Hero honda - Motorcycle

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Future Strategy for Hero without Honda Hero

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Hero honda - Motorcycle

Transcript of Hero honda - Motorcycle

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Future Strategy for Hero without Honda

Hero

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Hero Honda Motors (HHML) World's largest two-wheeler manufacturing company

Three manufacturing facilities: Dharuhera

Gurgaon

Hardwar

Incorporated in 1984 as a joint venture (JV): Honda Motor Company of Japan

Hero Group India

Hero Munjal brothers brand for their flagship company Hero Cycles Ltd.

Both parties owned 26% each in the JV and the technology sharing agreement is renewed every 10 years.

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Industry:

Two Wheelers: 76.23 %

Society of Indian Automobile Manufacturing 2011

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Two Wheeler market:

Motorcycle leading

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Major Players Hero Honda Bajaj Auto TVS Yamaha Suzuki Enfield

New Harley Davidson

Total Executive class

Economy segment Premium segment

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Separation

Reasons: R & D capability sharing by Honda Pollution norms Royalty being paid by Hero to Honda: 4-5% Honda Motors

• Separate brand increasing market share

Refusal of Hero Honda to merge the spare parts business with HMI

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SWOT• Strength

•Good Quality•Leader 52%•Extensive Dealer network 550•3500 service centers•Strong marketing

Opportunity•Exports market:• Not explored yet as JV

constraint•No Royalty: 4-5%

Weakness•R&D: Dependent on Honda•Capacity constraint: 5.2million•Financial weakness: Low cash as heavy dividend•No overseas market

Threat •Market competition: • Honda, Bajaj

•R&D : Pollution norms

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Stakeholders Suppliers:

350 component suppliers

Connection with the Munjal family but supplying parts to Honda as well

Honda started looking for new supplier base

Distributers: Unique intangible resources that it has; superior brand image & reliability

perception of its brand is the outcome of these intangible & tangible key assets

Key would be the close relation based on trust and long term relationships

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Future strategies Product Branding

Splendor

Passion

Karizma

Already started work with JWT marketing communications

Corporate Branding Hero Cycle: May have negative impact

Separate as subsidiary with separate brand name

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Marketing focus: Major Sports events

Targeting young consumers

Quality Image: Huge investment required for image as quality producer or transfer of

image

International presence: Sponsor/Participate Moto – GP

Global Branding

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Build Indigenous Research & Development 3 years for capability development

In-house Develop indigenous products Scale up Hero Global Design

Possible Technological tie-up or Acquisition MV Augusta – Italy Megelli motorbikes- UK

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Global markets Huge potential

Bajaj upto 30% of sales

Major markets: African continent

South East Asia

Middle East

Establish channel partners Distribution Marketing

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Possible Impact on industry Market

Increased Competitiveness

Price war or Variant flooding

Consumer More options

Better quality

Past experience Bajaj + Kawasaki : Doing well (Still together for premium segment)

TVS + Suzuki: TVS prospered, Suzuki struggling

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Thank You