assessment front sheet pgdbe important : your assignment will not

8/14/2019 Assessment Front Sheet Pgdbe Important : Your Assignment Will Not

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Assessment Front Sheet PGDBE

IMPORTANT : YOUR ASSIGNMENT WILL NOT BE ACCEPTED FOR

ASSESSMENT WITHOUT THE COVERING SHEETS

PGDBE Programme : ACL I Integrated assignment

Assignment Title Flooding the Indian

Motorcycle Market

Assessor : RAMESH KASHYAP

Student Name : Year 2009

Given out on : 03.11

.09

Required Submission

Date :14.12.09

Actual Submission Date:

Submitted to :

REENA RAGHAVAN

OUTCOMESAssessment Criteria To achieve each outcome a student

must demonstrate the ability to :

Explore various sales increasingtechniques

Compare and contrast 4Ps of Marketing Strategy

Explore various market structures. Compare and contrast how market economics affect thebusiness

Explore various ways to prepare trialbalance.

Prepare trial balance.

Explore various options fororganizational structure.

Compare and contrast various organizational structure.

Explore various ways to identify theproduct on PLC.

Compare and contrast marketing strategy at different stage ofPLC.

Higher Level Skills

Students studying PGDBE will be expected to develop the following skills in this assignment.Cognitive skills of critical thinking, analysis and synthesis.Effective use of communication and information technology for business applications.Effective self-management in terms of planning, motivation, initiative and enterprise.

OVERALL ASSESSMENT

GRADE

GRADING OPPORTUNITIES

MERIT CRITERIA

MET

DISTINCTION CRITERIA

MET

M1 D1

M2 D2

M3 D3

Plagiarism is a serious college offence.


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I certify this is my own work have referenced all relevant materials.

TUTORS COMMENTS

OUTLINE ASSESSMENT CRITERIA

PASS

A pass grade is achieved by meeting all the requirements defined in the assessment criteria for theunit.

MERIT

In order to achieve a merit the students must:M1 Identify and apply strategies to find appropriate solutions.M2 Select/design and apply appropriate methods/techniques.M3 Present and communicate appropriate findings.

In addition, students will also show your skills in selecting appropriate sources of finance from awide range and discussing in some detail the implications of making that selection. Illustrative

figures will be used but may not be based in research carried out. Issues relating to financialplanning will be raised but may not be covered in detail, or may omit one of the four key areas.

DISTINCTION

In order to achieve a distinction the students must:D1 Use critical reflection to evaluate own work and justify valid conclusions.D2 Take responsibility for managing and organizing activities.D3 Demonstrate convergent, lateral and creative thinking.

In addition, to earn this grade the assignment must be meticulously planned and students must beable to demonstrate an ability to anticipate and solve complex tasks in relation to the case study.

Students must demonstrate considerable research over and above class materials and synthesisinformation accurately.

Name of Verifier :

Internal Verification Date :

Flooding the Indian Motorcycle Market


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"Whatever happened to ignite the market for motorcycles in India is one of those mysteries which

will never be explained satisfactorily."

- Business Line, January 2001.

A Spree of Launches

In 1999, Hero Honda, the leading motorcycle manufacturer in India, launched the CBZ 156-cc

motorcycle - and the Indian motorcycle market was never the same again. Following this, all major

players went on a 'motorcycle launching spree.' Bajaj Auto, the second largest player, launched

Bajaj Kawasaki (BK) Boxer AT and CT. This was followed by Machismo A350 and Lightning 535

from Royal Enfield, Brat (March 1999) and Kinetic Challenger (September 1999) from Kinetic

Engineering Ltd. The launches continued Hero Honda launched Joy, Passion and a remodeled

Street. Bajaj launched KB Eliminator, KB Caliber Chroma, KB Aspire and KB Acer in October

2000. Lohia Motors Limited (LML), known for its scooters, launched two motorcycles Energy and

Adreno in August 2000. Escorts Yamaha launched Crux and TVS group launched Fiero in 2000.

In August 2001, Yamaha Motors released Crux R. In September 2001, Kinetic Engineering

launched the GF 125 and GF 150. In October 2001, Bajaj launched the Pulsar and TVS launched

the TVS Victor 110-cc. The unusual aspect about these launches was the frequency - just two years

after CBZ, over 15 brands had been introduced. This was equal to the total number of brands

launched in the 4-year period prior to 1999.

While in 1992, only one out of every five vehicles sold in India was a motorcycle, in 2001, one outof every two vehicles sold was a motorcycle. During 2001, motorcycle sales crossed the two

million mark, leading the two-wheeler industry sales for the eighth consecutive year, recording a

compound growth of 25% (1993-2001). The unprecedented hectic activity in the Indian motorcycle

market between 1999 - 2001 had taken even auto analysts by surprise, with the players revealing

plans to launch more bikes in the next few years.

Background Note

The two-wheeler segment was the fastest growing segment in the Indian automobile industry. India

is the second largest user and third largest manufacturer of two-wheelers in the world.

The restrictive policy of the government towards the passenger car industry in the pre-liberalization

era, the rising demand for personal transport and the inefficiency of the public transportation system

were some factors responsible for the strong growth in the two-wheeler segment. The Indian two-

wheeler market is broadly classified into three major segments - scooters, motorcycles and mopeds.

Bajaj Auto laid the foundations of the Indian two-wheeler industry in 1948 by trading in imported


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Vespa scooters. In 1952, Enfield India Ltd. started manufacturing motorcycles, followed by Ideal

Jawa and Escorts in the 1960s.

Bajaj Auto was the undisputed leader in the scooter market, followed by LML and Kinetic. The

healthy growth of the 1980s continued through to the 1990s, and the two-wheeler segment

registered a growth of 14%. Till the 1980s, Enfield, Escorts and Ideal Jawa were the only major

players in the motorcycle segment. From the mid 1980s, the segment gradually picked up

momentum and its high growth potential forced all the major two-wheeler players to focus on the

segment.

Almost all leading players entered into joint ventures and technical collaboration agreements with

various foreign companies - mainly Japanese two-wheeler giants like Honda, Suzuki, Yamaha and

Kawasaki Heavy Industries Ltd. (Refer Table I for Tie-ups). In 2000, the motorcycle market was

characterized by the presence of sub-segments based on price - the premium segment (Rs 45,000

and above), the mid-segment (Rs 40,001-45,000) and the entry segment (up to Rs 40,000).

Major players in the premium segment were Hero Honda, Enfield, Escorts Yamaha, TVS-Suzuki

and Bajaj. In the mid-segment, the activity zone with high competition, Hero Honda was the market

leader with a 35% share, followed by Bajaj and TVS Suzuki. In the entry segment, Bajaj Auto was

the leading player followed by Hero Honda and Escorts and TVS-Suzuki All the segments in

motorcycle market, specifically the high-growth mid-segment were characterized by intense

competition. In terms of market share in 1999-00, Hero Honda was the leader (43%), followed by

Bajaj Auto (24%), TVS-Suzuki (19%), Yamaha (14%) and Royal Enfield (1%)

Added to that, factors like increased production in 1992 due to the entry of new players resulted in

companies either reporting losses or a fall in profits. In 1993, the recession began to ease off and the

growth in the motorcycles segment began. The two-wheeler industry saw large-scale structural

changes. With the launch of lighter, 100-cc motorcycles, a significant inter-segment shift began to

take place and motorcycles sales began to grow. The popularity of Hero Honda motorcycles during

this period accelerated the demand for motorcycles.

Soon, the motorcycle segment garnered the largest share of the total two-wheeler sales. The two-

wheeler industry grew at a CAGR of 14.6% between 1993 and 99, aided largely by the above


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average performance of the motorcycle segment, which grew at a CAGR of 24.3% compared to

11% and 8.6% for scooters and mopeds respectively.

Until 1997, all three segments grew in size, however from the fiscal 1999; motorcycles started

directly eating into scooter sales. The demand shift from scooters to motorcycles in the 1990s was

without parallel in any comparable product category in India. This was mainly attributed to the

change in customers' preference towards fuel-efficient and aesthetically appealing models, which

scooter manufacturers failed to provide. The delayed launch of new, advanced scooter models, fear

of four stroke scooters being prone to increased skidding risks and vibrations and the difficulty of

maintenance also contributed to this shift. Interestingly, the growth in the motorcycle segment was

mainly driven by the demand from rural and semi-urban consumers. An estimated 60% of the

demand for motorcycles came from rural and semi-urban customers.

The joint venture agreement (Hero Honda) between Hero Motors and Honda Motors was ended in

2004. The reasons for these break-ups were varied and included differences over issues such as

launch of new models, ad spend, marketing strategies, the foreign counterparts' inability to offer

fuel-efficient and innovative technology etc. As a result of these break-ups, Indian companies were

forced to invest heavily in research and development for manufacturing indigenously developed

models. Analysts remarked that this was just the beginning of a turbulent phase for Indian

motorcycle manufacturers.

Most of the companies are working with their dealers and working out their cash flow requirements

and how to manage funding. Following is the typical ledger account of a dealership.

As at 30.3.2009, ABC Auto has the following balances on its ledger accounts: -

AccountsBalance

000 Rs.

Bank loan 12,000

Cash 11,700Capital 13,000

Rates 1,880

Purchases 12,400

Trade creditors 11200

Sales 14,600

Sundry creditors 1,620

Debtors 12,000

Banks loan interest 1,400


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Other expenses 11,020

Vehicles 2,020

On 31.3.2009, ABC Auto made the following transactions: -

a. Bought spares for Rs 1,000,000 half for cash and half on credit.

b. Made Rs 8,00,000 of motorcycle purchases which was for credit.

c. Paid wages to staff of Rs 2,60,000 in cash.

The problems with dealer networks were how to organize financing for the customers, providebetter after sales service, follow-up sales leads and create better goodwill for their dealership.Each manufacturer had several dealers in each city. There was an urgent need to draw up anorganizational structure and have right staffing. There was also the problem of conflict amongdealerships of the same manufacturer.

The Future

Although the avalanche of motorcycles offered Indian consumers a wide variety of models to

choose from, it also resulted in increased pressure on the companies to concentrate on cost-cuts,

technology enhancements and up gradations and styling. Their margins came under pressure as

marketing costs escalated. The companies were forced to reduce prices and offer discounts to

survive the competition. Moreover, analysts were skeptical about the segment's ability to maintain

the growth rate in the years to come. One of the major assumptions underlying the motorcycles rushwas that if the market was considerably large and was growing at a constant pace, there was room

for a profitable existence for all brands. In 2001, there were over 30 motorcycle brands in the

market.

However, now with the top five brands accounting for more than 60% of the Market. Despite the

launch of more vehicles, the survival prospects of many of the individual brands were deemed to be

rather bleak. Further, the growth in the motorcycle segment was dependent on continuing favorable

market conditions. Analysts claimed that to sustain this growth rate, the segment would have to

completely cannibalize the market for scooters and a considerable part of the market for

scooterettes and mopeds. Considering the fast growing cooperates segment, with high demand from

female customers, followed by the moderately growing moped segment and the restructuring in the

scooter segment with major national and foreign players reinforcing their presence, it was unlikely


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that the entire growth in the two-wheeler sector would be due to motorcycles market, only 40% of

the market was available for all other new brands put together.

Analysts also commented that as the two-wheeler industry had grown steadily over the last eight

years, stages in the product life cycle would apply to the field sooner, rather than later and the

decline stage would invariably come some day. There was little differentiation between the brands

being launched apart from styling as most companies had introduced their four-stroke vehicles.

With the failure of the joint ventures, the expected introduction of cheaper Chinese brands, stringent

emission norms and threat from major international players, the survival of indigenous brands

looked uncertain. Constrained with the ruling price levels in the market place, limited infrastructure

and lack of technological innovations when compared to their foreign counterparts, whether the

Indian companies would succeed in generating the kind of volumes needed to sustain in the

competitive motorcycle market, remains to be seen.

You have been hired by Bajaj Auto to prepare a report in 5000 words which will be presented

to their VPs of Operations and Marketing. The report must cover the following:-

1. Draw up a Market segmentation plan for their Bajaj 150 CC Pulsar motorcycle. Explain the

reasons for your segmentation approach.

2. TVS-Suzuki has recently launched the SS 125 CC scooter. Draw up a marketing plan to

compete with Honda Activa.Can Bajaj get in to this segment? Why or why not?

3. Hero Honda, Bajaj Auto, TVS Suzuki, Honda, and Yamaha are the major players in the

motorcycle segment. Prepare a market economics brief and suggest how Bajaj Auto can

benefit from your economic analysis.

4. Suggest an organizational structure for typical a Bajaj dealership in a city like Delhi.

Recommend ways and means to avoid inter dealer conflicts between Bajaj dealerships.

5. Prepare a trial balance for the figures of the ABC Auto dealership, as mentioned in the case.

Market Segmentation

Market Segmentation


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Market segmentation is the identification of portions of the market that are differentFrom one another. Segmentation allows the firm to better satisfy the needs of its

potential customers.`The marketing concept calls for understanding customers and satisfying their needs

better than the competition. However, different customers have different needs, and itrarelyis possible to satisfy all customers by treating them alike.

Mass marketing refers to treatment of the market as a homogenous group andoffering the same marketing mix to all customers.Mass marketing allows economies of scale to be realized through mass production,mass distribution, and mass communication.The drawback of mass marketing is that customer needs and preferences differ andthe same offering is unlikely to be viewed as optimal by all customers.

If firms ignored the differing customer needs, another firm likely would enter themarket with a product that serves a specific group, and the in cumbant firms wouldlose those customers.

Target marketing on the other hand recognizes the diversity of customers and doesnot try to please all of them with the same offering.

The first step in target marketingis to identify different market segments and theirneeds.

Requirements of Market Segments

In addition to having different needs, for segments to be practical they should beevaluated against the following criteria:

Identifiable: the differentiating attributes of the segments must be measurableso that they can be identified.

Accessible: the segments must be reachable through communication anddistribution channels.

Substantial: the segments should be sufficiently large to justify the resourcesrequired to target them.

Unique needs: to justify separate offerings, the segments must responddifferently to the different marketing mixes.


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Durable: the segments should be relatively stable to minimize the cost offrequent changes.

Apart for the above mentioned a good market segmentation will result in

segment members that are internally homogenous and externally heterogeneous;

that is, as similar as possible within the segment, and as different as possible

between segments

Bases for Segmentation in Consumer Market

Market segmentation can be classified on the basis of the following

Geographic Demographic

Psychographic

Behavioralistic

Geographic Segmentation

The following are some examples of geographic variables often used insegmentation.

Region: by continent, country, state, or even neighborhood Size of metropolitan area: segmented according to size of population Population density: often classified as urban, suburban, or rural Climate: according to weather patterns common to certain geographic regions

Demographic Segmentation

Some demographic segmentation variables include: Age Gender Family size Family lifecycle Generation: baby-boomers, Generation X, etc. Income Occupation Education Ethnicity Nationality Religion


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Social class

Many of these variables have standard categories for their values. For example,familylifecycle often is expressed as bachelor, married with no children

Psychographic Segmentation

Psychographic segmentation groups customers according to their lifestyle. Activities,interests, and opinions (AIO) surveys are one tool for measuring lifestyle. Some

psychographic variables include:

Activities Interests Opinions

Attitudes Values

Behavioralistic Segmentation

Behavioral segmentation is based on actual customer behavior toward products.Some

behavioralistic variables include:

Benefits sought Usage rate Brand loyalty User status: potential, first time, regular, etc. Readiness to buy Occasions: holidays and events that stimulate purchases

Behavioral segmentation has the advantage of using variables that are closely relatedto the product itself. It is a fairly direct starting point for market segmentation.

Target Market Strategies

There are several different target-market strategies that may be followed. Targeting


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strategies usually can be categorized as one of the following:

Single-segment strategy - also known as a concentrated strategy. One marketsegment (not the entire market) is served with one marketing mix. A singlesegmentapproach often is the strategy of choice for smaller companies withlimited resources.

Selective specialization- this is a multiple-segment strategy, also known as adifferentiated strategy. Different marketing mixes are offered to differentsegments. The product itself may or may not be different - in many cases onlythe promotional message or distribution channels vary.

Product specialization- the firm specializes in a particular product and tailorsit to different market segments.

Market specialization- the firm specializes in serving a particular market

segment and offers that segment an array of different products.

Full market coverage - the firm attempts to serve the entire market. Thiscoverage can be achieved by means of either a mass market strategy in which asingle undifferentiated marketing mix is offered to the entire market, or by adifferentiated strategy in which a separate marketing mix is offered to eachsegment.

Market segmentation plan for their Bajaj 150 CC Pulsar motorcycle

Market segmentation used by Bajaj to make pulsar a success were asfollows


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1. Demographic Segmentation

2. Psychographic Segmentation

Key features of Bajaj pulsar were as follows

Style All Black Engine.

Aerodynamic tank flaps.

Aggressive masked fairing with wolf eyed headlamps.

Back-lit LCD digital speedo & tachometer console. Twin slashed L.E.D tail lamp.

Engine

4 stoke, DTS-i 150 cc, 14.09 Ps.

ExhuasTEC (Torque Expansion Chamber) Technology* for the exhaust

technology.

State of the art feature at the heart of Digital Biking: Digital C.D.I. Unit,

Digital Twin Spak Ignition, TRICS III

Suspension

Telescopic front suspension with anti friction bushes.

Nitrox rear suspension (Nitrogen Oxide assisted gas shocker with

5 step adjustable suspension).

Alloy Wheels

High performance 17" alloy wheels.

Lighter, Stronger and Safer giving superior agility.

Electricals

12 V full DC.

Better starting & uniform illumination at variable speed even at stand

still.


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Frame

Beefed up frame with 1320 mm wheelbase.

More strength and high stability with exceptionally tight turning radius.

These features of the bajaj pulsar 150 dtsi gave it an distinct advantage over its

segment competitors it was alos known as aFull Paisa wasool Bike

Bajaj adopted the two market segmentations ie. Demographic Segmentation& Psychographic Segmentation

TVS-Suzuki has recently launched the SS 125 CC

scooter

Suzukis 125cc Access

Suzuki launched in its much expected 125cc Variomatic scooter the Access onseptember. Access is the third product from the Suzuki stable in India after Heat andZeus motorcycles. 125cc Access is the third product from the Suzuki stable in Indiaafter Heat and Zeus motorcycles. 125cc Access is powered by a 125-cc air-cooledfour-stroke engine with automatic transmission. Suzukis access featurescontemporary telescopic front suspension and a rust free body. 125cc access alsofeatures central locking system and provision for fitting a spare rear tyre at the backsimilar to the one found in Kinetic honda. Suzukis 125cc excess has an uniqueshutter mechanism for a single control point for the entire machine to avoid theft.Suzukis 125cc access is available in five colours red, blue, black, grey and silver.

125cc Access will hit the stores by the first week of next October. Suzuki willannounce the price after a pan-India roll out within two weeks time. According toSuzuki,125cc access scooter will give a mileage/fuel efficiency of 65kpl.

Booming scooter segment:

Though indian motorcycle industry fell by almost 14.4 percent in the April-Augustperiod from a year ago. Scooters is witnessing a robust growth, it rose by 19 percent


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during the same period. On an average 40000 scootes are sold every month in india.TVS scooty plus, Honda Activa, Hero Honda pleasure and Bajaj kristal are prominent

players in this scooter segment. Recently, TVS unveiled an electric variant of scooty.Yamaha is mulling seriously to foray into the scooter segment. TVS also plans a newscooter next year.

In August 2007, Kinetic Sym introduced indias first 125cc scooter flyte. Suzukisaccess will compete with the flyte. The flyte is priced around Rs37000. Suzukis125cc access is expected to be priced on a similar front.

Suzukis plans

Suzuki will introduce a 150cc motorcycle early 2008. Apart from the 150cc bikesuzuki will launch another model next year(possibly a 175cc model). Since sales oftwo models in the 100cc and 125cc segments have slumped, we are looking at themarket for 150cc bikes now. We are also considering launching a 175cc bike, but itwill depend on how the premium segment grows, Suzuki said. Altogether a total ofthree launches in the next two years. With these launches, Suzuki plans to capture 4%market share(at present suzuki holds 1%) in the indian two-wheeler market in thenext three years. Suzuki also plans to double its dealership network from its existing145 in next two years.

Suzuki had already announced Rs 700 crore investment till 2010 for the indianmarket. Presently Suzuki sellss of 7,000 units of heat and zeus per month. Suzukitarget sales of 5,000 units of 125cc access per month.

Market features that make Access have an edge over its segment competitor

The Access marks Suzukis long awaited entry in the scooter sphere and these daysevery new entrant is expected to match orraise the benchmark, the benchmark beingour reigning queen of hearts, the Hero Honda Pleasure, that got all our sighs and

praises with her cute looks and zippy performance; absolutely chic. Nevertheless, it isnigh on impossible to discount the Honda Activa. She might have grown grey hairs

but she still continues to be the highest selling scooter in the market, backed by herreputation for bulletproof reliability. Beating the Activa will take some doing on theAccesss part, not to mention the Flyte. And so the field is set for the newbies to takethe fight to the past champs and adding to the mix is our scooterette champ, the TVSScooty Pep+. Lacking a few vital cee-cees she might be but then again shes thecheapest in this bunch and could spring a surprise!


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DESIGN & BUILD

In the looks department, the Activa finds herself at the bottom of the pack. Shesdated now and in spite of a new sticker job (again?), fails to attract attention. Theonly thing that stands by the Activa is her sturdy build quality, a Honda trait thats

backed up by a full metal jacket. Being the only scooter in this test to feature a fullmetallic body it means no cracked panels or plastic bits hanging off over time, anever present worry on the other scoots. Underseat storage, though nothing great, islarge enoughto dump a half faced helmet while the wide handlebar and anaccommodating footboard as well as generous seat make for a comfortable riding

posture for all sorts of frames.

At first glance, the Access 125 looks like a face-lifted Activa; in some angles like theEterno even. Seems like Suzukis market research people have been heavily

influenced by Honda owners and that reflects in the conservative styling of theAccess. In place of sporty aggressive styling to lure the youth (who are the largest

buyers of such scoots) weve something sedate for the gray haired. Suzuki has stuckwith age-old convention while incorporating modern detailing here and there. Bulkydimensions, especially an Indian chief-style front fender and wide front apron make ita full-bodied scooter that stands out in this pack though thats not in a totally positivesense. The teardrop headlamp is big, in keeping with the overall design, while largeclear indicators integrated on the front apron are a visual relief. The rear isuninspiring and apart from the semi circular integrated tail lamp there isnt much totalk about. The tubular grab rail too is so old-school, but goes well with the overall

styling. Folding footrests, finished in silver are a nice touch

styling might not be to everyones taste but like it or not, you cant ignore theimpeccable build quality of the Suzuki. Be it fit and finish, paint job or quality of thematerials used, it earns a 10 on 10 in all respects. Seating position is similar to theActiva, but the stiffer seat can be a bummer on long hauls.

Full marks on quality to the Honda and Suzuki doesnt mean the competition is leftbehind any more. The quality stakes have gone so high that all other scooters in thiscomparo boast great attention to detail, with hardly any panel gaps or build qualityissues. And they do it with better style.

Take the TVS Scooty Pep+; she manages to look fresh like a teen just out of the highschool. The smiley headlamp and the two-tone front apron look modern and its

backed up by chick-friendly colour options that mask her age to good effect. The rear


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too is pleasing to look at and shes aptly sized for those college-going chicks thatseem to buy her in hordes. However those tiny dimensions can be a bit of a hassle forthe grown-ups, ergonomics being somewhat cramped for well-built adults with itsnarrow handlebar and footboard. The underseat storage is well lit by an LED but thespace is nothing great to write home about.

This brings us to the two best lookers of the lot, the Flyte and the Pleasure. Pleasureboasts pleasing lines ending in a pleasantly swoopy rear end with its unusual butattractive tail lamp cluster. Coupled with great fit and finish, she tops on this frontthough the Kinetic-SYM isnt much behind either. In fact the Flyte has been designed

by SYM to current international trends and features an array of add-ons like thepentalock, an on board cellphone charger and loads of underseat space. Kinetic surelyseems to have learnt from past mistakes and quality levels have been uppedmassively and its now near the best in class. The Pleasure, however, edges it out inthis respect by a wafer-thin margin.

Ride & handling

With the bar on commuting requirements and the time spent on these scooters goingup, the expectations from them have also risen. And manufacturers are delivering,making their scooters not only easy to ride but also easier on the back and striking the

best ride and handling balance is the Kinetic Flyte. I sampled many a scooters fromSYMs range during a recent visit to Taiwan and each and every one carved cornerslike you would a turkey. The Flyte is no less a corner carver and instills utmostconfidence be it maneuvering through traffic or around round-abouts. The imported

telescopic shocks up front deliver excellent feedback and coupled with the single coilover unit at the rear offer a cushy ride at all times.

Pleasure, Access and Activa follow closely. All of them are set up slightly on thestiffer side, transferring jitters through the handlebar and never being completely

plush. Overall ride is good and being slight stiff can handle round roads well. TheActiva and Pleasure are the only ones to still employ a primitive leading-link frontsuspension which, with its anti-dive mechanism, hoicks the front end during heavy

braking. Its about time Honda took note of this (to jog your memory, the Pleasure isa re-bodied Activa).

The Scooty Pep+ too feels soft and though the ride is good on average city roads, thissetup unsettles the bike whenever rough patches are encountered.

PERFORMANCE

Things have changed a lot since our last scooter shoot-out. On the refinement frontall five motors (actually four theres no difference between the Activa and


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Pleasure) are evenly matched in refinement stakes and it is difficult to pick a winner.Things are different on the displacement front with both the new scooters sporting125cc engines against the Hondas 102.1cc unit.

The 125cc unit in the Access easily comes up as the best in performance taking just6.5 seconds in the 0-60kmph dash. The power delivery is smooth and linear and

every time you whack open the throttle acceleration is punchy. The deep note of theengine brings back memories of the Nova 135 unit.The Pleasure surprises by taking just 10 seconds to reach 60kmph but then eases offand takes a while in getting to its top speed of 76.8kmph. Though the engines areidentical Pleasure feels much faster than the Activa due to a slight weight advantage.

The Flyte, on the other hand, disappoints on the performance front and though themill is equally refined, it just doesnt feel like a 125. The engine feels tuned forcomfortable city hauls and is never stressed even with the throttle pinned to the stop.

The 60kmph mark comes in a not-so-great 12.31 seconds though she remains smoothand refined as speeds build right up to her top speed of 84kmph. Two-up riding isalso a breeze with its decent mid-range punch.

The Activa takes 15.8 seconds for the 0-60kmph sprint but beats the Pleasure in thetop speed stakes registering 77.5kmph. However it is the Scooty Pep+ that feels outof its depth here, taking its own sweet time of 17.88 seconds for the 0-60kmph dash.But then again you wouldnt expect much more from her 90cc engine, the smallest ofthe lot.

However you reap rewards with the Pep+ at the pumps, the TVS topping the fuelefficiency charts delivering 58kmpl to a litre on the city run. Pleasure and Activa arenext best delivering 55.6kmpl and 49.6kmpl respectively. The larger engined scoots

prove to be a bit of a gas-guzzler, with the Flyte edging out the Access by over3kmpl, at 45.7kmpl. With all the performance packed in, the Access managed todeliver 42.6kmpl on the city cycle.

LIVING WITH IT

The two-wheeler world has a strong gender bias; men ride bikes, chicks ride scooters.I ride a bike while my mom uses a scoot to commute to and my sisters got her ownto ferry her to college, malls and movies. To be perfectly honest, Id prefer a scooterfor in-city commuting but then again, apart from the Blaze, most scooters dont havemuch of an image and are designed with the fairer sex in mind. Except for the Activaand Access which are a touch uni-sex in their outlook, suited to both men and womenthough not really having much of a drool appeal to either.

At least on that front the Scooty Pep+ has a clear focus college-going teens. Shes


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sized to fit the average teenybopper and is styled to make them squeal and thoroughlydeserves her fan following. Plus with her fuel efficiency dads love them as theirsquealy ones demand less pocket money. Mature riders though will not appreciate thegirly styling and her smallish dimensions that will cramp their egos. At Rs 37,811, itis much cheaper than the rest and makes for a good first-day-at-college present.

Next in line is the Activa, which was a benchmark for so long. Indians still love itand its taken on the role of the Chetak in todays Indian household. However her

brilliance doesnt shine brightly any more, the competition after many a hiccup hasfinally caught up and her styling is nothing if not dated. The high price tag of Rs43,470 is not justifiable but you do get proven reliability and refinement. ThePleasure, on the other hand, takes the Honda legacy a step ahead and drapes the sameunderpinning with stylish attire. The result is the cutest looking scooter of the lot thatis Oh! So feminine. The just for her tag means guys better (and will) stay awaythough at Rs 41,403, it is the cheapest 100cc scooter you can buy.

This leaves us with the Flyte and Access fighting it out for top honours. Both haveupped the capacity game with 25 extra cee-cees that add refinement and a relaxedcommute to the mix. Access is Suzukis very conservative approach to safelyestablish itself in the scooter segment. It is a scooter that guys wont mind being seenon but can prove to be an odd pick for ladies. It packs in great performance as well asergonomics and is solidly built. At Rs 44,167, OTR, Pune, it is the most expensivescooter in the segment and the fuel efficiency is a let down.

Bajajs role in the market after Suski SS 125 is launched

Bajaj has a Krystal DTS-I

In addition, it has the following features

Front Fuelling One of the most stand out feature of this scooty

Front fuel filling 1st time in category Remote opening of fuel cap.

No need to get up from the seat & open the seat for petrol filling.

Convenience of fuelling the bike while sitting. No spillage of fuel on the stuff under the seat.

Extra Large Storage Space

Largest under seat storage of ~ 22 Lts.


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Spacious, clean, secure & private storage.

Enough Space to keep all the stuff safely under the seat.

DTS-i Engine

Bundle of advance technology delivering best in category power, mileage & low emission. Best in category performance.

Penta Lock

5 Convenient functions with 1 Key.

Key location for operating Ignition, Petrol tank cap, Seat opening, Steering lock & a Uniqueaccelerator lock

Maximum convenience for the user.

SNS Suspension The unique coaxial Spring in Suspension (SNS), gives superior riding comfort on all type of

road condition

Most comfortable ride.

Fuel Gauge with Reserve Indicator

Reserve indicator on the console.

Reminder for refueling, like in premium cars.

More convenience.

The Bajaj has the Krystal DTS-I to stand out its competitors

so in my opinion Bajaj should get in to this segment

Motorcycle segment

Market Value


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The Indian motorcycles market grew by 8.9% in 2005 to reach a value of$3.1billion.

Market Value Forecast

In 2010, the market is forecast to have a value of $5.7 billion, an increase of 80.5%since 2005.

Market Volume

The market grew by 8.1% in 2005 to reach a volume of 7.1 million units.

Market Volume Forecast

In 2010, the market is forecast to have a volume of12.6 million units, an increase of78.1% since 2005.

Market Segmentation I

The motorcycles sector accounts for82.8% of the market's volume.

Market Segmentation II

India accounts for20.3% of the Asia-Pacific regional market's value.

Market Share

Hero Honda Motors Ltd. leads the market with a share of42.8%.

The Real market Picture

During the five past years, the Indian motorcycles market has seen someexcellentgrowth rates for both value and volume. Even the Chinese market hasexhibitedweaker growth rates than the Indian market. Some deceleration of growth

is forecast,but India will remain a dynamic market for the next five years.The Indian motorcycles market generated total revenues of $3.1 billion in2005, thisrepresenting a compound annual growth rate (CAGR) of 15.8% for thefive-year


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period spanning 2001-2005. In comparison, the Japanese and Chinesemarkets grewwith CAGRs of 2% and 10.2% over the same period, to reach respectivevalues of$1.5 billion and $8.1 billion in 2005.

The market consumption volumes increased with a CAGR of 13.4%between 2001-2005, to reach a total of 7 million units in 2005. The market's volume isexpected torise to 12.5 million units by the end of 2010, this representing a CAGR of12.2% forthe 2005-2010 period.Motorcycles sales proved the most attractive for the Taiwanese

motorcycles marketin 2005, generating total sales of 5.8 million units, equivalent to 82.7% ofthe market'soverall volume. In comparison, sales of mopeds generated sales of 1.2million units in2005, equating to 17.2% of the market's aggregate volume.

The performance of the market is forecast to accelerate, with ananticipated CAGR of12.5% for the five-year period 2005-2010 expected to drive the market to avalue of$5.6 billion by the end of 2010. Comparatively, the Japanese and Chinesemarketswill grow with CAGRs of 3.5% and 16.9% respectively over the same

period, to reachrespective values of $1.7 billion and $17.7 billion in 2010.

Growth potentials

The Indian motorcycles market grew by 8.9% in 2005 to reach a value

of $3.1 billion.


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The compound annual growth rate of the market in the period 2001-

2005 was 15.8%.

Table 1: India Motorcycles Market Value: $ billion, 2001-2005

Year $ billion INR billion % Growth

2001 1.7 77.0

2002 2.1 93.9 21.90%2003 2.5 110.8 18.00%

2004 2.9 127.0 14.70%

2005 3.1 138.3 8.90%

CAGR, 2001-2005: 15.8%

Market segmentation

Hero Honda Motors Ltd. leads the Indian motorcycles market with a share of42.8%.

In comparison, Bajaj Auto Ltd. generates 28% of the market share.

Table 5: India Motorcycles Market Share: % Share, by Volume, 2005

Company % Share

Hero Honda Motors Ltd. 42.80%

Bajaj Auto Ltd. 28.00%

Yamaha 5.00%

Other 24.20%

Total 100.0%

COMPETITIVE LANDSCAPE

Hero Honda continues to maintain its position as the lead manufacturer ofmotorcycletransport in India. In the fiscal year ended March 2006, the companycontinued to

post double-digit growth figures of 14% bringing the companies net profitto $220.2million.

However, the company has identified three risk factors that couldinfluence the growth


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of the company moving forward: slowing growth in the premium anddeluxe sectors;increased competition from countries such as China and the rising cost ofsteel andaluminium.

LEADING COMPANIES

Hero Honda Motors Limited

Hero Honda Motors is a manufacturer and marketer of motorcycles and spare parts.The company is a joint venture between Hero Group, India and Honda MotorsCompany of Japan. Hero Honda is headquartered in New Delhi, India.In the 2005 fiscal year, Hero Honda generated revenues of $8,596.8 million. The

company made a net profit of $810.4 million in the 2005 fiscal year.

Bajaj Auto Limited

Bajaj Auto is a manufacturer and marketer of a wide range of two and three wheeledvehicles. The company also trades auto spare parts and is a subsidiary of the BajajGroup. Bajaj Auto is headquartered in Pune, India.For the fiscal year ended March 2006, the company generated revenues of $1,937.8million, an increase of 30.7% over fiscal 2005. Net profits were recorded at $254.6

million, an increase of 46.8% over the previous year.

Yamaha Motor Co., Ltd.

Yamaha Motor manufactures a large variety of products. It is famed for itsmotorcycles, boats, snowmobiles, jet skis and generators. Yamaha Motor providesland sport and sea sport vehicles as well as common use and industrial use products.It operates many plants in countries around the world, through its subsidiaries andaffiliates and is headquartered in Shizuoka, Japan.

For the fiscal year ended December 2005, the company generated revenues of$12.49 billion, an increase of 35.9% on the previous year. The company saw a netincome of $581.4 million during fiscal 2005, an increase of 67.8% on fiscal 2004.

Market Value Forecast


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Table 6: India Motorcycles Market Value Forecast: $ billion, 2005-2010 Year $ billion INR billion % Growth 2005 3.1 138.3 8.90% 2006 3.6 160.2 15.90% 2007 4.1 181.2 13.10% 2008 4.6 202.0 11.50% 2009 5.1 225.5 11.60% 2010 5.7 249.6 10.70%

In 2010, the Indian motorcycles market is forecast to have a volume of 12.6 millionunits, an increase of 78.1% since 2005.

The compound annual growth rate of the market volume in the period 2005-2010 ispredicted to be 12.2%.

There is a lot of scope for Bajaj auto hence the market is really very open to their125 cc 150 cc segment

assessment front sheet pgdbe important : your assignment will not

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