Analysis of 2-Wheeler industry in India

Topics: Household income in the United States, Motorcycle, Bajaj Auto Pages: 89 (22753 words) Published: October 23, 2014
Analysis of 2-wheeler Industry

Table of Contents
•Analysis of 2-wheeler Industry
• Overall Segment Review
• Motorcycle Segment
• Scooters and Mopeds Segment
• Overall Costs
• Raw Material Costs
• Selling and Distribution Costs
• R&D and Royalty costs
• Summary
• Overall Demand
• Demand-Domestic Segment wise
• Demand-Exports
• Profitability-Realizations
• Profitability-Input
Costs
2

Table of Contents
• Profitability margins
• Supply
• Short-term trends
• Rural income driving growth
• 2 wheeler penetration
• Indian 2 wheeler companies : Challenges
•Player Profiles

3

Overall Segment Review

Indian two-wheeler industry to reach Rs 650 billion in 2011-12 •Sales of the Indian two-wheeler industry were estimated at around Rs 650 billion in value terms and 15.4 in volume terms at the 2011-12. •The industry has posted healthy growth over the past 5 years, growing at a CAGR of 15 per cent and 12.7 per cent, in value and volume terms respectively.

• The Indian two-wheeler industry is divided into three segments namely motorcycles, scooters and mopeds.
• In volume as well as value terms, motorcycles lead the two-wheeler market. •In 2011-12, share of motorcycles in sales volumes was 77.6 per cent, followed by scooters (17.3 per cent) and mopeds (5.1 per cent).

• The two wheeler industry is dominated by three players - Hero MotoCorp, Bajaj Auto and TVS Motors together contribute around 80 per cent of the domestic sales volumes.
• Over last 5 years, the domestic industry has clocked a growth at a CAGR of 11.3 per cent during 2007-08 to 2011-12.

Motorcycles segment continue to rule the market
•Motorcycles can be further divided into three segments - economy, executive and premium.
• The economy segment comprises lower-end motorcycles (priced at Rs 30,000-40,000 when launched), whereas the executive segment (launch price between Rs 40,000-50,000) and premium segment (launch price higher than Rs 50,000) constitute higher-end motorcycles.

• The share of the economy segment in total motorcycles sales has been declining gradually over the last few years, falling from 33.1 per cent in 200708 to 23.7 per cent in 2011-12, as players are shifting their focus to 110-125 cc motorcycles.

Motorcycles segment continue to rule the market
•This has led to increase in share of the executive segment to total motorcycles sales from 53.4 per cent in 2007-08 to 57.9 per cent in 2011-

12.

•The share of the premium segment has gone up to 18.4 per cent in 2011-12 from 13.5 per cent in 2007-08.
•Hero MotoCorp, the market leader, holds a dominant market share of per cent and 68.7 per cent in the executive segment and economy segment respectively, whereas Bajaj Auto leads the premium segments with a market share of around 42.1 per cent.

•Global players - Honda, Yamaha and Suzuki -have been expanding their presence in the Indian motorcycles segment.
• Combined share of the three players has increased significantly from 7.4 per cent in 2007-08 to 11.7 per cent in 2011-12.

Motorcycles segment continue to rule the market
•Earlier, the scooters segment used to be classified as geared and ungeared scooters.
• Currently, the share of geared scooters has ceased to exist. •The scooters segment can be further divided into ungeared and electric. • Honda Motorcycle & Scooter India Ltd (HMSI) lead the ungeared scooter segment, from around one decade and holds 47.8 per cent domestic market share in 2011-12.

•However with the continuous capacity constraints, HMSI has lost share by around 11 per cent in last five years.

Motorcycles segment continue to rule the market
•TVS Motors holds second position in the scooters segment with a 19.4 per cent share, followed by Hero Honda (16.3 per cent).
•Mopeds, which are generally preferred in rural and semi urban areas, are currently manufactured only by TVS Motors.
•Over the past few years, Kinetic Motors, Majestic Motors and Kinetic Engineering have discontinued...
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