE ANALYSIS OF HERO HONDA MOTORS LIMITED

PRESENTED BY:- VISHAL KUMAR RAJ LAKSHMI GUPTA

INTRODUCTION Today if one talks about Indian two wheelers industry, reference to Hero Honda Motors Limited is by default. It is not only the market leader in the two wheeler segment but also the number one two wheeler company in the world by volume. The company¶s name is synonymous with fuel efficient bike and longevity.

BACKGROUND
Hero Honda came into existence as a Joint venture agreement between Munjal¶s family Hero group and Honda motor company (HMC) Japan, each having 26% stake in the company. A ten year agreement was first entered in the year 1984, where by HMC brought in Technical expertise and Hero brought in local talent to manage all other function including Marketing, Finance and Human resources.

PERFORMANCE
The Indian two wheeler industry has seen a paradigm shift from being a regime of regulation and tight control in the 1980s to a more liberalised and competitive present day era. After missing out on the initial boom in two wheeler segment during the period of 1993- 1996, Hero Honda has emerged as a world leader. The gap between motorcycles sold by Hero Honda and its closest rival is approximately 1 mn units( 23% of industry size). ‡ One of the reason for tremendous performance of Hero Honda is the significant increase of share of motorcycles in the two wheeler segment.

ISSUES:
‡ Threat of competition:- Not only from its own partner i.e Honda motor co. but also from domestic rivals and foreign interlopers. ‡ Decline in market price of shares:- The share plummeted more than 30%, when Honda motors announced to start a new loop subsidiary. ‡ Lack of cooperation's from Honda motor co¶s R&D engineers. ‡ Competition from domestic as well as international front:Domestic players such as Bajaj and TVS were giving competition to Hero Honda, after making a joint venture with foreign co¶s, moreover Chinese motorcycles imported in India were for cheaper

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