Hero Honda: Is It Honda That Made It a Hero? Essay example

7223 Words Jan 22nd, 2008 29 Pages
1. Executive Summary

Hero Honda Motors (India) Ltd. is the World's biggest manufacturer of motorcycles (by quantity). Starting as a bicycle company, it set up a 50/50 joint venture, set up in 1984 with Honda Japan, to manufacture and sell motorcycles in India. Honda brought in the technological know-how, and Hero the India presence, and the local manufacturing ability.
Hero Honda Motors captured the market for motorcycles in India, by offering an affordable 4-stroke, 100 CC motorcycle, that was extremely fuel efficient.
They also established dealerships al over the country – even rural areas – . The strategy of Hero Honda Motors was to capture the market by offering a superior product at an affordable price, with excellent customer
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3. Industry and Competitive Analysis
3.1. What are the industry's dominant economic features?
3.1.1. Industry and Competitive Analysis. An overview

The current market size for motorized vehicles in India is estimated at 200 million units.
The industry of two wheelers ( i.e. motorcycles, scooters and mopeds) in India is the dominant industry for personal motorized transportation, in term of volume:
In India it represents 77% of the total automobile market.
Worldwide, India is the second largest producer of motorized two-wheelers, after China.
(India produced approx. 4.3 million units in 2003, China approx. 12.1 million units. Number three is Japan with approx. 2.3 million units) .

The first producers of motorized two wheelers started in the 1950's and concentrated on the production of Italian model inspired scooters: i.e. Lambretta and Vespa.

The motorcycle manufacturing industry in India originated with Automobile Products of India (API) which manufactured scooters.
API manufactured the Lambretta™ . Bajaj Auto Ltd. Quickly surpassed API and remained the main scooter manufacturer – until today -, through its association with Piaggio of Italy (manufacturer of Vespa™ ).

The license raj that existed between the1940s to1980s in India, did not allow foreign companies to enter the market and imports were tightly controlled. This regulatory maze, before the economic liberalization, made business easier for local players to have a

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