Final Report

CHAPTER-1 : INTRODUCTION

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INTRODUCTION

HISTORY OF BIKES Through the years…

Bob Stark has been involved with Indian motorcycles throughout his entire life. Bob's father became an Indian dealer in 1918, after returning from military service during World War I. Bob still has a photo of his mother riding in a sidecar in 1923. Since Bob was born in 1934, his parents were involved with Indian cycles long before that.

At the age of 10 Bob started staying around his fathers shop, and developed quite an interest in the Indian cycles. The mechanic considered him a pest, but allowed him to do minor items, such as changing oil & polishing cycles.

By 1946 Bob was riding his own Whizzer motorbike, and in 1947 graduated to a Cushman scooter. By 1950, he had learned quite a bit more about the cycles and got his first Indian, a 741 Scout with skirted fenders. He bought the cycle for $50.00 without his father’s permission and had it for 4 months before his father knew it was his. By 1951, Bob purchased the '48 Chief, which he still rides. In addition, his father deemed the $50.00 741 Scout to be unsafe. So he traded a new Triumph 650cc even up for it. That was the best cycle deal in Bob's life. 1951 also was high school graduation, and the start of college. Some extra money was obtained during the next 3 summers by working on cycles. Bobs father had sold the Indian shop in 1952, so the work was done in the "ex" chicken coop at home. 1955 was the big change, graduation from Case Institute of Technology, Akron Ohio (Now called Case/Western) with a degree in mechanical engineering. This was a year of working days at Goodyear Tire & Rubber and nights on Indians.

A short time was spent in the army during 1956 & 1957. The off hours were spent at Herb Reiber’s Indian shop in Washington D.C. The '48 Chief (purchased in 1951) was kept about 2 miles from Fort Belvoir.

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After an army discharge in the fall of 1957 Bob returned to Goodyear Tire during the day and worked on Indians at home during the evenings. By 1957 he reopened his fathers shop part time, selling the Royal Enfield built Indians, servicing them, and servicing the older Chiefs & Scouts. By 1958 Goodyear Tire was no longer in the picture as Bob quit to spend full time at the cycle shop. In 1959 health reasons mandated a move to Florida, and more building of cycles at home, while working at Martin Marietta Corporation. 1961 was a move to California, and the nominal home workshop for night work. Later 60' s meant trips back to Florida as part of the launch crew on the first 2 moon shots from Cape Canaveral. Gary was born during this time frame and started riding between Shorty & Bob by age 2. In 1970, Starklite Cycle was formed and Bob was back to full time work on Indians. Again, Starklite took on the Indian dealership, this time for the Taiwan/Italian built models. This was different, but the main business was restoring the older Indians and manufacturing parts for them. By now Gary was riding. He got his first Indian at age 5, and his second one at age 7. He was given a '47 Chief at age 5 and he finished his restoration of it at age 16.

As the years have progressed, Indian parts have become increasingly scarcer. This has led to the need to design and build increasing amounts of Indian parts. In 1989, Gary graduated from California State University of Long Beach with an Engineering degree in Manufacturing Engineering. The engineering has helped both Bob and Gary in the production of what we believe to be the best quality of Indian parts available.The line now stands at over 3000 items. Shortly has done her part by putting up with all of this for nearly 30 years, as well as handling most of the work in connection with the Indian Motorcycle Club. Gary has started helping her last couple or years with much of the mailing and typesetting, as he has become very proficient on the computer.

In the fall of 1988, Starklite moved from Fullerton to Perris. The shop in Fullerton was left in the hands of Wilson Plank, who was employed there for 14 years. He is

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currently operating it under the name of American Indian Specialists and is running it very successfully working on Indians.

As you can see from this brief background, The Stark Family has been involved in Indians from 1918 to the present with virtually no interruptions. Starklite is a family owned business involving Bob, Shorty, and Gary, as well as others. Gary is the third generation to be involved.

The most gratifying part of the business has been the amount of nice people we have met. We consider them friends, not just a customer.

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INDIAN AUTOMOBILE INDUSTRY two-WHEELERS

2-WheelersIndia is the second largest manufacturer and producer of two-wheelers in the world. It stands next only to Japan and China in terms of the number of two-wheelers produced and domestic sales respectively. This distinction was achieved due to variety of reasons like restrictive policy followed by the Government of India towards the passenger car industry, rising demand for personal transport, inefficiency in the public transportation system etc.The Indian two-wheeler industry made a small beginning in the early 50s when Automobile Products of India (API) started manufacturing scooters in the country. Until 1958, API and Enfield were the sole producers. In 1948, Bajaj Auto began trading in imported Vespa scooters and three-wheelers. Finally, in 1960, it set up a shop to manufacture them in technical collaboration with Piaggio of Italy. Although various government and private enterprises entered the fray for scooters, the only new player that has lasted till today is LML. Under the regulated regime, foreign companies were not allowed to operate in India. It was a complete sellers market with the waiting period for getting a scooter from Bajaj Auto being as high as 12 years.The motorcycles segment was no different, with only three manufacturers viz Enfield, Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the Rajdoot were two-stroke bikes. The motorcycle segment was initially dominated by Enfield 350cc bikes and Escorts 175cc bike. The two-wheeler market was opened to foreign competition in the mid-80s. Moreover, the then market leaders -Escorts and Enfield - were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel-efficient low power bikes, demand swelled, resulting in Hero Honda - then the only producer of four stroke bikes (100cc category), gaining a top slot. The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and Hero Honda brought in the first two-stroke and four-stroke engine motorcycles respectively. These two players initially started with assembly of CKD kits, and later on progressed to indigenous

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manufacturing. In the 90s the major growth for motorcycle segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25% CAGR in the last five years. The industry had a smooth ride in the 50s, 60s and 70s when the Government prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 80s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mn vehicles in 1990. The entry of Kinetic Honda in mid-eighties with a variometric scooter helped in providing ease of use to the scooter owners. This helped in inducing youngsters and working women, towards buying scooters, who were earlier inclined towards moped purchases. In the 90s, this trend was reversed with the introduction of scooterettes. In line with this, the scooter segment has consistently lost its part of the market share in the two-wheeler market.In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles. Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94. Hero Honda showed a marginal decline in 1992. The reasons for recession in the sector were the incessant rise in fuel prices, high input costs and reduced purchasing power due to significant rise in general price level and credit crunch in consumer financing. Factors like increased production in 1992, due to new entrants coupled with the recession in the industry resulted in companies either reporting losses or a fall in profit

Rise of a Product: The Motorcycles

Motorcycles are the most expensive of all two-wheelers. They are more powerful than scooters and mopeds, have the highest load carrying capacity (which is essential for rural areas), are fuel-efficient, have better road grip, and are the most expensive. Besides, motorcycles are viewed as “trendy” in the urban areas as compared with scooters and mopeds.

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Motorcycle production in India began in 1952, when Enfield India Limited commenced manufacture at its plant in Tamil Nadu. It was the only motorcycle producer in the country until the early 1960s when Ideal Jawa (India) Private Limited and Escorts Limited entered the market. By 1970-71, production of motorcycles had reached 39,000 units per annum.

The fortunes of the motorcycle industry changed after the announcement of the liberal licensing policy in 1982 whereby foreign collaboration was allowed. In 1982, the Government allowed foreign players to enter the industry through joint ventures. Within four years, the TVS Group tied up with Suzuki, the Hero Group with Honda, the Escorts Group with Yamaha, and Bajaj Auto Limited (Bajaj Auto) with Kawasaki. TVS Suzuki introduced in 1984, Hero Honda Motors Limited (HHML) launched CD100 in 1985, and both Escorts and Bajaj Auto launched their models in 1986-87. These models catered for the upwardly mobile, middle-to-upper income group consumers who preferred a stylish, powerful vehicle that could be used as an urban personal transportation vehicle. The principal brands that competed in the 1980s were the HHML CD100 (a four-stroke 100cc), the Ind-Suzuki AX100 (from TVS, two-stroke, 100cc) and the Escorts-Yamaha RX100 (two-stroke, 100cc). While the CD100 was positioned primarily on the efficiency plank, giving riders an unprecedented mileage of 80 kms per liter (kmpl), the RX100 became popular with young buyers because of its high power. The AX100 took the middle path, balancing power with reasonable fuel efficiency. To reinforce its image of being a maker of powerful motorcycles, Escorts launched the 350cc twin-crab, twin-cylinder Yamaha RD350, a vehicle that soon gained cult status. It offered 36bhp, but was plagued by problems—very few mechanics could tune the engine and the average fuel consumption was as low as 15 kmpl. Subsequently, the product had to be discontinued. The launch of the 100cc motorcycles was path breaking, as till then the existing big models like the Yezdi, Rajdoot and Bullet could not compete with scooters.

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A significant development in the motorcycle industry during the late 1990s was the shift from two-stroke to four-stroke technology. The attraction of the four-stroke technology was earlier limited to fuel efficiency, while two-stroke held its own by offering better performance and easier maintenance. But, following the enforcement of India 2000 emission norms beginning April 1, 2000, the less polluting four-stroke has become the preferred technology. The two-stroke technology can also meet the existing environment norms, but only when supplemented by catalytic converters—an option that is both costly and shortsighted. The high temperature of the exhaust, combustion irregularities, the problem of lubricating oil contamination with metallic additives, and finally, fuel adulteration can poison the catalyst and render it completely ineffective. Further, the use of catalytic converter affects the initial pick-up of two-stroke engines, which is one of their main attractions. Given these shortcomings, most motorcycle manufacturers have offered four-stroke vehicles. While the four-stroke motorcycle segment is the fastest growing, it is also highly competitive. Competition has intensified in this segment since CY2001 when players introduced new products at a relatively fast pace. Also, new entrants have entered the market by introducing their products at lower price points, while the existing players have announced price cuts. This has led to price competition in the domestic market. At the lower end of the segment, Bajaj Auto has its Boxer range of motorcycles and Bike; HHML has Dawn as well as CD Dawn and KEL Boss. Above this segment, there are strong brands such as Victor (TVS), Passion and Splendor (HHML), Caliber 115 and Aspire (Bajaj Auto), Freedom, Adriano and Energy (LML), and Crux R (Yamaha). Through its CBZ model, HHML had tapped the premium segment of the market in 1999.

Since then, however, quite a few models such as Pulsar 180 by Bajaj Auto and Fiero by TVS have been launched in this segment. Royal Enfield is the market leader in the lifestyle segment. This segment has also attracted new model launches such as Eliminator by Bajaj Auto, Aquila by KEL and Karizma by HHML.

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The industry need to adopt suitable technology so that it can conveniently meet these horns in time since the production largely of two stroke engines figment of catalytic converter will become necessary. But it will lead some in case in prices. The life of these converter is limited to 25/30 thousand hence consumer will prefer something durable and longer lasting.

Some manufacture is therefore planning to switch over to stroke technology to comply with the emission norms. It has an additional advantage of more complete combustion of hydrocarbons in petrol, which gives higher mileage and better fuel economy. The 4 strokes bike are currently giving of fuel 70 to 80 km/hr. this will important from consumers point of view because of high price level of petrol in India. It is therefore not surprising that every major player is trying to get into the motor cycle market to have a piece of cake.

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COMPANY PROFILE

HERO HONDA LTD.

The legend of Hero Honda what started out as a Joint Venture between Hero Group, the world's largest bicycle manufacturers and the Honda Motor Company of Japan, has today become the World's single largest two-wheeler Company. Coming into existence on January 19, 1984, Hero Honda Motors Limited gave India nothing less than a revolution on two-wheels made even more famous by the 'Fill it - Shut it - Forget it ' campaign. Driven by the trust of over 5 million customers, the Hero Honda product range today commands a market share of 48% making it a veritable giant in the industry. Add to that technological excellence, an expansive dealer network, and reliable after sales service, and you have one of the most customer- friendly companies.

Hero Group > Marketing Strategy

A thorough understanding of the fast-changing consumer behavior, new market segments and product opportunities along with sensitivity to changing customer needs, form the core of Hero's marketing strategy and philosophy. At Hero, we essentially have a completely customer-driven approach. A nation-wide dealer network comprising of over 3,500 bicycle dealers, 350 dealers for mopeds and 225 franchise holders for motorcycles, ensures convenient access to the Group's products across the country.

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With a deep sense of belonging to the Hero fraternity, the Group's dealer network has catalyzed growth and acted as a strong bridge between the customers and the Group. Conventionally, very few Indian bicycle manufacturers were interested in exports. However, the Hero Group's foray into the overseas markets pioneered Indian exports in the bicycle segment as early as 1963. It was a move prompted primarily by the need to be attuned to the global marketplace. While initial exports were restricted to Africa and the Middle East, today more than 50 percent of the Group's bicycle exports meet the demands of sophisticated markets in Europe and America. This is primarily because of appropriate product development and excellent quality that Hero offers. The Group has undertaken a steady up gradation of technologies and there has been diversifications and setting up of newer establishments to meet stringent international standards. At the core of it all is a customer-centric scheme of policies and production ... and the bottom line is to "Add Value while Engineering Satisfaction."A rich background of manufacturing high value, reasonably priced products; an uncompromising pursuit of the goals to attain quality along with customer satisfaction; the resulting affinity in working cultures - brought the world's largest manufacturer of motorcycles in collaboration with the world's largest bicycle manufacturer, bringing forth a market leader. Honda Motor Company of Japan and the Hero Group entered a joint venture to setup Hero Honda Motors Limited in 1984.

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BOARD OF DIRECTORS Hero-Honda

No.

Name of the Directors Designation

1 Mr. Brijmohan Lall Munjal Chairman & Whole-time Director2 Mr. Pawan Munjal Managing Director & CEO3 Mr. Toshiaki Nakagawa Joint Managing Director4 Mr. Sumihisa Fukuda Technical Director5 Mr. Om Prakash Munjal Non-executive Director6 Mr. Sunil Kant Munjal Non-executive Director7 Mr. Masahiro Takedagawa Non-executive Director8 Mr. Satoshi Matsuzawa

(Alternate Director to Mr. Takashi Nagai)

Non-executive Director

9 Mr. Pradeep Dinodia Non-executive & Independent Director

10 Gen.(Retd.) V. P. Malik Non-executive & Independent Director

11 Mr. Analjit Singh Non-executive & Independent Director

12 Dr. Pritam Singh Non-executive & Independent Director

13 Ms. Shobhana Bhartia Non-executive & Independent Director

14. Mr. Meleveetil Damodaran Non-executive & Independent Director

15. Mr. Ravi Nath Non-executive & Independent Director

16. Dr. Anand C. Burman Non-executive & Independent Director

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The Market LeaderToday Hero Honda has managed to achieve indigenization of over 95 percent, a Honda record worldwide. Hero Honda is at present the largest-selling Indian motorcycle and the most fuel-efficient in its category - the outcome of Hero Group's foresight and another classic example of how the Group strives to provide the customer with excellence and satisfaction.

Hero Honda became the first company in the country to introduce four-stroke motorcycles and set the standards for fuel efficiency, pollution control and quality. It has a production capacity of 1.2 million motorcycles, which shall be enhanced to 1.5 million motorcycles in the coming years. It has an excellent distribution and service network spread throughout the country. Hero Honda is the market leader in motorcycles, with sales of over a million motorcycles and a strong market share of 47% during 2000-01.

Advertisement strategy

Hero Honda has snagged the brat pack — Virender Sehwag, Mohammad Kaif, Yuvraj Singh and Zaheer Khan. The two-wheeler maker, an official sponsor of the World Cup tournament to be played in South Africa in February, has brought the young and exciting cricketers of the Indian team on board as brand ambassadors.The Fab Four — along with team captain Sourav Ganguly — will feature in the ads for its latest motorcycle model: the Ambition. Hero Honda is extremely cagey about saying how much they had to fork out to bring the top cricketers to feature in the ads.Atul Sobti, senior vice-president, marketing and sales declined to say how much they planned to invest in the ad campaign. "It will give a lot of leverage to the new product Ambition by giving the image of a powerful and efficient motorcycle. The powerful-e-l bike will be well represented by the leadership qualities, power and the capacity to face any challenges," he added.

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The current ad for Ambition is tame; it shows an important file reaching a destination in time because of the power of the motorcycle. "It does not properly appeal to the customers about the power and efficiency of the product. 'Team Ambition' will be much better suited to represent the product," sources said.Hero Honda is hoping to crank up sales of Ambition because of the endorsements by the top cricketers during the World Cup when cricket fever will be at its highest.One major advantage is that none of its rivals will be able to use cricketers to endorse their products before and after the World Cup because of the ambush-marketing clause that the International Cricket Council (ICC) has worked into the players contracts.The issue had sparked a row when it was raised just before the ICC champion’s trophy in Sri Lanka in September but was resolved after a stand-off between ICC, the cricket boards of several nations and the players. Hero Honda plans to increase its market-share to 50 per cent this fiscal and is targeting sales of 10,000 Ambitions a month. Its share dipped from 48 per cent to 45 per cent. The 133 cc Ambition generates 11 bhp of thrust, which has been kept low in order to improve fuel efficiency. It has been placed in between the 125cc and 150cc motorcycle categories to draw the maximum clientele. The bike accelerates from 0-60 kmph in only six seconds.While launching the new campaign with the cricketers, Hero Honda is also drawing up plans for a couple of ads with the other brand ambassador, Hrithik Roshan. Hero Honda's association with cricket goes back to 1993, when it sponsored the Hero Cup. It was the official sponsor of the recent ICC Champions Trophy in Sri Lanka and will have the same status for the ICC World Cup in 2003. As economies open up, are Asian enterprises ready for the global battle for export markets and investment?Hero Honda sales decline 1.2 pc Our Bureau NEW DELHI, May 1

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HERO Honda, the country's largest motorcycle manufacturer, saw its sales decline by 1.2 per cent to 1,34,318 units in April 2003 from 1,35,961 units in the same month last year. According to industry sources, sales of the company could have been affected by sluggish rural demand combined with the 10-day trucker's strike affecting production as well as distribution of products in April. The company saw a growth of 16.06 per cent in sales volume during April compared to March. Meanwhile, Hero Honda is planning to launch new 200 plus cc motorcycle during May, a company release said. The company today announced that it has achieved a milestone with its Daruhera plant, in Haryana, becoming the first Indian two-wheeler plant to produce 5 million units. The 5 millionth motorcycle was a Splendor. The first motorcycle, CD100, had rolled off the assembly line in April 1985.

Customer satisfaction, a high quality product, the strength of Honda technology and the Hero group's dynamism have helped HHML scale new frontiers and exceed limits.

In the words of Mr. Brijmohan Lall Munjal, the Chairman and Managing Director, "We will continue to make every effort required for the development of the motorcycle industry, through new product development, technological innovation, and investment in equipment and facilities and through and through efficient management."

Different models of Hero Honda bikes:

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HERO HONDA CD DAWN

Technical Specifications

Engine 4 Stroke, Single Cylinder, Air Cooled

Cubic Capacity 97.2cc

Max. Power 7.4 BHP @ 8000rpm

Gear Box 4 Speed

Ignition CDI

Front Brakes 130mm Drum

Rear Brakes 110mm Drum

Front Tyre 2.75 X 18

Rear Tyre 3.00 X 18

Wheelbase 1230mm

Ground Clearance 160mm

Dry Weight 114 Kg

Tank Capacity 10.5 Litres

HERO HONDA SPLENDOR

Technical Specifications

Engine 4 Stroke, Single Cylinder, Air Cooled

Cubic Capacity 97.2cc

Max. Power 7.5 BHP @ 8000rpm

Gear Box 4 Speed

Ignition CDI

Front Brakes 130mm Drum

Rear Brakes 110mm Drum

Front Tyre 2.75 X 18

Rear Tyre 3.00 X 18

Wheelbase 1235mm

Ground Clearance

159mm

Dry Weight 116 Kg

Tank Capacity 12.8 Litres

Colours Black, Silver, Blue & Red

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HERO HONDA PASSION

Technical Specifications

Engine Air-cooled, 4-stroke single cylinder OHC

Displacement 97.2cc

Max. Power 7.5 Ps at 8000 rpm

Gear Box 4 Speed Constant Mesh

Max. Speed 85 Kmph.

Frame Tubular Double Cradle

Tyre Size (Front) 2.75 * 18- 4 PR /42 P

Tyre Size(Rear) 3.00*18-4/6 PR

Brakes (Front) (130mm)/ Hydraulic Disc Type (Optional)

Brakes (Rear) Internal Expanding Shoes Type (130 mm)

Ignition Electronic CDI

HERO HONDA GLAMOUR

Technical Specifications

Engine Quantum Core

Displacement 124.7 cc

Maximum Power

6.72 KW (9 BHP) @ 7000 rpm

Maximum Speed 95 kmph

Gears 4 Gears

Frame Tubular Double Cradle

Tyre Size (Front) 2.75 x 18 - 42 P / 4 PR

Tyre Size (Rear) 3.00 x 18 - 52 P / 6 PR

Headlight 35/35 W Halogen Bulb (Multi-Reflector)

Starting Kick / Self

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Starting Kick Starter

Wheelbase 1235 mm

Ground Clearance 160mm

Kerb Weight 116 kgs.

Fuel Tank Capacity

12.8 litres (Reserve 1.1 litres)

Brakes (Front) Drum / Disc

Brakes (Rear) Drum

No. of Variants 4

HERO HONDA KARIZMA

Technical Specifications

Engine 4 stroke, Single Cylinder OHC, air cooled

Displacement 223 cc

Max. Power 17.0 PS @ 7000 rpm

HERO HONDA SUPER SPLENDOR

Technical Specifications

Engine 4 Stroke, Single Cylinder

Cubic Capacity 133cc

Man Power 11BHP @ 8000rpm

Gear Box 5 Speed, Constant Mesh

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Maximum Speed 125 KMPH

Gear Box 5 speed, constant mesh

Wheelbase 1355 mm

Ground Clearance 150 mm

Tyres: Front/Rear

2.75 X 18 - 42 P/100/90 X 18 - 56 P

Fuel Tank Capacity 15.0 litre

Brake - Front Disc (276 mm diameter)

Rear Internal Expanding Shoe (130 mm)

Kerb Weight 150 kg

Ignition

Digital - CDI (AMI-Advanced Microprocessor Ignition System)

Starting Kick + Self

Ignition Digital CDI System

Front Brakes 130mm Drum

Rear Brakes 130mm Drum

Front Tyre 2.75 X 18

Rear Tyre 3.00 X 18

Wheelbase 1285mm

Ground Clearance 150mm

Ground Clearance 150mm

Dry Weight 126.5 Kg

Tank Capacity 12.5 Litres

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HERO HONDA PLEASURE

Engine Air-cooled, 4-stroke single cylinder OHC

Bore x Stroke 50.0 x 52.0 mm

Displacement 102 cc

Compression Ratio 9.0 : 1

Maximum Power 5.22 kW (7bhp) @ 7000 RPM

Maximum Torque 7.85 Nm @ 5000 RPM

Maximum Speed 77 kmph

Clutch Dry, Automatic Centrifugal Clutch

Ignition C D I

Starting Self-start

Front Suspension Bottom Link with Spring-loaded Hydraulic Damper

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Rear Suspension 150 kg

Ignition Swing Arm with Spring-loaded Hydraulic Damper

Length x Width x Height 1750 mm x 705 mm x 1100 mm

Wheel Base 1240 mm

Ground Clearance 125 mm

Kerb Weight 104 kg

Tyre Size* Front 3.50 x 10 - 4PR / 51 J

Rear 3.50 x 10 - 4PR / 51 J

Front Brake Internal Expanding Shoe Type (130 mm)Non-asbestos Type

Rear Brake Internal Expanding Shoe Type (130 mm)Non-asbestos Type

Fuel Tank Capacity 5 Ltrs (Min)

Head Lamp 35W / 35W Halogen Bulb (Multi-reflector Type)

Battery 12 V-5 Ah

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Sales of HERO HONDA Bikes:-

Feb 2008 1,59,508

Jan 2008 1,67,592

Jan 2007 1,97553

Jan 2006 1,87,334

Dec 2006 1,856239

Dec 2005 1,56,296

HERO HONDA close calendar year2007 with sale of over 33 lakhs bikes.

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BAJAJ AUTO LIMITED

The Bajaj Group came into existence during the turmoil and the heady euphoria of India's freedom struggle. Jamnalal Bajaj, founder of the Bajaj Group, was a confidante and disciple of Mahatma Gandhi, and was deeply involved in the effort for freedom. The integrity, dedication, resourcefulness and determination to succeed which are characteristic of the Company today, are often traced back to its birth during those long days of relentless devotion to a common cause.

Kamalnayan, the eldest son of Jamnalal Bajaj, succeeded his father in 1942, at the age of twenty-seven. Putting the Nation before business, he devoted himself to the latter only after India achieved independence in 1947. But when he did so, he put his heart and soul into it. Within a short while, he not only consolidated the Group, but also diversified into various manufacturing activities, elevating the Group to the status it enjoys till this day.

Rahul Bajaj today heads the Group. He has been the Chief Executive Officer of Bajaj since 1968 and is recognized as one of the most outstanding business leaders in India. As dynamic and ambitious as his illustrious predecessors, he has been recognized for his achievements at various national and international forums.

Bajaj is currently India's largest two and three-wheeler manufacturer and one of the biggest in the world. Bajaj has long left behind its annual turnover of Rs.72 million (1968), to currently register an impressive figure of Rs.42.16 billion (US$ 936 million).

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Group/ ManagementMr. Jamanalal Bajaj founded the Bajaj Group in the 30s. The group now has 24 companies, including 6 listed companies. Besides BAL, the major companies in the group are Mukand Ltd. (Alloy/ Special Steel, term key projects), Bajaj Electricals Ltd.(Electrical equipments, fans, and appliances) and Bajaj Hindustan Ltd.(Sugar, industrial alcohol)

BELIEFS

Transparency: A commitment that the business is managed along transparent lines.

Fairness: To all stakeholders in the Company, but especially to minority shareholders.

Disclosure: Of all relevant financial and non-financial information in an easily understood manner.

Supervision: Of the Company’s activities by a professionally competent and independent board of directors.

PRESENCE

Distribution network covers 50 countries. About 150,000 units likely to be exported this year.

Dominant presence in Sri Lanka, Mexico, Bangladesh, Columbia, Guatemala, Peru, Egypt, Iran and Indonesia.

Largest exporter of three-wheelers; over 40.875 units exported last year. All products customized as per market needs . 83% growth in total exports in 2002-03.

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Management Profile:

Rahul Bajaj Chairman

Madhur Bajaj Vice Chairman

Rajiv Bajaj Managing Director

Sanjiv Bajaj Executive Director

Abraham Joseph Vice President (Research & Development)

Pradeep Shrivastava President (Engineering)

S Sridhar CEO (2WH)

R C Maheshwari CEO (Commercial Vehicles)

Rakesh Sharma CEO (International Business)

C P Tripathi Vice President (Corporate)

N H Hingorani Vice President (Commercial)

Kevin P D'sa Vice President (Finance)

V S Raghavan Vice President (Corporate Finance)

S Ravikumar Vice President (Business Development)

K Srinivas Vice President (Human Resources)

Ranjit Gupta Vice President (Insurance)

J. Sridhar Company Secretary

BORAD OF DIRECTERS26

Rahul Bajaj Chairman

Madhur Bajaj Vice Chairman & Whole-Time Director

Rajiv Bajaj Managing Director

Sanjiv Bajaj Executive Director

D.S. Mehta Whole-Time Director

Kantikumar R. Podar Director

Shekhar Bajaj Director

D.J. Balaji Rao Director

J.N. Godrej Director

S.H. Khan Director

Mrs. Suman Kirloskar Director

Naresh Chandra Director

Nanoo Pamnani Director

Manish Kejriwal Director

P Murari Director

Niraj Bajaj Director

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Milestones2007September Launch of XCD DTS-Si

June National Launch of 220 cc Pulsar DTS-Fi.

April Bajaj Auto Commissions New Plant at Pantnagar, Uttarakhand

February 200 cc Pulsar DTS-i launched

January Bajaj Kristal DTS-i launched

2006  

April Bajaj Platina launched

2005  

December Bajaj Discover launched

June Bajaj Avenger DTS-i launched

February Bajaj Wave DTS-i launched

2004  

October Bajaj Discover DTS-i launched

August New Bajaj Chetak 4 stroke with Wonder Gear launched

May Bajaj CT100 Launched

JanuaryBajaj unveils new brand identity, dons new symbol, logo and brand line

2003  

October Pulsar DTS-i is launched.

October 107,115 Motorcycles sold in a month.

July Bajaj Wind 125,The World Bike, is launched in India.

February Bajaj Auto launched its Caliber115 "Hoodibabaa!" in the executive motorcycle segment.

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2001  

November Bajaj Auto launches its latest offering in the premium bike segment ‘Pulsar’.

January The Eliminator is launched.

2000  

The Bajaj Safire is introduced.

1999  

Caliber motorcycle notches up 100,000 sales in record time of 12 months. 

  Production commences at Chakan plant.

1998

June 7th Kawasaki Bajaj Caliber rolls out of Waluj. 

July 25th Legend, India’s first four-stroke scooter rolls out of Akurdi.

October Spirit launched.

1997  

 The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw are introduced.

1995  

November 29 Bajaj Auto is 50.

 Agreements signed with Kubota of Japan for the development of diesel engines for three-wheelers and with Tokyo R&D for ungeared Scooter and moped development.

 The Bajaj Super Excel is introduced while Bajaj celebrates its ten millionth vehicle.

  One million vehicles were produced and sold in this financial year.

1994  

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  The Bajaj Classic is introduced.

1991  

  The Kawasaki Bajaj 4S Champion is introduced. 

1990  

  The Bajaj Sunny is introduced.

1986  

  The Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles are introduced.

  500,000 vehicles produced and sold in a single financial year.

1985  

November 5The Waluj plant inaugurated by the erstwhile President of India, Shri Giani Zail Singh.

 Production commences at Waluj, Aurangabad in a record time of 16 months.

1984

January 19 Foundation stone laid for the new Plant at Waluj, Aurangabad.

1981  

  The Bajaj M-50 is introduced. 

1977  

  The Rear Engine Autorickshaw is introduced.

  Bajaj Auto achieves production and sales of 100,000 vehicles in a single financial year.

1976  

30

The Bajaj Super is introduced.

1975  

1972 BAL & Maharashtra Scooters Ltd. joint venture.

1972  

1971 The Bajaj Chetak is introduced.

 1971  

1970 The three-wheeler goods carrier is introduced.

 1970  

1960 Bajaj Auto rolls out its 100,000th vehicle.

 1960  

1959 Bajaj Auto becomes a public limited company. Bhoomi Poojan of Akurdi Plant.

 1959  

19489 Bajaj Auto obtains licence from the Government of India to manufacture two- and three-wheelers.

 1948  

1945 Sales in India commence by importing two- and three-wheelers.

1945

November 29Bajaj Auto comes into existence as M/s Bachraj Trading Corporation Private Limited.

31

Infrastructure

Plants

Bajaj Auto's three plants at Akurdi, Waluj and Chakan in Maharashtra and one plant at Pant Nagar in Uttaranchal, western India, produced 1,814,799 vehicles in 2004-05.

Akurdi Geared scooters, ungeared scooters, CT100 and Discover

Waluj Bajaj - Kawasaki range of motorcycles and three-wheelers

Chakan Bajaj motorcycles - Pulsar and Discover

Pant Nagar Bajaj motorcycles - Platina

Plant Locations

Bajaj Auto plants are located at:

Mumbai - Pune Road, Akurdi, Pune 411 035

Bajaj Nagar, Waluj, Aurangabad 431 136

MIDC, Plot No A1, Mahalunge Village, Chakan 410 501 Dist. Pune

Plot No. 2, Sectoe 10 Phase -II - E, Pant Nagar, Sidcul, Rudrapur Dist

Udhamsingh Nagar Uttranchal

32

AWARDS :-

Product Awards Year by

Bajaj Pulsar DTS-Fi - Bike of the Year 2007 CNBC-TV18Autocare Auto award

Bajaj Platina 100cc - Bike of the Year 2007 NDTV profit bike INDIA

Mr. Rajiv Bajaj - Man of the year 2005 2005 Car profession

Mr. Rajiv Bajaj - Automotive Man of the year 2005

2005 Bike India & NDTV India

Bajaj CT 100 - Motorcycle Total Customer Satisfaction Study 2005

2005 TNS Automotive

Bajaj Discover DTS-i - Bike of the Year 2005

2005 OVERDRIVE Awards 2005

Bajaj Discover DTS-i - Indigenous Design of the Year 2005

2005 OVERDRIVE Awards 2005

BAJAJ AUTO - Bike Maker of the Year 2004

2004 ICICI Bank OVERDRIVE Awards 2004

DTS-i Technology - Auto Tech of the Year 2004

2004 ICICI Bank OVERDRIVE Awards 2004

Bajaj Pulsar DTS-i Bike of the Year 2004 2004 ICICI Bank OVERDRIVE Awards 2004

Wind 125 Two Wheeler of the Year 2004 2004 CNBC AUTOCAR Awards 2004

Wind 125 Bike of the Year 2004 2004 Business Standard Motoring

Bajaj Pulsar 180 DTS-i BBC World Wheels Viewers Choice Two Wheeler of Year 2003

2003 BBC World Wheels Award 2003

Bajaj Pulsar 180 DTS-i BBC World Wheels Award for Best Two Wheeler between Rs 55,000 to Rs 70,000

2003 BBC World Wheels Award 2003

33

Bajaj Pulsar 150 DTS-i BBC World Wheels Award for Best Two Wheeler between Rs 45,000 to Rs 55,000

2003 BBC World Wheels Award 2003

Bajaj Boxer AT KTEC BBC World Wheels Award for Best Two Wheeler under Rs 30,000

2003 BBC World Wheels Award 2003

Bajaj Pulsar - Motorcycle Total Customer Satisfaction Study

2003 NFO Automotive

Bajaj Pulsar - Bike of the year ICICI Bank OVERDRIVE Awards 2003

Different models of Bajaj bikes:34

35

36

Bajaj Discover Electric start

Engine 4 Stroke, Single Cylinder, Air Cooled

Cubic Capacity 124.52cc

Max. Power 11.51 BHP @ 8000rpm

Gear Box 4 Speed

Ignition CDI

Front Brakes 130mm Drum

Rear Brakes 130mm Drum

Front Tyre 2.75 X 17

Rear Tyre 3.00 X 17

Wheelbase 1305mm

Ground Clearance 0mm

Dry Weight 129 Kg

Tank Capacity 10 Liters

Colours Black, Red, Blue

37

Bajaj Pulsar 198.8 ES DTSi

Engine 4-stroke, DTS-i, Oil cooled

Cubic Capacity 198.8 cc

Max. Power 18 Ps / 13.25 Kw

Gear Box 5 Speed

Ignition CDI

Front Brakes 18 Ps / 13.25 Kw

Rear Brakes Mechanically expanding 130 mm drum type

Front Tyre 90/90 x 17” Tubeless tyre, shod on aluminium

alloy wheels

Rear Tyre 120/80 x 17” Tubeless tyre, shod on

aluminium alloy wheels

Wheelbase 1345 mm

Ground Clearance 165mm

Dry Weight 145 Kg

Tank Capacity 15 Liters’

Colours Black, Silver, Orange, Blue, Dark Grey

38

Sale of BAJAJ Bikes:-

Year No.of units

Aug 2006 2,15,076

Aug 2007 2,40,875

Fy 06-07 12,82860

Fy 07-08 12,63,254

39

CHAPTER-2RESEARCH METHODOLOGY

40

RESEARCH METHODOLOGY

Meaning of Research

Research is a common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. In fact, research is an art of scientific investigation. The Advance Learner’s Dictionary of current English lays down the meaning of research as “A careful investigation or inquiry especially through search for new facts in any branch of knowledge.” Redman and Mory defines research as a ”Systematized efforts to gain new knowledge.” Some people consider research as a movement, a movement to from the known to unknown. It is actually a voyage of discovery. We possess the vital instinct of inquisitiveness for, when the unknown confronts us, we wonder and our Inquisitiveness make us probe and attain full and fuller understanding of the unknown.

Methodology

In planning and designing a specific research project, it is necessary to anticipate all the steps that must be undertaken if the project is to be successful in collecting valid and reliable information.

41

OBJECTIVES OF THE PROJECT

Primary Objective:-

To study the position of two wheeler bikes (Highlighting BAJAJ & HERO HONDA) in India.

To forecast the consumers requirements and to study the consumers preference by collecting the data through questionnaire and through other secondary resources.

To determine the consumers buying attitudes towards given bikes.

Secondary Objective:-

To determine the satisfaction level of consumer regarding various product features and various aspects of given bikes.

To determine the usage of the product. To trace the customer profile.

RESEARCH DESIGN:

The research undertaken was descriptive research in nature. The emphasis was made to understand the nature and the expectations of the customers.

TYPE OF SAMPLE DESIGN:The type of sampling that was carried out was probability (convenience) sampling due to limited resources available.

42

In non-probability sampling, I have chosen RANDOM sampling. Because this was best sampling method to do market survey. On the other aspect, to cover all consumers in Ghaziabad was easy task.

RESEARCH APPROACH: There are two basic approaches to research. Quantitative and qualitative, my approaches are both. RESEARCH INSTRUMENT:Research’s instrument is questionnaires for collecting the primary data. This is very common and flexible instrument.

COLLECTING THE DATA: Primary sources Secondary sources

Primary data:Through survey researcher obtains primary data directly from the Reader through following method. Observation method. Interview method. Questionnaires.

Observation method:Researcher went to the dealer’s showroom and service center and even parking places. Researcher directly observes the customers researcher with

43

out asking any question. Here researcher found most of the customer was empty buying behavior.Interview Method:Researcher went to the service center and parking places and collects the data through personal interview.Through Questionnaires:Researcher collects most of the data through questionnaires; researcher went to the consumers and requested them to fill the questionnaires.Secondary data: Through Company Profile Through Newspapers

Times of India Hindustan Times The Hindu Economics Times

Through Magazines Business India Business India Auto India

SAMPLING SIZE: 100 RESPONDENTSThe total number of these selected persons is called sample size. In this case, study sample units are One Hundred Only. SAMPLE AREA: Ghaziabad Raj Nagar (Sec.23, 10, RDC), Rajendra Nagar, Nehru Nagar, G.T. Road

44

CHAPTER 3 :LIMITATION OF RESEARCH STUDY

45

LIMITATIONS

Small Sample size :In my survey, I have taken a sample size of 100 customers, but only with these samples I can’t make a proper conclusion.

Time Constraint :Time for this project is not sufficient. As I go for the survey at the dealership then time for completing and filling the questionnaires is not sufficient.

Sample Area: The study was conducted in GHAZIABAD only. Hence, the study may not be useful for projection of behavioral aspect of consumers living in other cities.

Money Constraint :Budget and finance are always been constraints in doing any project.

46

FUTURE DIRECTION OF THE RESEARCH

There should be at least six months time period for conducting a useful research in any field of industry or organization.

The respondent should provide correct information as and when needed by the researcher and employees of the organization should be cooperative.

Research should try to provide more elaborate information about international marketing strategies.

There should be more elaborate and meaningful suggestions and recommendations by the researcher so that it can be helpful for the growth prospects of the industry in the future.

47

CHAPTER- 4

ANALYSIS AND INTERPRETATION

ANALYSIS

48

Q1) Which bike do you have?

Hero Honda 47

Bajaj 38

Any other 15

Hero honda

Bajaj

Any other

Q2) Which Model do you Have?

Hero Bajaj

49

Honda

Splender 21 CT 100 7

Passion 13 Discover 12

Karizma 7 Pulsar 11

Any other 6 Any other 8

0

5

10

15

20

25

1

Model Name

No

of P

erso

ns

Hero Honda

Splender

Passion

Karizma

Any other

0

24

6

8

1012

14

1

Model Name

No

of P

erso

ns

Bajaj

CT 100

Discover

Pulsar

Any other

Q3) In which family Income level do you Fall?

50

100000-200000 22

200000-300000 45

300000-400000 23

above 400000 10

0

10

20

30

40

50

1

Income level

No

of P

erso

ns

100000-200000

200000-300000

300000-400000

above 400000

Q4) For how long do you own a bike?

51

0-1 year 34

1-2 year 29

2-3 year 26

above 3 year 11

0

10

20

30

40

No of Persons

1

No of years

0-1 year

1-2 year

2-3 year

above 3 year

Q5) For what purpose do you use your Motor Bike?

52

0

5

10

15

20

OfficePurpose

Personalpurpose

JoyPurpose

Other

Purpose

Hero Honda

Bajaj

Hero Honda Bajaj

Office Purpose 9 4

Personal purpose 13 15

Joy Purpose 19 16

Other 6 3

Q6) How do you come to know about this Motor Bike?

53

No of Per sons

Hero Honda Bajaj

Newspaper 4 2

Television 23 16

Magazine 2 1

Friends & Relative 18 19

0

5

10

15

20

25

Hero Honda Bajaj

Name of Company

No

of P

erso

ns

New spaper

Television

Magzine

Friends & Relative

Q7) Does Advertisement Influence your decision in choosing a Motor

54

Bike?

Yes 87%

No 5%

Cant say 8%

Yes

No

Cant say

Q8) Do you have full knowledge about

55

Bikes before buying?

Hero Honda Bajaj

Yes 25 23

No 22 15

0

5

10

15

20

25

30

Hero Honda Bajaj

Company Name

No

of p

erso

ns

Yes

No

Q9) Which Factor below Influence

56

your decision?

Hero Honda Bajaj

Price 72% 78%

Mileage 78% 64%

Quality 65% 48%

Resale Value 40% 28%

Status symbol 10% 7%

0%

20%

40%

60%

80%

100%

Hero Honda Bajaj

Company Name

No

of P

erso

ns

Price

Mileage

Quality

Resale Value

Status symbol

Q10) How would you rate the following

57

factors of Bikes with respect to different company?

Hero Honda Bajaj

Mileage 74% 72%

Price 68% 65%

Pick up 70% 80%

Maintenance 58% 62%

Look & Shape 85% 80%

Brand Image 53% 55%

0%

20%

40%

60%

80%

100%

Hero Honda Bajaj

Company Name

No

of P

erso

ns

Mileage

Price

Pick up

Maintenance

Look & Shape

Brande Image

Q11) If new Bike with good features comes

58

in, then would you like to change your bike?

Hero Honda Bajaj

Yes 19 21

No 17 14

Cant say 11 3

0

5

10

15

20

25

Yes No Cant say

Views

No

of P

erso

ns

Hero Honda

Bajaj

59

60

FINDINGS

AMONG DIFFERENT AGE GROUP

The age group 20-25 years figures out to be very much aware regarding different bikes.

Warranty/Guarantee never influenced any age far the purchase availability of spare part is considered most important.

Mileage was given top priority. Gift schemes and finance option are not option is not more success to

influence the people.

DIFFERENT INCOME GROUP

The income group Rs. 8000-12000 seems to be very aware regarding bikes market.

OTHERS

Bajaj and Hero Honda motorbikes are most familiar by people. An ideal byke as suggested by respondents should have following

features:

Good looks

61

Good mileage Affordable price After sales services

SWOT ANALYSIS

STRENGTHS

Installed manufacturing capacity until per annum. Technical and financial collaboration In motorbike collaboration with Japanese technology. Wide range of motorbike and scooter. Successful application of cost efficient inventory management technique

of JIT. Implementation of TQM quality circle meeting and kocizen. Scheme of participation. Extensive research and development both in house development facility

and interface with other in independent engineering. Large and competent work forceWEAKENESS

Not much of media advertisement Inefficient in coupling the southern market in India.

OPPORTUNITY

Boost up production to fully utilize the installed capacity.

62

To chance of competition in the motorbike. Entry into light two wheeler category the demand of which and the ever

increase. Effectively meet the demand create by way of operation visitor creating

awareness among the rural consumer.

THREATS

Sever competition by lightweight two-wheeler, which can make a huge dent in the market Stiff competition, which as a relatively high market with active participation in both northern and southern market.

Comparatively high speed. Change in government fiscal policy import customer.

63

CHAPTER -5 : CONCLUSION

64

Conclusion1. Most   of   the   Pulsar,   CBZ   &   Karizma   are   purchased   by   young 

generation 18 to 30 because they prefer stylish looks and rest of the models of Hero Honda are purchased more by daily users who needs more average of bikes than looks.

2. Hero Honda is considered to be most fuel-efficient bike on Indian roads.

3. Service   &   Spare   parts   are   available   throughout   India   in   local markets also.

4. While buying a motorcycle, economy is the main consideration in form of maintenance cost, fuel efficiency.

5. Majority of the respondent had bought their motorcycle more than 3 years.

65

CHAPTER -6 : RECOMMENDATION

66

RECOMMENDATIONS & SUGGESTIONS

The best target market for any new product is 20 to 35 yrs and income group of 8000 to 12000.

Before the launch an aggressive advertising must be carried out in order to inform the consumer about the new bike.

The media adopted for such purpose should be electronic as it is wildly accepted.

Continuous innovation in product process and services too are recommended to get the competitive edge.

Nicely designed and fuel efficient vehicle is must to find better prospects and widen its market.

Easily available spare parts at reasonable price backed by efficient sales as competitions.

An eye on competitor’s policies and review of its own according to changing market condition will help in formulation of effective strategies from time to time.

The pricing TAG which BAJAJ is going to put on its bikes should not be more Rs.35, 000 – 50,000 in any case, because it is the price which is going to determine the success of the product.

Through demonstration in rural area so that they can get specification of bike.

67

BIBLIOGRAPHY

68

BIBLIOGRAPHY

In this project while finalizing and for analyzing quality problem in detail the following books, magazines and websites have been referred.

Books Consulted: Marketing Management – Philip Kotler Research Methodology – Kothari Business Statistics – S.P. Gupta

Magazines Consulted:

Indian Journal of Marketing IBAT Journal of Management Journal of Indian Management & Strategy Auto Expo of India

Newspapers:-

Hindustan times Times of India The Hindu Financial Express Economics times

Websites Consulted: -

www.bajajauto.com www.herohonda.com www.google.com

69

ANNEXURE

70

QUESTIONNAIRE

NAME: - ………………………………………………

CONTACT NO ……………………………………….

AGE:-  15-20                     20-25

               25-30                                     Above 30

OCCUPATION:-                       Businessman                             Employee    

 Student                                 Other

Q1) Which Bike do you have?

 Hero Honda                            Bajaj      Any Other

Q2) Which Model do you have?

Hero Honda: - Splendor         Passion

Karizma          Other

Bajaj: - CT 100                       Discover

Pulsar         Other

71

Q3) In which Family Income do you Fall?

             100000-200000              200000-300000

300000-400000                       Above 400000

Q4) For how long do you own a Bike?

0-1 year         1-2 year

2-3 year         above 3 years

Q5) For what purpose do you use your Motor Bike?

Office Purpose             Personal Purpose

Joy Purpose         Other

Q6) How do you come to know about this Motor Bike?

Newspaper                   Television

Magazines         Friends/Relatives

Q7) Does Advertisement Influence your decision in choosing a Motor Bike?

Yes No Can’t say

Q8) Do you have full knowledge about Bikes before buying?

Yes No

Q9) Which factor below influence your decision?

Price                    Mileage                Quality

Resale Value               Status Symbol

72

Q10) How would you rate the following factors of bikes with respect to different companies?

Hero Honda Bajaj

Mileage

Price

Pick up

Maintenance

Look/Shape

Brand Image

Q11) In new bike with good feature comes in, then would you like to change your bikes?

Yes No Can’t say

Q12) Any Suggestions for Company 

………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

Date: (Signature)

73