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Industry Analysis Report of Automobile Industry (Two

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Industry Analysis Report Of AUTOMOBILE INDUSTRY (TWO WHEELERS) Submitted To Department of Business Administration By B.SANTHOSH KUMAR 08D31E0040

INDUR INSTITUTE OF ENGINEER & TECHNOLOGY (Affiliated to JNTU) Ponnala (V), Siddipet (M), Medak 502 277 AP (2008-2010)

CERTIFICATE

This is to certify that the Industry Analysis entitled TWO WHEELER INDUSTRY submitted by B.SANTHOSH KUMAR to Indur Institute of Engineering and Technology is a record of independent analysis report done during the Academic Year 2009-2010.

Head of the Department Mr.Dr.R.Suresh Kumar M.B.A (Professor)

IndustryAnalysis Guide Mr.venkateshwer rao M.B.A(AssistantProfessor)

DECLARATION

I B.SANTHOSH KUMAR, here by declare that the industry entitled TWO WHEELER INDUSTRY, submitted to INDUR INSTITUTE OF ENGINEERING AND TECHNOLOGY. Drafted by me is an original work of my own and has not been submitted to any college/university earlier. This industry analysis has been written & submitted by me under the guidance of Mr.venkateshwer rao, department of management Indur institute of Engineering and Technology, Ponnal, Siddipet, Medak Dist.

Place: SIDDIPET

B.SANTHOSHKUMAR

Date:

(08D31E0040)

ACKNOWLEDGEMENT

For completing this Industry analysis, a few people have been very helpful. I would like to lay the word of gratitude for them imprinted. First of all I would like to thank sincerely to our H.O.D, Mr. Dr.R.Suresh Kumar for his encouragement, motivation and kind of help to complete this analysis. I would like to thank my college faculty, and internal guide .venkateshwer rao for her guidance, suggestions, help, support and encouragement. Finally I would like to extend my sincere thanks to my friends and relatives for their valuable help.

Place: SIDDIPET Date:

B.SANTHOSH KUMAR (08D31E0040)

CONTENTS CHAPTER-I Industry origin and growth CHAPTER-II SWOT Analysis Industry present and future trends Major firms in an industry Firms or Company strategies CHAPTER-III Objectives Scope Methods of data collection Data analysis Limitation of the study CHAPTER - IV DATA ANALYSIS DESIGN OF THE STUDY INDUSTRY ANALYSIS INTRODUCTION

PAGE NO.

Government rules and Regulations

Data analysis & interpretation CHAPTER-V Findings Suggestions ConclusionsBIBLOGRAPHY

CHAPTER-I Industry origin and growth;-

INTRODUCTION

The two-wheeler industry in India has grown rapidly in the country since the announcement of the process of liberalization in 1991 by the then finance minister Dr. Manmohan Singh, now Prime Minister of India. Previously, there were only a handful of two-wheeler models available in the country. Currently, India is the second largest producer of two-wheelers in the world. It stands next only to China and Japan in terms of the number of twowheelers produced and the sales of two-wheelers respectively. In the year 20052006, the annual production of two-wheelers in India stood at around 7600801 units. The trend of owning two-wheelers is due to a variety of facts peculiar to India . One of the chief factors is poor public transport in many parts of India . Additionally, two-wheelers offer a great deal of convenience and mobility for the Indian family. Bajaj auto began trading in imported Vespa Scooters in 1948. Meanwhile Automobile Products of India (API) commenced production of scooters in the country in the early 50s. Until 1958, API and Enfield were the only producers of two-wheelers in India. However, Bajaj signed a technical collaboration in 1960 with Piaggio of Italy to produce Bajaj Scooters. This deal expired in 1971. The condition of motorcycle manufacturers was no different. Until the mid 80s, there were only three major motorcycle manufacturers in India namely Rajdoot, Escorts, and Enfield . The two-wheeler market was opened to

foreign manufacturers in the mid 80s. The industry, which had seen a smooth ride before, faced fierce foreign competition. Motorcycle companies like the Yamaha, Honda, and Kawasaki , set up shop in India in collaboration with various Indian two-wheeler companies. Companies like Escorts, Rajdoot and faced immense competition from smaller 100 cc Japanese technology motorbikes. Bikes manufactured by Hero Honda, the only company manufacturing four-stroke bikes at that time, gained massive popularity. In the mid 80s, Kinetic introduced a variomatic gearless scooter in collaboration with Honda. This scooter became instantly popular with the younger generation, especially people who found it difficult to use geared scooters. The introduction of scooterettes created another segment for people such as women and teenagers who could not get used to driving either motorcycles or gearless scooters. Many companies such as Kinetc, TVS, and Hero also started manufacturing mopeds that proved immensely popular with people who wanted a simple riding machine. The change in the governments policy owning to pollution control norms and the Kyoto agreement saw the phasing out of two stroke two-wheelers from production. Currently there are around 10 two-wheeler manufacturers in the country, they being Bajaj, Hero, Hero Honda, Honda, Indus , Kinetic, Royal Enfield, Suzuki, TVS, and Yamaha. The latest trend in the two-wheeler market is the introduction of electrically operated vehicles from a range of manufacturers such as Indus and Hero. These can be recharged from convenient household electrical points. The only disadvantage is speed, which is restricted to around 25 miles per hour. Currently, the motorcycle market is witnessing a demand for higher volume engines. Previously, the 100 c bikes were very popular owning to the high fuel efficiency offered. However, the market is maturing fast. Sensing this

movement, Bajaj has introduced the Bajaj Pulsar, with 150, 180 and 200 cc engines with Dual Twin Spark Ignition (DTSi) technology.

The two-wheeler industry in India has grown rapidly in the country since the announcement of the process of liberalization in 1991 by the then finance minister Dr. Manmohan Singh, now Prime Minister of India. Previously, there were only a handful of two-wheeler models available in the country. Currently, India is the second largest producer of twowheelers in the world. It stands next only to China and Japan in terms of the number of two-wheelers produced and the sales of two-wheelers respectively. In the year 2005-2006, the annual production of two-wheelers in India stood at around 7600801 units. The trend of owning two-wheelers is due to a variety of facts peculiar to India . One of the chief factors is poor public transport in many parts of India . Additionally, two-wheelers offer a great deal of convenience and mobility for the Indian family. Bajaj auto began trading in imported Vespa Scooters in 1948. Meanwhile Automobile Products of India (API) commenced production of scooters in the country in the early 50s. Until 1958, API and Enfield were the only producers of two-wheelers in India. However, Bajaj signed a technical collaboration in 1960 with Piaggio of Italy to produce Bajaj Scooters. This deal expired in 1971. The condition of motorcycle manufacturers was no different. Until the mid 80s, there were only three major motorcycle manufacturers in India namely Rajdoot, Escorts, and Enfield . The two-wheeler market was opened to foreign manufacturers in the mid 80s. The industry, which had seen a smooth ride before, faced fierce foreign competition.

Motorcycle companies like the Yamaha, Honda, and Kawasaki , set up shop in India in collaboration with various Indian two-wheeler companies. Companies like Escorts, Rajdoot and faced immense competition from smaller 100 cc Japanese technology motorbikes. Bikes manufactured by Hero Honda, the only company manufacturing four-stroke bikes at that time, gained massive popularity. In the mid 80s, Kinetic introduced a variomatic gearless scooter in collaboration with Honda. This scooter became instantly popular with the younger generation, especially people who found it difficult to use geared scooters. The introduction of scooterettes created another segment for people such as women and teenagers who could not get used to driving either motorcycles or gearless scooters. Many companies such as Kinetc, TVS, and Hero also started manufacturing mopeds that proved immensely popular with people who wanted a simple riding machine. The change in the governments policy owning to pollution control norms and the Kyoto agreement saw the phasing out of two stroke two-wheelers from production. Currently there are around 10 two-wheeler manufacturers in the country, they being Bajaj, Hero, Hero Honda, Honda, Indus , Kinetic, Royal Enfield, Suzuki, TVS, and Yamaha. The latest trend in the two-wheeler market is the introduction of electrically operated vehicles from a range of manufacturers such as Indus and Hero. These can be recharged from convenient household electrical points. The only disadvantage is speed, which is restricted to around 25 miles per hour. Currently, the motorcycle market is witnessing a demand for higher volume engines. Previously, the 100 c bikes were very popular owning to the high fuel efficiency offered. However, the market is maturing fast. Sensing

this movement, Bajaj has introduced the Bajaj Pulsar, with 150, 180 and 200 cc engines with Dual Twin Spark Ignition (DTSi) technology.

Growth:Credit Analysis and Research (CARE Ratings) says that the rural India will be the next growth frontier for the Indian two wheeler industry. Domestic two-wheeler sales have grown to around 11.3 million by financial year 2014 from 7.4 million in financial year 2009 is also projected by the credit rating agencys research arm. The two-wheeler penetration in rural area is at 211 per thousand, as compared with 644 per thousand in urban areas. That leaves plenty of scope for