Hero Honda Motors (India)

Case Write-up
“Hero Honda Motors”

Course : HRM 380.1 ; Spring : 2020

Submitted to
Mr. Tajuddin Ahmed
Lecturer of
Department of Management, North South University
Submitted by
Group : K

Date: April 16, 2020

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Executive Summary:
The birth of the Indian two wheeler industry can be traced to the small beginnings that
it made in the early 1950s when Automobile Products of India (API)started
manufacturing scooters in the country. Although API initially dominated the scooter
market with its Lambrettas ‘, Bajaj Auto Ltd.
A company that became a legend in the global scooter industry, overlook it fairly
quickly. Although a number of government and private enterprises also entered the
scooter segment ‘almost all of them disappeared from the market by the turn of the
century. Baja Auto Ltd. stood the test of time perhaps due to its initial association
with Piaggio of Italy that provided the technological know how for the venture. The
winds of change began to take hold in the mid 80s when the Indian government
started permitting foreign companies to enter the Indian market through minority joint
ventures. Under these relaxed regulations, the two-wheeler market witnessed a
veritable boom with four Indo-Japanese joint ventures namely Hero Honda, TVS
Suzuki, Bajaj Kawasaki, and Kinetic Honda all lining up to target the Indian
consumer market for motorcycles. The simultaneous entry of the four players into this
underserved market helped boost motorcycle revenues to stratospheric heights. For
the first time, the first time market dynamics changed in favor of the Japanese players
in both two-stroke and four- stroke vehicles, and the Indian manufacturers who had
held sway for such an extended period of time were suddenly cornered. The entry of
these new foreign companies transformed the very essence of competition from the
supply side to the demand side. Two wheelers had become the standard mode of
transportation in many of India’s large urban centers. Increasing urbanization,
saturation of cities, and lack of adequate roads helped to propel demand for two
wheelers. Much of the company’s strategy was anchored to the fundamental principle
of providing products of superior value at reasonable prices to the consumer. This
basic belief was reflected in the company’s approach to product innovation, quality
and reliability. Over time, the group had nurtured an excellent network of dealers to
serve India’s expansive markets. This network was not just focused on the high-
density urban centers, but also encompassed rural outlying regions that typically did
not attract the attention of large manufactures. The company truly believed in its
mission of bringing transportation to the masses. Honda Motor Company had
surprisingly similar origins liken its counterpart in India.

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Table of Contents
Executive Summary: ....................................................................... 1

Background:................................................................................... 4

Data: .............................................................................................. 7

Main Issue: .................................................................................... 9

Theme........................................................................................... 10

SWOT Analysis............................................................................. 11

HR Issues ..................................................................................... 16

Recommendation .......................................................................... 17

Implementations ........................................................................... 18

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Hero Honda Motors (India)

Background:
Hero Honda rides SPLENDOR to Become Worlds NO.1:

India has finally got a world leader in manufacturing with “no problem.” Hero Honda
Motors Ltd. (HHM) has attained the distinction of being the largest two-wheeler
company in the world in volume terms. This performance was in conjunction with
Splendor, launched in 1995, becoming the world’s largest-selling bike.

Things could not have possibly looked any better for Mr. Brijmohan Lal Munjal, the
Chairman and Managing Director of Hero Honda Motors (HHM). Quarter after
quarter, and year over year, HHM had continued to grow, delivering superb
performance in India’s two-wheeler marketplace. Having built a storied legacy, he
could rest easy. Or could he?

The spectacular track record of the company was being threatened by predatory
moves made by its Japanese partner, Honda Motor Company. The first dark clouds
appeared on the horizon in August 1999. It was definitely not a time to rest on past
laurels.

The Two-Wheeler Industry in India:

History and Background:

India had the largest population of two-wheelers (around 41.6m vehicles) in the
world. They accounted for almost 70% of the country’s automobile market in volume
terms. India was the second largest manufacturer of two-wheelers in the world.

The birth of the Indian two-wheeler industry can be traced to the small beginnings
that it made in the early 1950s when Automobile Products of India (API) started
manufacturing scooters in the country. Although API initially dominated the scooter
market with its Lambrettas, Bajaj Auto Ltd., a company that later became a legend in
the global scooter industry, overtook it fairly quickly. Baja Auto Ltd. stood the test of
time perhaps due to its initial association with Piaggio of Italy (manufacturer of
Vespa) that provided the technological know-how for the venture.

The license raj that existed prior to economic liberalization (1940s-1980s) in India did
not allow foreign companies to enter the market, making it an ideal breeding ground
for
local players. Local players were subject to a very stringent capacity licensing
process, and imports were tightly controlled. While this segment was dominated by
Enfield’s 350cc Bullet, the only motorcycle with a four-stroke engine at the time,
Jawa and Escorts also had a fair share of the middle and lower end of the market.

The winds of change began to take hold in the mid-’80s when the Indian government
started permitting foreign companies to enter the Indian market through minority joint

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ventures. Under these relaxed regulations, the two-wheeler market witnessed a

veritable boom with four Indo-Japanese joint ventures; namely, Hero Honda, TVS
Suzuki, Bajaj Kawasaki, and Kinetic Honda all lining up to target the Indian
consumer market for motorcycles. The old-guard companies soon found themselves
under pressure to improve their offerings and bring their products on par with their
global counterparts.

The Indian Customer:

Two-wheelers had become the standard mode of transportation in many of India’s

large urban centers. Increasing urbanization, saturation of cities, and the lack of
adequate roads helped to propel demand for two-wheelers. Industry watchers reported
that India had a penetration rate of 10% as of the late 1990s (107 two-wheelers for
every 1000 adults), far below the penetration rates of other developing countries. It
was clear that the manufacturers had a lot of ground to cover.

There were indeed visible signs that the companies were gearing up to address this
growing market. While the production and sales of motorcycles grew substantially
(CAGR of 22% between 1996 and 2001), the performance of the other two segments
of two-wheelers was poor. Scooter production grew by only 0.5%, while the
production of mopeds fell by 29% during 2001-02.

The Legend of Hero Honda:

The Hero Group:

The Munjals, owners of the Hero Group and promoters of HHM, had made a modest
beginning as suppliers of bicycle components in the early ’40s. Currently, the group’s
bicycle company, Hero Cycles, manufactured over 16,000 bicycles a day and had sold
over 86 million bicycles in aggregate as of 2002. Although a publicly traded
company, the family was extensively involved in day-to-day management of
operations, as well as setting strategic direction.

Much of the company’s strategy was anchored to the fundamental principle of

providing products of superior value at reasonable prices to the consumer. This basic
belief was reflected in the company’s approach to product innovation, quality, and
reliability. The company truly believed in its mission of bringing transportation to the
masses.

Over the years, the Hero Group had entered multiple business areas, largely related to
the transportation industry. The group evolved into a fairly integrated set of
operations that spanned multiple areas of raw material processing, such as steel
rolling, to the manufacture of subassemblies and components. Thus, the company had
seemingly established control over all facets of production and marketing.
Honda Motor Company of Japan:

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Honda Motor Company had surprisingly similar origins like its counterpart in India.
Founded in 1946 as the Honda Technical Institute by Mr. Soichiro Honda, the
company produced its first bicycle engine a year later. It had parlayed this expertise
into a wide range of products such as lawnmowers, generators, scooters, motorcycles,
and cars.

Honda called its global strategy “globalization” to signify its approach of building
plants locally to meet local demand. Within this web of localized operations, the
company had been able to leverage synergies in R&D and manufacturing by
regionalizing its operations, consolidating local strategy at the regional level. In many
cases, the company was motivated to enter into joint ventures either because of
regulatory constraints or because of a desire to access local market knowledge that
was not easily available.

Forging a Partnership with Honda Motor Company:

Given the impending liberalization of India’s markets, HMC had come looking for
suitors. Initial plans called for entry both into the two-wheeler market and the electric
generator market. HMC identified a short list of Indian companies that it felt would
make good partners. Honda was already close to signing on another partner for its
other venture in power products, and hence its bid for a motorcycle JV was all that
was left in play.

HMC came to the Hero group as the last choice for its motorcycle venture. The
market for motorcycles was not booming in any sense of the term in the early ’80s.
Many Indian consumers still believed that motorcycles were more accident prone and
less safe for Indian roads. It was indeed a golden opportunity for Mr. Brijmohan Lal
Munjal to achieve the distinction of “beating Bajaj,” a seldom-vocalized desire that he
had harbored.

The Deal Is Done:

The negotiations between HMC and the Hero group had by all accounts gone quite
smoothly. Although there had been some lingering resentment that HMC had come to
Hero as a last resort, Mr. Brijmohan Lal Munjal had tried to maintain the enthusiasm
amongst the members of the Munjal family, emphasizing the benefits of the alliance
they were about to enter. The negotiations culminated in an agreement that was signed
in June 1984 creating a joint venture firm called Hero Honda Motors Ltd.

Honda agreed to provide technical know-how to HHM and assist in setting up

manufacturing facilities. This included providing the design specifications and
responsibility for future R&D efforts relating to the product lines that the company
would offer. HHM became a public company listed on the Bombay Stock Exchange
(BSE).

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Data:

With a new factory on the anvil, it is gearing itself for Operation One Billion,
targeting $1 billion revenues in 2002-03.
After Operation Million for volumes in 2001-02, our slogan for the next year is
Operation One Billion,”
This performance was in conjunction with Splendor, launched in 1995, becoming
the world’s largest-selling bike.
India had the largest population of two-wheelers (around 41.6m vehicles) in the
world
The first dark clouds appeared on the horizon in August 1999
They accounted for almost 70% of the country’s automobile market in volume
terms. The license raj that existed prior to economic liberalization (1940s-1980s) in
India did not allow foreign companies to enter the market, making it an ideal
breeding ground for local players.
This regulatory maze created a seller’s market, with customers often forced to wait
12 years just to buy a scooter from companies such as Bajaj.
In 1980 Bajaj had a waiting list that was equal to about thirteen times its annual
output, and by 1990 this list had doubled.
In a 1980 interview with a local magazine, Mr. Rahul Bajaj, the CEO of Bajaj
Auto, observed, “My marketing department? I don’t require it. I have a dispatch
department. I don’t have to go from house to house to sell.”
While this segment was dominated by Enfield’s 350cc Bullet, the only motorcycle
with a four-stroke engine at the time, Jawa and Escorts also had a fair share of the
middle and lower end of the market.
The winds of change began to take hold in the mid-’80s when the Indian
government started permitting foreign companies to enter the Indian market
through minority joint ventures.
Industry watchers reported that India had a penetration rate of 10% as of the late
1990s (107 two-wheelers for every 1000 adults), far below the penetration rates of
other developing countries. It was clear that the manufacturers had a lot of ground
to cover.
While a two-wheeler normally cost around Rs. 40,000 [1 U.S. $ = 49 Rupees
(Rs.)], an entry-level car was priced around Rs. 300,000.
Two-wheelers had long road lives, and were often used for even 15 years, passed
down from one generation to the next.
Industry watchers reported that India had a penetration rate of 10% as of the late
1990s (107 two-wheelers for every 1000 adults), far below the penetration rates of
other developing countries.
There were indeed visible signs that the companies were gearing up to address this
growing market.

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While the production and sales of motorcycles grew substantially (CAGR of 22%
between 1996 and 2001), the performance of the other two segments of two-
wheelers was poor.
Scooter production grew by only 0.5%, while the production of mopeds fell by
29% during 2001-02.
The Munjals, owners of the Hero Group and promoters of HHM, had made a
modest beginning as suppliers of bicycle components in the early ’40s.
Currently, the group’s bicycle company, Hero Cycles, manufactured over 16,000
bicycles a day and had sold over 86 million bicycles in aggregate as of 2002.
It had been acknowledged as the world’s largest bicycle manufacturer in 1986
when it overtook the U.S. manufacturer, Huffy.
Honda Motor Company had surprisingly similar origins like its counterpart in
India.
Founded in 1946 as the Honda Technical Institute by Mr. Soichiro Honda, the
company produced its first bicycle engine a year later
There had been no looking back from that time on as the company grew to
dominate the global automotive market, with over 100 plants in 33 countries
selling 11 million product units as of 2002.
Hugely popular in the late ’70s and early ’80s, KEL had a 44% share of the Indian
moped market and about 15% of the entire two-wheeler market.
It seemed to hold much promise at the time, and thus attracted the attention of
HMC. KEL and HMC entered into a 50/50 joint venture, Kinetic Honda Motors
Ltd., with the express objective of launching a line of scooters in India
HMC came to the Hero group as the last choice for its motorcycle venture. The
market for motorcycles was not booming in any sense of the term in the early ’80s.
The negotiations culminated in an agreement that was signed in June 1984 creating
a joint venture firm called Hero Honda Motors Ltd.
HHM agreed to pay Honda a lump-sum fee of $500,000 and a 4% royalty on the
net ex-factory sale price of the product.
Both partners held 26% of the equity with another 26% sold to the public and the
rest held by financial institutions.
The manufacturing plant which was established in Dharuhera in the state of
Haryana started manufacturing the CD-100 model motorcycle in 1985.
Its motorcycle volumes nearly quadrupled during the period 1997-2001, a feat
unparalleled in the Indian two-wheeler industry.

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Main Issue:
Hero Honda was among the first manufactures to understand the impact of product
differentiation and market segmentation on sales revenues and while the differentiated
positioning brought price premiums, the customer got a much more fuel-efficient and
reliable product in exchange and Honda did not seen to be concerned about the rate at
which foreign sources were replaced with Indian suppliers and with the emergence of
significant competition from similarly positioned offerings from Bajaj and TVS-
Suzuki , Hero Honda and had become more aggressive in terms of its marketing with
new product launches and market segmentation.

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Theme
The spectacular track record of the company was being threatened by predatory
moves made by its Japanese partner, Honda Motor Company. The winds of change
began to take hold in the mid-’80s when the Indian government started permitting
foreign companies to enter the Indian market through minority joint ventures. Two-
wheelers had become the standard mode of transportation in many of India’s large
urban centers. Much of the company’s strategy was anchored to the fundamental
principle of providing products of superior value at reasonable prices to the consumer.
This basic belief was reflected in the company’s approach to product innovation,
quality, and reliability. HMSI was indeed a troubling development for the Munjal
family and the shareholders of HHM. However, Mr. Munjal was looking for the silver
lining in what was apparently a huge storm cloud brewing.

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SWOT Analysis
Strength:
India is the largest market for two-wheelers.
India has the world's largest number of 2-wheelers approx. 41.6 million. Almost
70 percent of the automotive industry in the country accounted for the number.
India was the world's second largest two-wheelers producer. In the early 1950s,
when Automotive Products of India (API) started manufacturing of scooters in the
region, the Indian two-wheeled industry began to expand. While Bajaj Auto Ltd.,
which was later to be a giant in the world scooter industry, initially dominated the
scooter business with its Lambrettas, API soon overtook it. While several public
and private corporations had joined the scooter company, by the turn of the
century almost all of them had vanished from the industry. Baja Auto Ltd. kept the
time check maybe because of the original relationship between Baja and Vespa
(Piaggio Italy) that provided technological know-how.

By the late 70’s and 80’s KEL had a huge share of the
Indian market.
KEL had a 44 percent stake in India's moped industry and nearly 15 percent of the
overall dual-wheel industry, which is quite common in late 1970 and early80s.
Around the point it seemed to carry a lot of potential and thus captured HMC's
interest. With the express goal of launching a line of scooters in India, KEL and
HMC entered into a 50-50 Joint Venture, Kinetic Honda Motors Ltd. KEL has
been commonly stated to be given a option between scooters and motorcycles and
picked scooters based on the latest patterns preferring scooters. Honda was
already close to signing up with another investor in its power goods business, and
so all that remained in play was its bid for a JV motorcycle.

Under the leadership of Mr. Munjal Hero Honda Motors

had seen tremendous growth.
Under Munjal's direction, HHM expanded steadily after churning 1,3 million
motorcycles in 2001, and it won its status as the world's largest motorcycle maker.
Throughout Indian double-wheeler sector, the production of motorcycles almost
quadrupled between 1997 and 2001, an accomplishment that is unprecedented.
Although between 1997 and 2001 the motor bike industry was rising on an
average of 21.74% a year, Hero Honda reached an annual growth rate of 35.46% a
year. The numbers again increased to 0.76 million in 2001-2002, from 1.3 million
in 1999-2000. However, along the route there were some big bumps.

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Weakness:
Hero Honda Motors had too much dependency on Honda
Motors for all product innovation.
Due to Honda's reliance on all products', HHM was unable to adapt to evolving
market changes. In three countries across the world, Honda had agreed to merge its
whole R&D operations and India was not one of them. Hero Honda was then required
to wait the turn before improving Honda's R&D. New developments were not as fast
as the demands of the industry dictated. If all HHM would do was introduce different
versions which were just modifications of the standard CD-100, it became very
challenging to satisfy the consumer demand. It was particularly costly to the group, as
no innovative goods were available as competitors launched innovative goods to
boost the surge in demand between 1993 and 1996, as market revenues rose at a
combined average pace of 31 per cent annually.

The mid and the lower price segment two-wheelers gave

an huge competition.
In addition to internal demand, a trade challenge often took form when cheap Chinese
imports in 2001 were withdrawn. Monto Motors became the first to manufacture
semi-knocked-down kits in China from a world-leading motorcycle fabricator, in
Alwar, Rajasthan 4, of virtually unknown brands. The consumer spent Rs. 27,000 on
the road with a 72CC motorbike from China, Rs. 33,000 with 125cc, and 36,000 with
the 250cc motorcycle. By contrast, Indian designers looked incredibly pricey. In early
2002, about Rs. 22,000 cost a moped, around Rs. 45,000 cost a 100cc motorcycle, and
Rs. 50,000 a 125cc motorcycle.

The market penetration rate for two wheelers in India was

very insignificant around 10%.
Industrial analysts also estimated that India's penetration rate was 10 percent
below that of other developed countries in the late 1990's (107 two-wheelers per
1,000 adults). There was a variety to cover for the producers. In reality, there were
clear indications of companies planning to handle this rising sea crop. Although
the production and sales of motorcycles increased dramatically, the performance
of the two other two-wheelers was low CAGR 22 percent from 1996 to 2001.
Scooter output has risen by just 0.5%, while moped output has decreased by 29%
in 2001-2002.

Opportunities:

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The license raj did not allow foreign companies to enter

the market.
Until economic liberalization (1940s-1980s) in India, the license raj did not
encourage international companies to come on the market and rendered it suitable
for local players. Regional companies have been exposed to very strict licensing
procedures, and imports have been tightly tracked. This legislative maze generated
the demand for salespeople, who typically pressured consumers to wait 12 years
to buy a scooter from companies like Bajaj. By 1980, Bajaj had a waiting list
equivalent to about 13 times its annual production, and the list multiplied by 1990.
There was clearly no reason to incorporate constructive customer-induced
approaches.

Honda gave it technological know-how to Hero Honda

Motors.
Honda offered to supply HHM with technological resources and support set up
manufacturing facilities. This involved the concept of design and accountability
for potential research and development activities related to the company's product
lines. HHM also agreed to pay a lump sum of $500,000 and a fee of 4 percent to
Honda for such facilities on the product's estimated ex-factory sales price. The 26
percent of the shares owned by both parties was also 26 percent transferred to the
public and the remaining is kept by financial firms. In the Bombay Stock
Exchange (BSE), HHM was declared a public corporation.

Hero Honda Motors had a tremendous primary and

secondary supply chain.
For parts and subassemblies, the organization had developed an comprehensive
network of main and secondary suppliers. As the Government of India had
stipulated that within a relatively short period of time a joint venture would
indigenize manufacturing, the growth of the supply network was regarded as
crucial. By 1996, more than 95% of the motorcycle was produced from local
components, which even Honda still thought would be hard to accomplish. The
Munjals realized, however, that indigenization was not only of importance to the
Indian government but also of importance to them, as they otherwise kept
themselves in the shelter of the exchange rate of rupee-yen that was traditionally
unfavorable to Indian firms that depended upon imported components.

In 80’s Indian Government started permitting foreign

companies to enter the market through joint venture.
Winds of reform started to take root in the mid-80s, when the Indian government
started authorizing international firms to access the Indian market through

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minority joint ventures. The two-wheeler industry saw the real boom of four indo-
japanese joint projects under these relaxed rules: Hero Honda, TVS Suzuki, Bajaj
Kawasaki, and Kinetic Honda, all of them heading for an indigenous motorcycle
vehicle segment. The simultaneous business entry of four players helped fuel
engine sales to stratosphere heights, while the dynamics of the Japanese players in
the 2-hour and 4-hour cars and the Indians were modified for the first time The
Japanese player

Hero Honda was among the first manufacturers to

understand the impact of product differentiation and
market segmentation on sales revenues.
Hero Honda became one of the first automakers to realize the effect of
differentiation and customer segmentation on sales revenues. Although the
improved placement carried quality premiums, the consumer provided a far higher
fuel-efficient and consistent commodity in response. The fuel efficiency slogan
shaped the center among all HHM product releases. Three versions catering to
specific consumer segments were based on a common platform (CD-100 series).
The CD-100 was an outstanding alternative for rural and semi-urban consumers
for which the expense was important. The CD-100 SS was a simple concept of the
commercial sector. Splendor was targeted to the bottom third-class, office-going
group. Because all such goods derived from a common base, the expense of
product production was distributed over larger quantities and the standard of after-
sales support was retained, thereby lowering prices and growing profits.

Threats:
Honda Motors Company trying to establish 100%
subsidiary was a major concern for the Hero Honda
Motors.
Honda Motor Company, a Japanese affiliate, has challenged its impressive track
record through aggressive actions. In August 1999 the first dark clouds emerged.
Honda Motor Company Ltd. (HMC), the HHM joint venture company, confirmed it
will create a 100% subsidiary for scooter production and then for motorcycle
development, Honda Motorbike & Scooter India (HMSI) in India. On the
advertisement day, HHM's stock plummeted by 30%. Increasing competition has
obviously been illustrated by studies from the industry bringing another layer to an
environment riddled with substantial uncertainty.

In 2004 HHM joint venture agreement would come up for

its next revalidation

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Since HMC has withdrawn from the KHL initiative, Honda Motor Scooters India Ltd.
is preparing to set up a new business for the sole purpose of manufacturing Indian
scooters. He also declared that in 2004, ominously in the same year that the HHM
joint venture deal was due for the next re-validation, he would be joining the
motorcycle business. The Hero Group's top brass was terrified by this news. Mr.
Munjal placed a brave face on his face and announced that after Hero had signed his
plans, Honda had just made his plans public. Which led to more speculation why Mr.
Munjal should support a business which brought the fate of

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HR Issues

Where the production and sales of motorcycles was growing

substantially the performance of the other two segments of two-
wheelers was performing poor.
Authority was focused on new inventions and thus they lost focus on their
previous products or inventions which lead them to count the poor performance of
previous invention.

Hero Honda is very much dependent on Honda Motors for their

invention in industry.
Due to Honda Motors reliance on all products, HHM became too much dependent
on them and their adaptability got shaken.

Mid and Low Price segmentation between two wheelers created

competition.
It is considered as a HR Issues only because of its not so co-operative price
segmentation among the two wheelers.

Insignificant market penetration rate for two wheelers in India,

which is around 10%
Industrial analysis stated that in India the rate is below 10% and in the other
countries it is more or high than 10%. Because of these, it is considered as HR
Issue.

Honda Motors Company wants to establish 100% subsidiary

which will be a major issue for HHM industry to concern.
Where HHM is mainly dependent on Honda Motors and if they are trying to get
their separate working arena then it will be a major concern issue for HHM
regarding HR Issue.

HHM’s heavy Marketing Department which is mainly dependent

on high profile advertisements rather than focusing on other
aspects.
Rather than focusing on many things including advertisements which are mainly
heavy their Marketing Department is only focusing on advertisements and that’s
why it is considered as a HR Issue!

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Recommendation

Problem No : 01
Where the production and sales of motorcycles was growing substantially the
performance of the other two segments of two-wheelers was performing poor.

Recommendation No : 01
Authority should have the focus on every work of their production simultinously.

Justification No : 01
This initiative will be best for them as it will lead them to be able to focus n many
productions at a time!

Problem No : 02
Hero Honda is very much dependent on Honda Motors for their invention in industry.

Recommendation No : 02
Authority needs to be independent in some aspects of their business.

Justification No : 02
This initiative is the best way to protect their business form being a shadow of Honda
Motors!

Problem No : 03
Mid and Low Price segmentation between two wheelers created competition.

Recommendation No : 03
Authority needs to think twice before making price segmentation and have to make a
proper price criteria so that no competition occur in same level production.

Justification No : 03
This recommendation is the best because when the authority will make a proper
pricing list then it will be a must to follow by the dealers and distributers.

Problem No : 04
Insignificant market penetration rate for two wheelers in India, which is around 10%

Recommendation No : 04
Authority needs to work on ration of two wheelers in India to increase it.

Justification No : 04

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This initiative will help to increase the ratio in India so far in other country.

Problem No : 05
Honda Motors Company wants to establish 100% subsidiary which will be a major
issue for HHM industry to concern.

Recommendation No : 05
Authority needs to think of their own invention sometime.

Justification No : 05
As long as the authority will have the power to be independent in the market no other
issue will make them in trouble.

Problem No : 06
HHM’s heavy Marketing Department which is mainly dependent on high profile
advertisements rather than focusing on other aspects.

Recommendation No : 06
Authority needs to be focused on other marketing features rater than only focusing on
advertisements!

Justification No : 06
This initiative will help them to focus and think about other factors of marketing to
grow in all aspects!

Implementations

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Problem No : 01
Where the production and sales of motorcycles was growing substantially the
performance of the other two segments of two-wheelers was performing poor.

Recommendation No : 01
Authority should have the focus on every work of their production simultaneously.

Implementation No : 01
This initiative will be best for them as it will lead them to be able to focus n many
productions at a time!

Implementation Process No : 01
Authority should start implement the recommendation process.

Where to Implementation No : 01
Recommendation process should be implemented in operation department and check
them thoroughly
.
When to Implement No : 01
Recommended processes should start implementing form the upcoming working
schedule.

Problem No : 02
Hero Honda is very much dependent on Honda Motors for their invention in industry.

Recommendation No : 02
Authority needs to be independent in some aspects of their business.

Implementation No : 02
This initiative is the best way to protect their business from being a shadow of Honda
Motors!

Implementation Process No : 02
Authority should start implement the recommendation process.

Where to Implementation No : 02
Recommendation process should be implemented in the business activities AND
mindset of HHM.

When to Implement No : 02
Recommended processes should start implementing form ongoing work.

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Problem No : 03
Mid and Low Price segmentation between two wheelers created competition.

Recommendation No : 03
Authority needs to think twice before making price segmentation and have to make a
proper price criteria so that no competition occur in same level production.

Implementation No : 03
This recommendation is the best because when the authority will make a proper
pricing list then it will be a must to follow by the dealers and distributers.

Implementation Process No : 03
Authority should start implement the recommendation process.

Where to Implementation No : 03
Recommendation process should be implemented in the daily activities of shop.

When to Implement No : 03
Recommended processes should start implementing form ongoing working schedule.

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