- The two-wheeler industry in India has experienced significant growth since liberalization in 1991. India is now the second largest producer of two-wheelers globally.
- Key factors driving demand include rising incomes, availability of financing, and lack of adequate public transportation. Motorcycles are a affordable transportation option.
- The major players in the two-wheeler market are Hero Honda, Bajaj, and TVS. Hero Honda is the current market leader. While the overall market is growing, motorcycle sales declined slightly in 2008.
- The two-wheeler industry in India has experienced significant growth since liberalization in 1991. India is now the second largest producer of two-wheelers globally.
- Key factors driving demand include rising incomes, availability of financing, and lack of adequate public transportation. Motorcycles are a affordable transportation option.
- The major players in the two-wheeler market are Hero Honda, Bajaj, and TVS. Hero Honda is the current market leader. While the overall market is growing, motorcycle sales declined slightly in 2008.
- The two-wheeler industry in India has experienced significant growth since liberalization in 1991. India is now the second largest producer of two-wheelers globally.
- Key factors driving demand include rising incomes, availability of financing, and lack of adequate public transportation. Motorcycles are a affordable transportation option.
- The major players in the two-wheeler market are Hero Honda, Bajaj, and TVS. Hero Honda is the current market leader. While the overall market is growing, motorcycle sales declined slightly in 2008.
- The two-wheeler industry in India has experienced significant growth since liberalization in 1991. India is now the second largest producer of two-wheelers globally.
- Key factors driving demand include rising incomes, availability of financing, and lack of adequate public transportation. Motorcycles are a affordable transportation option.
- The major players in the two-wheeler market are Hero Honda, Bajaj, and TVS. Hero Honda is the current market leader. While the overall market is growing, motorcycle sales declined slightly in 2008.
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Case: Two-Wheeler Industry in India: Rising Demand
Introduction The two wheeler industry in India has seen tremendous growth after the announcement of the new industrial policy in 1991. India is the second largest producer of two wheelers in the world. Several factors have contributed to the rise of the two-wheeler industry. After liberalization, the buying power of the Indian middle class has increased because of the increase in disposable incomes. The easy availability of financial assistance from banks and other financial institutions has also been a catalyst in the fast growth of the two-wheeler industry. Another major reason for the increase in demand for two wheelers is the poor public transport system in most parts of the country. Two wheelers are a convenient and cheap mode of transport for most Indian families.
Table 1 Sales of motorcycles, scooters, and mopeds in India in different years Sales (Units)
Source: Indian Industry: A Monthly Review, Centre for Monitoring Indian Economy Pvt Ltd, Mumbai, June 2008, reproduced with permission.
Two-Wheeler Availability and Sales in India
The Indian two-wheeler market segment includes motorcycles, scooters, and mopeds. The overall market trend is upward in all the three segments. Table 1 exhibits the sales of two wheelers in different segments.9 Owing to a decline in the motorcycle segment, the two-wheeler industry has witnessed a decline in sales about 5% in early 2008. Irrespective of this decline, experts are of the opinion that the two wheeler industry is on an upswing.
Major Players in the Market
Hero Honda Motors Ltd, Bajaj Holding & Invest. Ltd, and TVS Motor Co. Ltd are the three major players in the market. Hero Honda is the market leader in the two-wheeler industry. It became the first Indian company to cross cumulative sales of 7 million units in 2003. With a campaign slogan of "Fill it - Shut it - Forget it," Hero Honda has been consistently growing after its inception. Bajaj also has a firm footing in the market and is ranked the second in the market. TVS is the third largest two-wheeler company in India. Table 2, 3, and 4 give some statistics about the two-wheeler industry.
TABLE 2 Market segmentation of two wheelers Segment Share (%)
North 32
East 9
West 27
South 32
Source: www.indiastat.com, accessed June 2008, reproduced with permission.
TABLE 3 Product variation in two wheelers Type Share (%)
Motorcycles 66
Scooters 22
Mopeds 11
Source: www.indiastat.com, accessed June 2008, reproduced with permission.
TABLE 4 Leading players in the two wheeler industry Company Share (%)
Hero Honda 36
Bajaj Auto 23
TVS Motors 21
Yamaha 5 Honda Motors 5
LML 4
Kinetic Engineering 4
Majestic Auto 1
Royal Enfield 0.5
Source: www.indiastat.com, accessed June 2008, reproduced with permission.
1. It has been mentioned in the case that the market share of motor cycles is 66%. For a random sample of 50 potential customers, what is the expected number of customers who will purchase motorcycles? What is the probability that 10 or fewer customers will purchase motorcycles? 2. Suppose Hero Honda has implemented a quality improvement programme. The company believes that the major complaints are Poisson distributed at an average rate of 10 complaints/10,000 motorcycles sold in the first month of sales. To verify the result, the company collects data about the sales of the first 10,000 motorcycles sold. It obtains the information that 35 customers have major complaints about the motorcycles that they had purchased. The management is very particular about the quality of its product. Use Poisson distribution and examine whether the average rates of complaints have increased or whether these complaints are due to chance. 3. Suppose Hero Honda has 120 dealers distributed all over the country. The company wants to conduct a dealer satisfaction survey. The company wants to select five dealers from the whole list of dealers. It has 12 dealers in Madhya Pradesh. What is the probability that one or more randomly selected dealer is located in Madhya Pradesh?
