Hero honda - Motorcycle

1. Future Strategy for
Hero without Honda
Hero

2. Hero Honda Motors (HHML)
 World's largest two-wheeler manufacturing company
 Three manufacturing facilities:
 Dharuhera
 Gurgaon
 Hardwar
 Incorporated in 1984 as a joint venture (JV):
 Honda Motor Company of Japan
 Hero Group India
Hero
 Munjal brothers brand for their flagship company Hero Cycles Ltd.
 Both parties owned 26% each in the JV and the technology sharing agreement is
renewed every 10 years.

3. Industry:
Two Wheelers: 76.23 %
Society of Indian Automobile Manufacturing 2011

4. Two Wheeler market:
 Motorcycle leading

5. Major Players
 Hero Honda
 Bajaj Auto
 TVS
 Yamaha
Total Executive class
 Suzuki
 Enfield
 New
 Harley Davidson
Economy segment Premium segment

7. Separation
Reasons:
 R & D capability sharing by Honda
 Pollution norms
 Royalty being paid by Hero to Honda: 4-5%
 Honda Motors
• Separate brand increasing market share
 Refusal of Hero Honda to merge the spare parts business with
HMI

8. SWOT
•Strength Opportunity
•Good Quality •Exports market:
•Leader 52% • Not explored yet as JV
•Extensive Dealer network 550 constraint
•3500 service centers •No Royalty: 4-5%
•Strong marketing
Weakness Threat
•R&D: Dependent on Honda •Market competition:
•Capacity constraint: •Honda, Bajaj
5.2million •R&D : Pollution norms
•Financial weakness: Low
cash as heavy dividend
•No overseas market

9. Stakeholders
 Suppliers:
 350 component suppliers
 Connection with the Munjal family but supplying parts to Honda as well
 Honda started looking for new supplier base
 Distributers:
 Unique intangible resources that it has; superior brand image & reliability
perception of its brand is the outcome of these intangible & tangible key assets
 Key would be the close relation based on trust and long term relationships

10. Future strategies
 Product Branding
 Splendor
 Passion
 Karizma
 Already started work with JWT marketing communications
 Corporate Branding
 Hero Cycle: May have negative impact
 Separate as subsidiary with separate brand name

11. Global Branding
 Marketing focus:
 Major Sports events
 Targeting young consumers
 Quality Image:
 Huge investment required for image as quality producer or transfer of
image
 International presence:
 Sponsor/Participate Moto – GP

12. Build Indigenous Research & Development
 3 years for capability development
 In-house
 Develop indigenous products
 Scale up Hero Global Design
 Possible Technological tie-up or Acquisition
 MV Augusta – Italy
 Megelli motorbikes- UK

13. Global markets
 Huge potential
 Bajaj upto 30% of sales
 Major markets:
 African continent
 South East Asia
 Middle East
 Establish channel partners
 Distribution
 Marketing

14. Possible Impact on industry
 Market
 Increased Competitiveness
 Price war or Variant flooding
 Consumer
 More options
 Better quality
 Past experience
 Bajaj + Kawasaki : Doing well (Still together for premium segment)
 TVS + Suzuki: TVS prospered, Suzuki struggling

15. Thank You