Indian two-wheeler industry is divided into three sub segments – motorcycles, scooters and mopeds. The total industrry is having a complete worth around Rs 650 billion and total sales volume of 15.4 million units as on 2011-12 [crisil].Motor cycle constitutes majority of the sector with market volume share of 75%, followed by scooters with a share of 19% and remaining for the mopeds Motor cycle segment is dominated by 'Hero Moto corp', largest two manufacturer in world. The sector grew by 12 percent in 2011-12.This subsegment is further divided on the basis of launch prices into premium , executive and economy. The executive segment is the major contributor of sales followed by economy. Scooter segment is dominated by ' Honda Motorcycles and Scooters India (HMSI)', an Indian subsidiary of Honda Motor Company, Japan. It has 48 percent market share by volume of scooters.It is the fastest growing subsegment. Mopeds subsegment constitute around 6 percent by volume and is dominated by 'TVS'.
Operating in India has given competitive advantage to the two wheeler manufacturers so that they are able to export to countries in Africa, Latin America and South Asia. Factor Conditions
Firstly, availability of cheap labour has helped the companies to manufacture at lower costs as compared to Japan and Europe. Also , Indian companies has been able to get access to technology due to collaborations with International two wheelers manufacturers.Hero collaborated with Honda in 1983 which lasted till december 2010. Bajaj intially collaborated with Piaggio first and then Kawasaki. Similarly ,TVS had a venture with Suzuki motors,Japan. This has further helped in reduction of costs due to lesser spending on R&D leading to a competitive advantage.
Due to lower per capita income as comapred to Europe and America, the focus has been on cost by customers in India. Also due to growing middle class, the motorcycle manufacturers have focused heavily on executive segment. The similar demand condition in South asian countries like Srikanka and Bangladesh and Latin America has helped in growth exports of exports. The demand of Africa is also on cheaper motorcycles which presents a huge opportunity for Indian manufacturers, particularly in economy segment.
Related and Supporting Activities
The supporting industries mainly is divided into automotive components and tyres. The major players in automotive components have been Small and medium scale enterprises. Due to government support for SME's, the industry has grown.This has helped the overall automobile industry. The tyre industry on the other hand is concentrated into seven major players.However strong growth of exports restricts the price of tyres. Firm Strategy,Structure and Rivalry
Indian manufacturers have followed a low cost strategy .Due to the high volumes, manufacturers have achieved economies of scale. To further support their low cost strategy,manufacturers have maintained an efficient supply chains. Efficiency in supply chain has been achieved to by consolidating vendors and helping vendors source technology from abroad Competition in the industry is high and will further intesify due to entry of new players and reentry of some other players. Global players like Yamaha, Suzuki and Honda have started direct presence in India. These players have diverse product portfolio and vast industry experience.Reentry of old players like LML and Piaggio will further intensify the battle.
Hero Motor Corp
The company was established intially as 'Hero Honda Motors Company' in 1984 as a result of Joint venture with Honda motor company of Japan in 1983. The collaboration ended in 2010 and it was renamed to Hero Motor Corp in 2011. It is the largest manufacturer of two wheelers in the world.The company has highest market share in Indian market owing to wide product portfolio and strong distribution...
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