2. Hero Honda Motors (HHML)
ď§ World's largest two-wheeler manufacturing company
ď§ Three manufacturing facilities:
ď§ Dharuhera
ď§ Gurgaon
ď§ Hardwar
ď§ Incorporated in 1984 as a joint venture (JV):
ď§ Honda Motor Company of Japan
ď§ Hero Group India
Hero
ď§ Munjal brothers brand for their flagship company Hero Cycles Ltd.
ď§ 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
5. Major Players
ď§ Hero Honda
ď§ Bajaj Auto
ď§ TVS
ď§ Yamaha
Total Executive class
ď§ Suzuki
ď§ Enfield
ď§ New
ď§ Harley Davidson
Economy segment Premium segment
6.
7. Separation
Reasons:
ď§ R & D capability sharing by Honda
ď§ Pollution norms
ď§ Royalty being paid by Hero to Honda: 4-5%
ď§ Honda Motors
⢠Separate brand increasing market share
ď§ Refusal of Hero Honda to merge the spare parts business with
HMI
8. SWOT
â˘Strength Opportunity
â˘Good Quality â˘Exports market:
â˘Leader 52% ⢠Not explored yet as JV
â˘Extensive Dealer network 550 constraint
â˘3500 service centers â˘No Royalty: 4-5%
â˘Strong marketing
Weakness Threat
â˘R&D: Dependent on Honda â˘Market competition:
â˘Capacity constraint: â˘Honda, Bajaj
5.2million â˘R&D : Pollution norms
â˘Financial weakness: Low
cash as heavy dividend
â˘No overseas market
9. Stakeholders
ď§ Suppliers:
ď§ 350 component suppliers
ď§ Connection with the Munjal family but supplying parts to Honda as well
ď§ Honda started looking for new supplier base
ď§ Distributers:
ď§ Unique intangible resources that it has; superior brand image & reliability
perception of its brand is the outcome of these intangible & tangible key assets
ď§ Key would be the close relation based on trust and long term relationships
10. Future strategies
ď§ Product Branding
ď§ Splendor
ď§ Passion
ď§ Karizma
ď§ Already started work with JWT marketing communications
ď§ Corporate Branding
ď§ Hero Cycle: May have negative impact
ď§ Separate as subsidiary with separate brand name
11. Global Branding
ď§ Marketing focus:
ď§ Major Sports events
ď§ Targeting young consumers
ď§ Quality Image:
ď§ Huge investment required for image as quality producer or transfer of
image
ď§ International presence:
ď§ Sponsor/Participate Moto â GP
12. Build Indigenous Research & Development
ď§ 3 years for capability development
ď§ In-house
ď§ Develop indigenous products
ď§ Scale up Hero Global Design
ď§ Possible Technological tie-up or Acquisition
ď§ MV Augusta â Italy
ď§ Megelli motorbikes- UK
13. Global markets
ď§ Huge potential
ď§ Bajaj upto 30% of sales
ď§ Major markets:
ď§ African continent
ď§ South East Asia
ď§ Middle East
ď§ Establish channel partners
ď§ Distribution
ď§ Marketing
14. Possible Impact on industry
ď§ Market
ď§ Increased Competitiveness
ď§ Price war or Variant flooding
ď§ Consumer
ď§ More options
ď§ Better quality
ď§ Past experience
ď§ Bajaj + Kawasaki : Doing well (Still together for premium segment)
ď§ TVS + Suzuki: TVS prospered, Suzuki struggling