Vinay marketing projects final 19 7

INTRODUCTION TO THE PROJECT

The project is all about measuring the customer satisfaction in Hero Honda motors. For the past few years every company is trying to satisfy its customers. The emphasis is on ways of retaining customers, then on attracting new customers. It is easy to attract new customers then to retain old customers. So, companies are trying to focus on this aspect of customer’s satisfaction.

The sale of a product does not end with the sale transaction but it is the point at which the original marketing concept starts. The marketer has to sere that whether the customer satisfied with that particular product/service or not. The post purchase behavior is important for a marketer. If there is any cognitive dissonance in the minds of the customers then that is enough to loose a customer. Keeping this in mind the companies are giving more importance to customer satisfaction.

This project work has been done to find out whether a customer is satisfied or dissatisfied, also to measure the level of the customer satisfaction and provide this feedback to the company. The first phase of the project involves the collection of information from the customers for interpreting the characteristics based on which the customer feels satisfied or dissatisfied. This information is collected by preparing a structured questionnaire. The questionnaire consists of both open-ended and closed-ended questions. The questionnaire is designed in such a way that a customer feels convenient to answer.

The collated information through the questionnaire is analyzed and presented in a statistical form. The findings are listed and suggestions to solve problems faced have been given in the suggestion part.

INTRODUCTION TO CUSTOMER SATISFACTION

Whether the buyer is satisfied after purchase depend on the offers performance in relation to the buyer expectation. In general satisfaction is a person's feelings of pleasure or disappointment resulting from comparing a products perceived performance relation to his/her expectations. If the performance falls short of expectation, the customer is dissatisfied. If the performance matches the expectation customer is satisfied. If the performance exceeds the expectation the customer is highly satisfied.

Customer satisfaction cannot be very difficult. After all you either satisfied with the services you receive or you are not. If you don’t you are not. If it is that easy, then obtaining people's opinion about how satisfied they are with relatively straight forward matter- or is it?. Customer satisfaction is a marketing tool and a definite value added benefit. It is often perceived by customers as important as the primary product or service your organization offers. It looks at what is involved from 3 different angles, the first is from the view of an organization wishing to understand, and measures, how satisfied its customer are with the products and services they receive from it. The second is from the perspective of a research agency that has been asked to obtain feedback from customers and about their experiences when dealing with companies. Finally it considers the issue from the perspective of consumers who participate in surveys, including both business customers and members of general public

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MEANING OF CUSTOMER SATISFICATION

Customer satisfaction is a business term, is a measure of how products and

services supplied by a company meet or surpass customer expectation. It is seen as a key

performance indicator within business and part of the four prospective of balanced

score card.

In a competitive market place were businesses compete for customers, customer

satisfaction is seen as a key differentiator and increasingly has become a key element of

business strategy customer satisfaction drives successful private sector business. ] High performing businesses have developed principles and strategies for achieving customer satisfaction. This paper presents a framework or set of ideas for using customer satisfaction principles and strategies to improve the quality responsiveness, and possibility of public sector privately provided services in vulnerable communities

The framework suggested that resident who live in tough neighbourhoods can be

supported through customer satisfaction strategies to become empowered individuals who

informed perspectives influence decisions about what, how, when, and where services are

available to them.

Customer satisfaction is the customers response to the evaluation of the perceived

discrepancy between prior expectation and the actual performance of the product as

perceived after its consumption.

DEFINITION Cocotte, woodruff and Jenkins (1987) define customer satisfaction as "conceptualized as a feeling developed from an evaluation of the experience."

HERE, the timing of satisfaction response is driving consumption.

BUT there is general agreement with kotler (2003) that "customer satisfaction is a person's feeling of pleasure or disappointment resulting from comparing a products perceived performance in relation to his or her expectation."

In short customer satisfaction is "The provision of goods or services which fulfil the customer expectation in terms of quality and service, in relation to price paid."

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IMPORTANCE OF CUSTOMER SATISFACTION IT costs at least 7 times more to source a new customer than it does to retain existing one A 'satisfied' customer tells 5-7 people in a year whilst a 'dissatisfied' customer will tell 14-15 people.

Companies can boost profits anywhere from 25% to 125% by retaining a mere 5% more of their exciting customers.

Totally satisfied customers were 6 times more likely to use that services and commend it than ' satisfied' customers.

Customers who have a bad experience with you and do not complain are only 37% likely to still do business with you.

Customers who have an opportunity to complain and the complaint is achieved are 95% likely to still do business with you.

FACTORS OF CUSTOMER SATISFACTION

1. Service of quality

2. reliability of service

3. knowledge of the staff

4. Being kept informed of progress

5. The way service kept its promises

6. The way the service handled any problem Friendliness of staff

7. How sympathetic staff were to your needs

8. Speed of enquiries

9. Number of time had to contact the service.

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CHAPTER-1

INTRODUCTION

Planning for the future to achieve the long-term objective is integral to the survival

and growth of every business. Strategic planning today has to take into cognizance the rapid

changes in technology, increased competitiveness and the turbulent business environment,

also with the world becoming one big global village.

Strategy covers every aspect of business from business reengineering, new business

development, product development and brand positioning to advertisements promotional

campaigns, media and publicity. It is a game of innovation.

In fact, marketing people are involved in marketing 10 types of entities; goods,

services, experience, events, persons, places, properties, organizations, information and

ideas.

Marketing management is the art and science of choosing target markets and getting,

keeping and growing customers through creating, delivering and communicating superior

customer value.

India is second largest manufacturer and producer of two-wheelers in the world. It

stands next to Japan and China in terms of the number of two wheelers produced and

domestic sales respectively.

Indian two-wheelers industry made small beginning in early 50’s when Automobile

products of India (API) started manufacturing scooter in India. Hero Honda was established

on 13th of April 1984. The Indian two wheelers Industry can be broadly classified as

scooter, motorcycles and mopeds/scooters. In last six years domestic two-wheelers has

seen structural charges. This can be seen from the change in composition of two wheeler

sales, where the motorcycles have gained market share from the scooter and moped or

scooters segments.

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The Hero group of companies in India merged with the Honda Motor Company of

Japan in creating a No.1 mantle in the making of the company Hero Honda. Hero Honda

began operations with the establishment of the Dharuhera plant in 1985. This fully

automated plant is equipped with state-of-the-art machinery, in-house R&D set up, and

today it produces a bike every 30 seconds. To meet the growing demand, Hero Honda

opened another unit at Gurgaon, using FMS technology. It is rated as one of the most

modern motorcycle manufacturing plants in the world. The plant produces 1,800 bikes

every day.

The Indo-Japanese motorcycles segment dominated by Hero group, Bajaj and

Escorts in collaboration with Japanese vehicle manufacturers Honda, Kawasaki and Yamaha

respectively.

The primary reason for growth of two-wheelers market is attributed to the fact that

Indians, especially in the rural and semi urban areas retrying to change life style and people

in metropolitan cities are completely disappointed with the public transportation.

So, there is tremendous growth in the two-wheeler segment. Two wheeler segments

of automobiles started with bicycles and diversified into scooters and as the man started

looking for style, comfort, speed, power etc. Motor Cycles came into the picture. The

motorcycle market in the present world like any other market place is a crowded one, with

many sellers competing with each other to attract the same customer.

Hero Honda, the world’s number .1 bikes have started in early 80’s. The brand

image, quality maintenance, mileage and the style of the vehicle attracted a large number of

customers and thus made it as the No.1 bike.

The consumer is now faced with proliferation of brand models. Getting new

customers as well as retaining them is an important task of manufacturers. So service after

sales is very important. A satisfied customer brings in more name and goodwill to the

company, which is why customer satisfaction is given more importance in today’s

competitive world. A study on this aspect with Hero Honda two-wheelers at Hero Honda

Motors Ltd was made.

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NEED FOR THE STUDY

Marketing starts with identifying the needs of customers and ends in satisfying those

wants. The goal of marketing is to attract new customers by promising superior value and to

keep current customers by delivering satisfaction based on their preferences retaining them.

Without customer, no market exists. As the customers are regarded as the superiors

in today’s market, the level of satisfaction and their preferences should be keenly studied.

The two-wheeler industry has been expanding rapidly. Gone are the days when

possessing a two-wheeler was seen as a luxury. Now days, it is viewed as a mere necessity.

Prior, sale of two-wheelers was mainly confined to urban areas but lately in rural

areas the bicycles are being replaced by power driven two-wheelers such as scooters,

motorcycles.

Not only this, this industry has also customers ranging from all demographic

segments. It has been common sights that even school going children are driving two-

wheelers. The women customers are also increasing due to increase in women literacy and

employment.

Getting a new customer is difficult, than retaining a current customer is a more

difficult one and not only that it is estimated that the cost of attracting a new customer is five

times the cost of retaining current customer. It requires a great deal of effort to induce

satisfied customer to switch away from their current preference. Thus, customer satisfaction

is been given top priority in today’s competitive world.

Therefore, keeping the above stated objective in mind, this study was conducted to

ascertain the customer’s satisfaction towards Hero Honda two-wheelers in Hero Honda

Motors Ltd. In view of this, a detailed study of customer preferences, levels of satisfaction

and their complaints and suggestions was undertaken.

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OBJECTIVES

This study was conducted keeping the following objectives in mind.

1. To study the factors which influence the purchase of Hero Honda two-wheelers?

2. To know the customer level of awareness of Hero Honda two-wheelers.

3. To know the various factors, which influence customers in purchasing, they’re two -

wheelers?

4. To find the after sales service offered by Hero Honda Motors Ltd.

5. To know the customer level of satisfaction of Hero Honda two-wheelers with respect

to Hero Honda Motors Ltd.

6. To find the profile of Hero Honda two-wheeler customers.

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METHODOLOGY OF THE STUDY

The information required for this study obtained was basically through two sources.

Primary Data:

Primary Data has been gathered by a survey through a structured questionnaire.

The Data has been collected from 100 customers, through questionnaires, by using

simple random sampling. In addition interaction with the staff of Hero Honda Motors Ltd

has also given some information.

Secondary Data:

Secondary Data comprises of information obtained from annual reports, brochures,

manuals websites etc.

LIMITATIONS

I have observed the following limitations in the course of my study.

1. The areas which were selected were limited only to Hyderabad i.e., the findings are

regional and do not represent the state or country.

2. Time constraints hampered the study.

3. Since the study involved in gathering information was from upper to higher-middle class

people, interaction with them became difficult.

4. There may be respondent’s bias.

5. Even though utmost care has been taken in conducting the survey, the findings may

sometimes differ from the population.

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CHAPTER-2

INDUSTRY PROFILE

The Indian two-wheeler contributes the largest volume amongst all the segments in

automobile industry. Though the segment can be broadly categorized into 3 sub-segments

viz. scooters, motorcycles and mopeds; some categories introduced in the market are a

combination of two or more segments e.g. scooters and step-thru. The market primarily

comprises five players in the two-wheelers segment with the most of the companies having

foreign collaboration with well-known Japanese firms earlier. But most of the companies are

now planning 100% subsidiaries in India.

Two Wheeler & its role in Indian Context:

As the cities grow & suburbs expand, transportation needs becoming more & more

acute, with mounting pressure on its public transportation for which two wheelers are ideal.

The two-wheeler Industry today has a significant role in the Indian economy, with an

annual turnover of Rs. 9000 crores and compounded average growth of 10%. In recent

years, it is of the few industrial sectors in the growth phase today considers personal

transportation as one of the basic needs.

The two-wheeler industry basically comprises mopeds, scooters, scooters and

motorcycles. Mopeds are basic entry-level products aimed at lower/middle income groups,

offering company. This category dominated by TVS SUZUKI, which has a market share of

50% today. The other major players in this segment include KINETIC ENGG., HERO

MOTORS and BAJAJ AUTO.

Scooters, which found largest segment in the industry (37 percent) is dominated by

BAJAJ AUTO. It is however facing stiff competition from LML, which offers better style

and technology to the Indian customers. However, dominance of this category has been

declining because of shift in the customer preferences.

Major part of the growth in the two-wheeler industry has come from motorcycle

especially, the Indo-Japanese 100cc motorcycles, which are considered fuel efficient,

reliable and suited for rough roads.

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Scooters also growing at a fast phase and are being increasingly perceived as a better

option providing convenience and motor style, by urban customers. In this category, TVS

Scooty holds a dominant market share.

With sales of over three million vehicles, India is the second largest two-wheeler

market in the world. Vehicle has become a necessity for day-to-day busy life, with the

accelerated industrial and business activity in a liberalized environment. However, given

the limited purchasing power and to high cost of cars, majority of the middle class vehicle

users prefer two wheelers.

With sales of over million vehicles, India is the second largest two-wheelers market

in the world. China is the market leader with around 51 percent of the Asia Market, India,

Thailand; Indonesia & Taiwan are the other key markets for two-wheelers with market share

of 19 percent, 10 percent, 9 percent and 5 percent respectively.

In the last four to five years, the two-wheeler market has witnessed a market shift

towards motorcycles at the expense of scooters. In the rural areas, consumers have come to

prefer sturdier bikes to withstand the bad road conditions. In the process the share of

motorcycle segment has grown from 48% to 58%, the share of scooters declined drastically

from 33% to 25%, while that of mopeds declined by 2% from 19% to 17% during the year

2000-01. The Euro emission norms effective from April 2000 led to the existing players in

the two-stroke segment to install catalytic converters. 4-stroke motorcycles are now

replacing all the new models. Excise duty on motorcycles has been reduced from 32% to

24%, resulting in price reduction, which has aided in propelling the demand for motorcycles.

Fierce competition has also forced players to cut prices of certain models.

Competition has intensified over the last couple of years altering the dynamics in the

motorcycle segment with various companies planning to cash in on this spurt in demand by

calling off their JVs like Suzuki Motors planning to break off with TVS. Recently, Honda

Corporation of Japan announced its intentions to set up a 100% subsidiary to manufacture

scooters and motorcycles. Other players in the two-wheeler industry include Bajaj Auto

Ltd., Kinetic Motor Co.Ltd. LML and Escorts Yamaha. Low interest regime has helped in

reducing cost of loans, which will help in boosting sales of 2-wheelers, since 80% of the

two-wheelers are credit –stimulated.

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The two-wheeler industry is passing through a critical but interesting phase. For

many years, it was growing continuously but the turning point came in 1996=97 when it

started slowing down. The impact was really (MI) felt in the next year when the overall

growth was hardly two percent. This was also possible only because the motorcycle segment

showed a healthy growth of 15 percent. The scooter segment went down by 3 percent and

mopeds by 6 percent.

Another highlights are that the motorcycle sales have surpassed the scooter sales for

the first time in 1998-99. Until then, motorcycle sales were always trailing behind.

The net result is that motorcycles now account for 41 percent of the two-wheeler

market, while scooters account for 36 percent. Mopeds have been able to hold their own at

about 21 percent.

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GROWTH MOTORCYCLES

It is therefore not surprising that every major player is trying to get into the

Motorcycle market to have a piece of the cake.

Hero Honda is indisputable the leader with 38 percent share followed by Bajaj with

27 percent (includes M-80), TVS at 19 percent and Escorts at 13 percent. Now LML and

Kinetic have announced their plans to manufacture motorcycles, which are likely to come in

the market by next year. The battle is expected to be fierce but the consumer will be the

greater beneficiary.

The growth in motorcycles is slowly losing its hold. It is considered a family vehicle

but perhaps there is competition from the second hand car markets where prices have fallen

down rapidly. A1992 Maruti 800 is now available for just 70,000.

The scooter manufactures have to watch this phenomenon and bring our many new

product variants in the right price slots to sustain their shares in the market. The moped

market has been steady with an average growth of 3 percent. It is dominated by TVS which

holds 48 percent market share followed by Kinetic and Majestic Auto at 23 percent and 18

percent respectively.

In each segment, there is a wide gap between the first two contenders, which makes

their products positioning and marketing strategies most interesting. The two wheelers

market seems to be maturing. There are the usual their conventional segment of scooters,

mopeds and motorcycles. Two new segments are being created.

NEW SEGMENTS

A Step is through segment like Kinetic K4-100, Honda Street, Bajaj M-80, which is

quite close to the motorcycle segment. The other segment is scooterettes or mini scooters in

which vehicles such as Kinetic SX/Style, TVS Scooty, Hero Winner, Bajaaj

Sunny/Sprite/Saffire and LML trendy can be considered. These are vehicles under 75 cc and

largely targeted at the youth market such as college students, young boys and girls and new

couples. They get the advantage of lower excise duty at 16 percent as compared to 24

percent applicable over 75 cc. The trend is towards push button start vehicles.

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Among the majors in the two-wheeler industry, first quarter figure for the current year

of some players have been encouraging. The company sold 313,303 units last month as

compared to 325,360 units in the same month last year. With this, BAL has recorded as 87

percent growth in the motorcycle segment in the first quarter with sales of 130,577 units

(93,631 units in the corresponding period last year) BAL estimates market share of the first

quarter-Geared scooters 75.9%, unguarded scooters- 16.5%, Step-thrus-72.3% and

motorcycle-20.5%.

In the scooters segment, sales of Bajaj Sunny and Bajaj Spirit increased by 170

percent to 7,876 units. First quarter sales registered an impressive 78 percent growth with

sales of 19,562 (10,995 units). The overall sales grew by 9.3 percent in the quarter when the

company sold 3.24 lakh vehicles.

BAL however reported a decline in sales of scooters by 15.6 percent in the first

quarter. The company hopes to increase the share of motorcycle in its product basket from

18 percent last year to 30 percent by 2003-04.

Hero Honda (HHL) enjoys tremendous brand equity in the motorcycle segment.

Kinetic Motors, another important player, managed to grow in 1999-2000, when the

scooters segments a whole slipped by around 5 percent. TVS Suzuki, a motor two-wheeler

market, has reported a growth of 13 percent in the first quarter period and sold 2.19 lakh

units. Sales of motorcycles and scooters were up by 18 percent and that of mopeds by 8

percent over the same period last year.

The current year therefore promises to be a testing time for the two-wheeler industry.

Industry pundits feel that an overall growth rater of 5 percent should be possible as against 9

percent projected earlier. The sales volume therefore is expected to be around 3.8 million in

2000-2001.

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DRAMATIC CHANGES:

The new products have contributed to 25 percent of the growth and helped the

producers improve their bottom line. The year 1998-99 was a year of dramatic management

changes. Singhanias have taken overall control of LML with the withedrawal of piaggio.

Another corporate history was created with Kinetic tasking over the management control

from its Japanese partner-Honda Motor company LTD in Kinetic Honda Motors.

The coming years will see increasing competition due to the parity in products and

price. The only differentiators will be technology, quality, product range and service.

Imaginative marketing will emphasize relationship building, customer satisfaction and

relationship. All is exploring new techniques such as direct marketing and institutional sales.

Some of them are taking the vehicle actually to the customers doorstep. Now the customer is

the king.

HISTORICAL DEVELOPMENT OF TWO WHEELER INDUSTRY

India is the second largest manufacturer and producer of two-wheelers in the world.

It stands next 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 as if

respective policy followed by the Government of India towards the passenger car industry,

rising demand for personal transport, inefficiency in the public transportation system etc.,

In 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 1980, it setup a shop to manufacture them in technical collaboration with Piaggio

of Italy. The agreement expired in 1971.

In the initial stages, API it was later overtaken by Bajaj Auto dominating the scooter

segment. Although various Government and Private enterprises entered the fray for scooters,

the only new player that has lasted until today is LML.

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Under the regulated regime, foreign companies were not allowed to operate in India.

It was a complete seller 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 via

Enfield, Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the

Rajdoot were two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initially

dominated the motorcycle segment.

The two-wheeler market was opened to foreign competition in the mid 80’s. And then

the market leaders-E5corts and Enfield- were caught unaware by the onslaught of the 100 cc

bikes of the four IndoJapanese joint ventures. With the availability of fuel-efficiency low

power bikes, demand swelled resulting in Hero Honda — the only producer of four-stroke

bikes (100cc category), gaining a top slot.

The first Japanese motorcycles were introduced in the early eighties. TYS 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 manufacturing. In the 90’s 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 50’s, 60’s and70’s when the government

prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden

growth in the 80’s. The industry witnessed a steady growth of 14% leading to a peak volume

of 1.9mm 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

line with this, the scooter segment has consistently lost its part of the market share in the

two~whee1er market.

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In 1990, the entire automobile industry saw a drastic fall in demand. This

resulted in a decline of 15% in 1991 and 8% in1992, resulting in the 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 price, high

input costs and reduced purchasing power due to significant rise in general price level and

credit crunch in consumer financing. Factors as if increased production in 1992, due to new

entrants coupled with the recession in the industry resulted in either company reporting

losses or fail in profits.India is one of the very few countries manufacturing three wheelers

in the world. It is the world’s largest manufacturer and seller of three wheelers. Bajaj Auto

commands a monopoly in the domestic market with a market share of above 80%; Bajaj

Tempo, Greaves Ltd and Scooters in India share the rest.

The total number of registered two-wheelers and three-wheelers on road in India, as

on March 1998 was 27.9nm and 1 .7nin respectively. The two-wheeler population has

almost doubled in 1996 from a base of 12.6mn in 1990.

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PENETRATION OF TWO-WHEELERS:

On a base of around 28mn vehicles on Indian roads and around 175mn households,

there were only 160 motorized two-wheelers per thousand households in FY98. This

compares poorly with countries like Thailand where it is around 600 per thousand

households. Also with a household size of 5.5 persons and more than one wage earner in

about 60% of the households, the potential for a second vehicle demand is also good.

The number of households in the low-income group has fallen since FY86 and has

been more pronounced in the post-reform period. On the other hand, the number of

households in the middle, upper middle and high-income groups that form the consumer

base for twowheelers, have increased. Their share of the total number of households has

increased from 10.6% in FY88 to 20.5% inFY96. This rising income profile however, has,

been more pronounced in the urban areas as average annual growth in industry surpassed

that of agriculture in the period FY93 to FY96.

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CHAPTER-3

COMPANY PROFILE

FILL IT. SHUT IT. FORGET IT

When Hero Cycles and Honda Motor Company of Japan inked their joint venture in

India in April 1984, few could have imagined that the two would go on to create history and

become the subject of a case study at business schools, internationally.

But that's the Hero Honda saga for you. In a little over two decades, the world's

largest manufacturer of bicycles and the global leader in motorcycles have created not only

the world's single largest motorcycle company but also the most endearing and successful

joint venture for Honda Motor Company worldwide. The company has sold over 15 million

motorcycles and has consistently grown at double digits since its inception and today, every

second motorcycle sold in the country is a Hero Honda.

In two decades, Hero Honda has built two world-class manufacturing facilities at

Dharuhera and Gurgaon in Haryana that now churn out over 3 million bikes per year.

In this period, Hero Honda has set up over 2400 customer touch points, comprising a

mix of dealers, service centres and stockists across rural and urban India. Today, Hero

Honda is an amalgam of winning networks and relationships with internal and external

stakeholders, including Investors, Dealers, Vendors and Employees. These relationships

have helped the company hold on to the mantle of World No.1 for years in succession.

What makes Hero Honda well, Hero Honda, is synergy. The two partners, leaders in

their respective domains, have been able to consistently draw on each other's strengths. The

Hero Group's deep domain knowledge of the Indian market and its supplier network has

meshed with Honda's mastery over four-stroke engine technology to create modern and fuel-

efficient machines at affordable prices for India 's 250-300 million strong middle class.

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Progressively through the 1980s, the 1990s and now in the 2000s, Hero Honda

has relied on 3 R's-- Reach, Research and Reliability as its basic building blocks. Using

feedback from the market, a fully-equipped R&D center has consistently created best

practices in designing, testing and harmonization, besides placing strong emphasis on road

safety and ride quality. This emphasis has helped Hero Honda build products that are ahead

of their time.

In the 1980s, for example, Hero Honda became the first company in India to prove

that it was possible to drive a vehicle without polluting the roads. The company introduced

new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A

legendary 'Fill it - Shut it - Forget it' campaign captured the imagination of commuters

across India , and Hero Honda sold millions of bikes purely on the commitment of increased

mileage.

Hero Honda was also one of India 's first automotive companies to get close to the

customer. Over the years, feedback has flowed back and forth seamlessly through a unique

CRM program - the Hero Honda Passport Program which now has over 2.5 million

members on its roster. The program has not only helped Hero Honda understand its

customers and deliver value at different price points, but has also created a loyal community

of brand ambassadors.

The best is yet to come. Hero Honda is powering its way through a market that is

still to unleash its true potential, as barely two per cent of the population has been penetrated

so far!

It isn't surprising that the company is in no mood to take its hand off the throttle. As

Brijmohan Lall Munjal, the Chairman, Hero Honda Motors succinctly puts it, "We

pioneered India's motorcycle industry, and it's our responsibility now to take the

industry to the next level. We'll do all it takes to reach there

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HERO HONDA'S MISSION

Hero Honda’s mission is to strive for synergy between technology, systems and

human resources, to produce products and services that meet the quality, performance and

price aspirations of its customers. At the same time maintain the highest standards of ethics

and social responsibilities.

This mission is what drives Hero Honda to new heights in excellence and helps the

organization forge a unique and mutually beneficial relationship with all its stake holders.

HERO HONDA'S MANDATE

Hero Honda is a world leader because of its excellent manpower, proven

management, extensive dealer network, efficient supply chain and world-class products with

cutting edge technology from Honda Motor Company, Japan. The teamwork and

commitment are manifested in the highest level of customer satisfaction, and this goes a

long way towards reinforcing its leadership status.

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FROM THE CHAIRMAN'S DESK

LEADING WITH A DREAM

We had a dream. The dream of making motorcycles that would touch and transform

the lives of our customers by giving them a mode of transport that was fuel-efficient,

comfortable and environment friendly. One that would enhance their efficiency at work,

enable them to share moments of joy with their families and add up to a better quality of life.

In a scenario where the customer had a few choices, our vision was to offer the

highest quality at a reasonable price, to meet our customer’s expectations, and to exceed

them.

Behind the success of Hero Honda, is the saga of team-work. We would like to

acknowledge the role played by our JV partners, Honda Motor Company, Japan, and all our

business associates, shareholders and employees.

In the new millennium, we stand committed to innovation, to change, to achieving breakthroughs… to moving forward in the new century, while retaining the values that have Been like a beacon in this journey thus far.

BrijmohanLall

Chairman

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ABOUT THE CHAIRMAN

Brijmohan Lall Munjal – Seeding a Dream

Don't dream if you can't fulfill your dreams,'' Brijmohan Lall Munjal is often fond of

saying. The founder and patriarch of the $ 2.8 billion Hero Group is your classic first

generation entrepreneur. He is a man who started small, dreamt big and used a combination

of grit and perseverance to create one of the country's largest corporate groups and the

World's No.1 Two Wheeler Company.

Instinctive from a young age, Brijmohan Lall made a rather unusual start in life.

Around the time when the freedom movement in India was taking shape in the late 1920s, he

walked into a newly opened Gurukul (Indian heritage school) near his home in Kamalia

(now in Pakistan ). He was only six years old then.

Thus began an extraordinary tale of courage and perseverance. Brijmohan began his

business story after partition in 1947, when he and his brothers relocated to Ludhiana. The

family set up a company that provided poor people with basic transport (cycles). Three

decades later, as India evolved, he added a second crucial chapter - which visualized

affordable and technologically superior transport to millions of middle class Indians. The

rest is history.

Building Relationships

22

When Brijmohan and his brothers started out, there was no concept of organized

dealer networks. Companies just produced, and most dealers functioned like traders.

Brijmohan changed the rules of the business by trusting his gut instincts; introducing

business norms that were ahead of their time, and by investing in strategic relationships.

Brijmohan built a series of bonds and networks with hundreds of family members, vendors,

dealers and employees. Much like the Japanese keiretsu system, these networks are now the

glue that holds the Hero Group together.

"Thanks to the relationships that we have nurtured so passionately in the Hero

Family, the younger generations of some of our bicycle dealers have become dealers of Hero

Honda. These relationships have survived through generations - through bad times and good

times,'' the patriarch now reminiscences.

Besides bonding with his vendors and dealers, Brijmohan has been personally responsible for kindling a spirit of entrepreneurship amongst his employees, and today, 40 of His former employees are successful entrepreneurs.

Staying Ahead

Though not technically qualified in the conventional sense, few of his

contemporaries have understood the dynamics of technology better than Brijmohan Lall has.

He could always visualize the applicability of technology before others could. For example,

in the 1980s, when all two-wheeler companies in India opted for two-stroke engine

technology, Brijmohan preferred a four-stoke engine - a technology that dramatically

increased fuel efficiency and reduced maintenance costs. This technology was one of the

biggest reasons for Hero Honda's stupendous success.

Time and again, Brijmohan managed to steal a march over his industry peers. For

example, when Honda Motors of Japan was looking for a collaborator in the 1980s, the Hero

Group was not high up the pecking order initially as there were other more eligible and

established suitors.

Yet it didn't take long for the astute Japanese to realize that the Hero Group and Honda had

much more in common than earlier perceived; there a sharp focus on financial and raw

material management, and employee turnover was low. Honda officials were also amazed to

find that the Munjals were already practicing "Just-in-time-inventory" at the time (JIT). It

turned out that Brijmohan Lall's aspiration to provide cheap transportation to India 's poor by

23

default ensured lean and cost-effective operations. This in turn increased vendor

efficiency and led to near-zero inventories.

A Corporate Citizen

A frugal upbringing and a value system modeled on the famous Gurukul system -

which stresses the sanctity of the teacher-pupil relationship - imbibed in Brijmohan a strong

sense of social commitment and responsibility.

There is a special place in his heart for Ludhiana , the city where he took roots.

Today, Ludhiana is a modern, bustling city, but Brijmohan has played no mean role in its

evolution. Several schools and educational institutions in Ludhiana owe their existence to

the Munjal family.

The Ludhiana Stock Exchange owes its existence to Brijmohan's vision as does the

Ludhiana Flying Club. He's also set up the not-for-profit Dayanand Medical College and

Hospital-an institute now rated as one of the best medical colleges in India , in terms of

infrastructure, quality of staff and alumni profile.

In and around Dharuhera, near the first Hero Honda plant, Brijmohan and his family

have left their stamp of philanthropy. The Raman Kant Munjal Foundation - which

Brijmohan set up in memory of his eldest son, today runs a higher secondary school and a

very modern and well-equipped 100-bed hospital at Dharuhera. The group has also adopted

numerous villages and provides education, vocational training, drinking water, roads,

streetlights and sewerage.

PROMINENT AWARDS AND ACCOLADES TO THE CHAIRMAN

24

Year Awards & Recognitions

2010 Rated as Top Indian Company in Automobile - Two Wheelers sector by Dun & Bradstreet - Rolta Corporate Awards 2009  Most Preferred Brand of Two-Wheelers" award at the CNBC Awaaz Consumer Awards. Adjudged at top of the two-wheeler category in the Brand Equity Most Trusted Brands 2010 Survey Ranked No. 3 Most Trusted Brand across categories amongst Young Adult Males  Company of the Year awarded by Economic Times Awards for

Corporate Excellence 2008-09.

CNBC TV18 Overdrive Awards 2010 'Hall of Fame' to Splendor

NDTV Profit Car & Bike Awards 2010

Two-wheeler Manufacturer of the Year

.CnB Viewers' Choice Two-wheeler of the Year (Karizma ZMR)

Bike Maker of the Year by ET-ZigWheels Car & Bike of the Year

Awards 2009

2009 'Two-wheeler Manufacturer of the Year' by NDTV Profit Car & Bike

Awards 2009 and

Passion Pro adjudged as CNB Viewers' Choice two-wheeler

Top Indian Company under the 'Automobile - Two-wheelers' sector bythe Dun &

Bradstreet- Rolta Corporate Awards

Won Gold in the Reader's Digest Trusted Brand 2009 in the 'Motorcycles'

25

category

NDTV Profit Business Leadership Awards 2009 - two-wheeler category

2008 NDTV Profit Business Leadership Award 2008 - Hero Honda Wins the Coveted "NDTV Profit Business Leadership Award 2008" TopGear Design Awards 2008 - Hunk Bike of the Year Award. NDTV Profit Car India & Bike India Awards - NDTV “Viewers’ Choice Award” to Hunk in Bike Category. IndiaTimes Mindscape and Savile Row ( A Forbes Group Venture ) Loyalty Awards – “Customer and Brand Loyalty Award” in Automobile (two-wheeler) sector IndiaTimes Mindscape and Savile Row ( A Forbes Group Venture ) Loyalty Awards –

“Customer and Brand Loyalty Award” in Automobile (two-wheeler) sector Asian Retail Congress Award for Retail Excellence (Strategies and Solutions Of business innovation and transformation) - Best Customer Loyalty Program in Automobile category

NDTV Profit Car India & Bike India Awards - Bike Manufacturer of the year Overdrive Magazine - Bike Manufacturer of the year

TNS Voice of the Customer Awards:

No.1 executive motorcycle Splendor NXG No.1 standard motorcycle CD Deluxe No. premium motorcycle CBZ Xtreme

2007 The NDTV Profit Car India & Bike India Awards 2007 in the following category:

o Overall "Bike of the Year" - CBZ X-tremeo "Bike of the Year" - CBZ X-treme (up to 150 cc category)

"Bike Technology of the Year" - Glamout PGM FI

"Auto Tech of the Year" - Glamout PGM FI by Overdrive Magazine. 

"Bike of the Year" - CBZ X-treme by Overdrive Magazine. 

Ranked CBZ X-treme "Bike of the Year" - by B S Motoring Magazine 

26

“Most Trusted Company” , by TNS Voice of the Customer Awards 2006.

CD Deluxe rated as "No 1 standard motorcycle" by TNS Voice of the

Customer Awards 2006

2006 Adjudged 7th Top Indian Company by Wallstreet Journal Asia (Top

Indian Two Wheeler Company).

One of the 8 Indian companies to enter the Forbes top 200 list of

world’s Most reputed companies.

No. 1 in automobile industry by TNS Corporate Social Responsibility

Award.

Best in its class awards for each category by TNS Total Customer Satisfaction Awards 2006:

Splendor Plus (Executive) CD Deluxe (Entry) Pleasure (Gearless Scooters)

Splendor & Passion - Top two models in two wheeler category by ET

Brand Equity Survey 2006.

Adjudged 7th Top Indian Company by Wallstreet Journal Asia (Top

Indian Two Wheeler Company).

Top Indian company in the Automobile - Two Wheeler sector by Dun &

Bradstreet –

27

American Express Corporate Awards 2006.

Hero Honda Splendor rated as India's most preferred two-wheeler

brand at the Awaaz Consumer Awards 2006. 

Certificate of Export Excellence for outstanding export performance during

2003-04 for two-wheeler & three- wheelers - Complete (Non SSI) by

Engineering Export Promotion Council.

The NDTV Profit Car India & Bike India Awards 2006 in the following

Bike Maker of the Year Bike of the Year - Achiever Bike of the Year - Achiever (up to 150 cc category) Bike of the Year - Glamour (up to 125 cc category) NDTV Viewers' Choice Award to Glamour in the bike category

2005 Awaaz Consumer Awards 2005 - India's most preferred two-wheeler brand

by CNBC

in the 'Automobiles' category.

Bike Maker of the Year Award by Overdrive Magazine

ICWAI National Award for Excellence (Second) in Cost Management 2004

in the private sector category by ICWAI

10th Motilal Oswal Wealth Creator Award for as the most consistent

wealth creator for the period 1991-2005.

28

2004 Winner of the Review 200 - Asia's Leading Companies Award (3rd Rank

amongst the top 10 Indian companies).

GVC Level 1 (Highest Rating) by CRISIL for corporate Governance.

Adjudged as the Best Value Creator - Large Size Companies 2003-04 by

The Outlook Money.

Corporate Excellence Award 2004 by Indian Institute of Materials

Management.

Adjudged as the Organization with Innovative HR Practices by HT Power

Jobs for HR Excellence.

ICSI National Award for Excellence in Corporate Governance 2004 by

The Institute of Company Secretaries of India.

2003 Winner of the Review 200 - Asia 's Leading Companies Award (3rd Rank

amongst the top 10 Indian companies).

Most Respected Company in Automobile Sector by Business World.

2002 Bike Maker of the Year by Overdrive Magazine.

Winner of the Review 200 - Asia 's Leading Companies Award (4th Rank

amongst the top 10 Indian companies).

29

Company of the Year of ET Awards for Corporate Excellence.

Ranked 4th in 'Overall Best Managed Company' category, ranked 3rd in

'Best Financial Management' and 'Best Operational Efficiency' category,

Ranked 6th in 'Overall Best Investor Relations' category, by

Asiamoney.

Highest Wealth Creating Company of the Year Award by the Money.

2001 Bike Maker of the Year by Overdrive Magazine

Winner of the Review 200 - Asia 's Leading Companies Award (9th Rank

amongst the top 10 Indian Companies).

Winner of Three Leaves Award for showing Corporate Environment

Responsibility in the Automobile Sector by Centre for Science &

Environment

1999 National Productivity Award for the Best Productivity Award in the

category of Automobile & Tractor presented by Vice President of India.

1995 The Analyst Award 1995 presented to Hero Honda Motors Ltd. on being

30

ranked 9th amongst the most investor rewarding companies in India.

1995 National Award for outstanding contribution to the Development of Indian

Small Scale Industry (NSIC Award - Presented by President of India).

1991 Economic Times-Harvard Business School Award for Corporate

Performance to Hero Honda Motors Ltd

BOARD OF DIRECTORS 

No. Name of the Directors Designation

1 Mr. Brijmohan Lall Munjal Chairman & Whole-time Director

2 Mr. Pawan Munjal Managing Director

3 Mr. Sunil Kant Munjal Jt. Managing Director

4 Mr. Suman Kant Munja Whole-time Director

5 Mr. Takashi Nagai Non-executive Director

31

6 Mr. Toshiyuki Inumal Non-executive Director

7 Mr. Paul Edgerley Non-executive Director

8 Mr. Pradeep Dinodia Non-executive Director

9 Mr. (Retd.) V. P. Malik Non-executive & Independent

Director

10 Mr. Analjit Singh Non-executive & Independent

Director

11 Mr.Pritam Singh Non-executive & Independent

Director

12 Mr. M. Damodaran Non-executive & Independent

Director

13 Mr. Ravi Nath Non-executive & Independent

Director

14 Dr. Anand C. Burman Non-executive & Independent

Director

CHAPTER 4 CODE OF CONDUCT

FOR DIRECTORS AND SENIOR MANAGEMENT

1. INTRODUCTION

32

This Code of Conduct has been adopted by the Board of Directors of Hero Honda

Motors Limited for its members and the Senior executives one level below, the Directors,

including all functional heads (hereinafter referred to as "Specified employee").

There are certain clauses of the Code, which are meant for Directors only such as

attending meetings of the Board and Committee thereof. The Specified employees need to

ignore such clauses.

The principal duty of the Board of Directors, along with management, is to ensure that

the Company is well managed in the interests of its shareholders. The Board of Directors

plays the central role in the Company's governance. It is the Company's decision-making

authority on all matters except those reserved to shareholders or delegated to the

management. The Board of Directors is not expected to assume an active role in the day-to-

day management of the Company.

I. GUIDELINES FOR CONDUCT

Each director and Specified Employees seek to use due care in the performance of

his/her duties, be loyal to the Company, act in good faith and in a manner such Director and

Specified employee reasonably believes to be not opposed to the best interests of the

Company. A Director and Specified employee should seek to also:

Make reasonable efforts to attend Board and committee meetings;

Dedicate time and attention to the Company;

Comply with all applicable laws, regulations, confidentiality obligations and corporate

policies of the Company; and be independent in judgement and actions and to take all

reasonable steps to be satisfied as to the soundness of all decisions taken by the Board of

Directors

II. CORPORATE BUSINESS OPPORTUNITIES

In carrying out their duties and responsibilities, Directors and Specified employees

should avoid:

33

Appropriating corporate business opportunities for themselves that are

discovered through the use of Company property or information or their position as

Directors and Specified employees;

Using Company property or information, or their position as Director and Specified

employees, for personal gain; and competing with the Company.

A corporate business opportunity is an opportunity:

1. Which is in the Company's line of business or proposed expansion or diversification,

2. Which the Company is financially able to undertake and

3. Which may be of interest to the Company.

A Director and Specified employee, who learns of such a corporate business

opportunity and who wishes to avail of, it should disclose such opportunity to the

Company's Board of Directors. If the Board of Directors determines that the Company does

not have an actual or expected interest in such opportunity, then, and only then, may the

Director and Specified employee avail of it, provided that the Director and Specified

employee has not wrongfully utilized the Company's resources in order to acquire such

opportunity

VI.CONFLICTS OF INTEREST

34

Each Director and Specified employee should endeavor to avoid having his or her

private interests interfere with: i)   the interests of the Company or ii) his or her ability to

perform his or her duties and responsibilities    objectively and effectively.

They should avoid receiving, or permitting members of their immediate family to

receive, improper personal benefits from the Company, including loans from or

guarantees of obligations by the Company, except as may be provided in their

employment contract.

They should make a full disclosure to the entire Board of any transaction or relationship

that such a Director and Specified employee reasonably expects could give rise to an

actual conflict of interest with the Company and seek the Board's authorization to pursue

such transactions or relationships.

III. COMPANY PROPERTY

In carrying out their duties and responsibilities, Directors and Specified employees

should endeavor to ensure that management is causing the Company's assets, proprietary

information and resources to be used by the Company and its employees only for legitimate

business purposes of the Company.

35

IV. CONFIDENTIAL INFORMATION

Director and Specified employees should maintain the confidentiality of information

entrusted to them in carrying out their duties and responsibilities, except where disclosure is

approved by the Company or legally mandated or if such information is in the public

domain.

The Company's confidential and proprietary information shall not be inappropriately

disclosed or used for the personal gain or advantage of any Director and Specified

employees or anyone other than the Company. These obligations apply not only during a

Director's and Specified employee's term, but thereafter as well.

V. FAIR DEALING

In carrying out their duties and responsibilities, Director and Specified employees

should endeavor to deal fairly, and should promote fair dealing by the Company, its

employees and agents, with customers, suppliers and employees.

Director and Specified employees should not seek to take unfair advantage of the

Company through manipulation, concealment, abuse of privileged information,

misrepresentation of material facts or any other unfair dealing.

VI. COMPLIANCE WITH LAWS AND REGULATIONS

In carrying out their duties and responsibilities, Directors and Specified employees

should comply, and endeavor to ensure that the management is causing the Company to

comply, with applicable laws, rules and regulations. In addition, if any Director and

Specified employee becomes aware of any information that he or she believes constitutes

evidence of a material violation of any securities or other laws, rules or regulations

applicable to the Company or the operation of its business, by the Company, any employee

or another Director and Specified employee, then such Director and Specified employee

should bring such information to the attention of the Chairman of the Audit Committee.

36

VII. INSIDER TRADING

Director and Specified employees should observe all applicable laws and

regulations including the Company policies and Codes as applicable to them with respect to

the purchase and sale of the Company's securities.

It is the responsibility of each Director and Specified employee to become familiar

with and understand these laws, regulations, policies and codes and should seek further

explanations and advice concerning their interpretation, if required.

Any waiver of or amendments to the Company's policies or Codes may be made only

by the Company's Board of Directors and will be disclosed promptly as required by

applicable laws and regulations including the rules of any exchange on which the

Company's securities are listed or traded.

Director and Specified employees should direct questions regarding the application

or interpretation of these guidelines to the Company Secretary/Compliance Officer.

Vlll ENCOURAGING THE REPORTING OF ILLEGAL OR UNETHICAL

BEHAVIOUR

Director and Specified employees should endeavor to ensure that management is

causing the Company to promote ethical behavior and to encourage employees to report

evidence of illegal or unethical behaviour to appropriate Company personnel.

Director and Specified employees should endeavor to ensure that the Company will

not allow retaliation against any employee who makes a good faith report about a possible

violation of the Company's Code of Conduct.

37

XI. NON-COMPLIANCE

Suspected violations of this Code may be reported to the Chairman of the Board or

the Chairman of the Audit Committee. All reported violations should be appropriately

investigated.

A Director and Specified employees charged with a violation of this Code should not

participate in or vote on the matter in the meeting of a Committee or the Board concerning

his/her alleged violation, but may be present at a meeting of the Board or of a Committee

convened for that purpose.

Any waiver of this Director and Specified employees' Code must be approved by the

Board of Directors and publicly disclosed if required by any applicable law or regulation.

XII. EMPLOYEES

The Director and Specified employee should respect each and every employee of the

Company, treat each of them in a fair and equitable manner; respect their privacy and not to

share/disclose their personal information without their prior consent; maintain non-

discriminatory approach and refrain from harassing employees, making sexual

advancements, coercion, threat by virtue of his/her position with the Company.

XIII. CUSTOMERS

The Director and Specified employee should ensure to provide products and

services, which meet the desired quality and safety standards and redress the Customer's

grievance genuinely

XIV. SHAREHOLDERS

The Director and Specified employee should ensure to protect shareholders complete

records by avoiding false misleading or artificial entries in the Books of accounts. should

ensure to protect shareholders interest

38

KEY MILESTONES OF HERO HONDA

PROMINENT AWARDS TO THE CHAIRMAN

Year Awards and Accolades

2010 Business Leader by Lakshmipat Singhania - IIM, Lucknow National

Leadershi Awards 2009 

Pride of Nation Award by the Doon Citizens Council

2006 'Lifetime Achievement Award' for Translating Excellence in Corporate

Governance into Reality by The Institute of Company Secretaries of India

2005 Indian Automotive Hall of Pride by Overdrive CNBC TV18 Commendation of Business Leadership displaying extraordinary

Corporate Leadership and Entrepreneurial Spirit

Padma Bhushan by Government of India

Doctor of Letters (Honoris Causa) by Hemwati Nandan Bahuguna Garhwal

University, Srinagar Garhwal

Lifetime Achievement Award by ET Awards for Corporate Excellence

2004 Life Time Achievement Award for Management by All India Management

Association

D. Litt. (Honoris Causa) by Banaras Hindu University

Lifetime Achievement Award by Amity Business School

Lifetime Achievement Award by HT Power Jobs

2002 Entrepreneur of the Year Award by Business Standard Giants International Award to the Chairman in the field of Business &

Industry

Business Leadership Award by Madras Management Association

2001 Entrepreneur of the Year Award by Ernst & Young

39

2000 Sir Jehangir Ghandy Medal for Industrial Peace - by XLRI, Jamshedpur

1998 Business Leader of the Year by Business Baron

1997 Distinguished Entrepreneurship Award by PHD Chambers of Commerce

& Industry

1995 National Award for outstanding contribution to the Development of

Indian Small Scale Industry (NSIC Award - Presented by President of India

1994 Businessman of the Year by Business India Group of Publications

1992 Honorary Membership - Indian Institution of Industrial Engineering Award

40

CORPORATE SOCIAL RESPONSIBILITY (CSR)

Hero Honda Motors takes considerable pride in its stakeholder relationships,

especially ones developed at the grassroots. The Company believes it has managed to bring

an economically and socially backward region in Dharuhera, Haryana, into the national

economic mainstream.

An Integrated Rural Development Centre has been set up on 40 acres of land along

the Delhi-Jaipur Highway. The Centre-complete with wide approach roads, clean water, and

education facilities for both adults and children-now nurtures a vibrant, educated and healthy

community.

The Foundation has adopted various villages located within vicinity of the Hero

Honda factory at Dharuhera for integrated rural development. This includes:

Installation of deep bore hand pumps to provide clean drinking water.

Constructing metalled roads and connecting these villages to the National Highway

(NH -8).

Renovating primary school buildings and providing hygienic water and toilet

facilities.

Ensuring a proper drainage system at each of these villages to prevent water-logging.

Promoting non-conventional sources of energy by providing a 50 per cent subsidy on

biogas plants.

Other key projects taken up by the Foundation include

Raman Munjal Vidya Mandir

41

The Raman Munjal Vidya Mandir began with three classes (up to class II) and

55 students from nearby areas. It has now grown into a modern Senior Secondary, CBSE

affiliated co-educational school with over 1200 students and 61 teachers. The school has a

spacious playground, an ultra-modern laboratory, a well-equipped audio visual room, an

activity room, a well-stocked library and a computer centre.

Raman Munjal Memorial Hospital

Multi-specialty hospital equipped with the latest diagnostic and surgical technology.

The Raman Munjal Memorial Hospital provides healthcare to the rural population in and

around Dharuhera, and also caters to accident and trauma victims driving along the Delhi-

Jaipur highway.

Raman Munjal Sports Complex

The Raman Munjal Sports Complex has basketball courts, volleyball courts, and

hockey and football grounds are used by the local villagers. In the near future, sports

academies are planned for volley ball and basket ball, in collaboration with National Sports

Authority of India

Vocational Training Centre

In order to help local rural people, especially women, Hero Honda has set up a

Vocational Training Centre. So far 26 batches comprising of nearly 625 women have been

trained in tailoring, embroidery and knitting. The Company has helped women trained at this

center to set up a production unit to stitch uniforms for Hero Honda employees.

Interestingly, most of the women are now self-employed.

Adult Literacy Mission

This Scheme was launched on 21st September, 1999 , covering the nearby villages of

Malpura, Kapriwas and Sidhrawali. The project started with a modest enrollment of 36

adults. Hero Honda is now in the process of imparting Adult Literacy Capsules to another

42

100 adults by getting village heads and other prominent villagers to motivate illiterate

adults.

Marriages of underprivileged girls

Marriages are organized from time to time, particularly for girls from backward

classes, by the Foundation by providing financial help and other support to the families.

Rural Health Care

Besides setting up a modern hospital, the Foundation also regularly provides

doorstep health care services to the local community. Free health care and medical camps

are now a regular feature in the Hero Group's community outreach program.

KEY POLICIES

AN ENVIRONMENTALLY AND SOCIALLY, AWARE COMPANY

At Hero Honda, our goal is not only to sell you a bike, but also to help you every

step of the way in making your world a better place to live in. Besides its will to provide a

high-quality service to all of its customers, Hero Honda takes a stand as a socially

responsible enterprise respectful of its environment and respectful of the important issues.

Hero Honda has been strongly committed not only to environmental conservation

programmes but also expresses the increasingly inseparable balance between the economic

concerns and the environmental and social issues faced by a business. A business must not

grow at the expense of mankind and man's future but rather must serve mankind.

"We must do something for the community from whose land we generate our wealth."

A famous quote from our Worth Chairman Mr.Brijmohan Lall Munjal

43

Environment Policy

We at Hero Honda are committed to demonstrate excellence in our environmental

performance on a continual basis, as an intrinsic element of our corporate philosophy.

To achieve this we commit ourselves to:

Integrate environmental attributes and cleaner production in all our business

processes and practices with specific consideration to substitution of hazardous

chemicals, where viable and strengthen the greening of supply chain.

Continue product innovations to improve environmental compatibility.

Comply with all applicable environmental legislation and also controlling our

environmental discharges through the principles of "alara" (as low as reasonably

achievable).

Institutionalise resource conservation, in particular, in the areas of oil, water,

electrical energy, paints and chemicals.

Enhance environmental awareness of our employees and dealers / vendors, while

promoting their involvement in ensuring sound environmental management.

Quality Policy

Excellence in quality is the core value of Hero Honda's philosophy.

We are committed at all levels to achieve high quality in whatever we do, particularly in our

products and services which will meet and exceed customer's growing aspirations through:

Innovation in products, processes and services.

Continuous improvement in our total quality management systems.

44

Teamwork and responsibility.

Safety Policy

Hero Honda is committed to safety and health of its employees and other persons

who may be affected by its operations. We believe that the safe work practices lead to better

business performance, motivated workforce and higher productivity.

We shall create a safety culture in the organization by:

Integrating safety and health matters in all our activities.

Ensuring compliance with all applicable legislative requirements.

Empowering employees to ensure safety in their respective work places.

Promoting safety and health awareness amongst employees, suppliers and

contractors.

Continuous improvements in safety performance through precautions besides participation and trainin

SALES PERFORMANCE

FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-

09

Total

Sales

26,21,400 30,00,751 33,36,756 33,37,142 37,22,0

00

Export

s (incl

in

above)

64,015 92,666 97,341 90,571 81,193

1. Hero Honda Registers 33% Growth in June 09

2. Hero Honda Sells 37,22,000 in 08-09 3. Hero Honda Registers 23% Growth in June'064. Hero Honda Sells Over 2.50 Lakh Units in February 20065. Hero Honda Begins 2006 On A High Note

45

6. Hero Honda Motors Scales A New High In Cy ’05

7. Hero Honda Continues On The Growth Path

8. Retail Sales Escalate To An Unprecedented 4 Lakh + Units

In October’05

9. Hero Honda Registers 22.3 Per Cent Growth In September

’05

10.Hero Honda’s Sales Jump 28.5 Per Cent In August 2005

11.Hero Honda Registers 12 Per Cent Growth In Sales In July

2005

12.Hero Honda Registers 13% Growth In Sales In Q1 Of 2005-

06

13.Hero Honda Motorcycle Sales In May At 2,26,072

14.Hero Honda Starts The Financial Year With Over 20%

Growth

HERO HONDA REGISTERS 33% GROWTH IN JUNE '09

Records a growth of 21% Sales in Q1 Of 2008-09

New Delhi, Saturday, July 01, 2009: Hero Honda, the 'World No.1' two-

wheeler company, continues to strengthen its leadership in the Indian two-wheeler

industry, registering impressive growth in sales in the first quarter of the FY 2008 -

09.

For the quarter ending June 2009, the company achieved cumulative sales of

37,22,00 units, recording a growth of 31.29% compared to the same period last

year. During the corresponding period last Financial Year, the company had

recorded sales of 6,86,494 units in the first quarter ending June 2007.

In June 2009, the company sold 37,22,00 units registering an impressive

growth of 33.26% as against 2,26,073 units in June last year.

During the month, Hero Honda launched Glamour FI - India's first Fuel

Injection motorcycle. The new technology eliminates the need for a carburetor,

offers the most comfortable drive and the lowest emissions, in addition to a host of

other features, which is now available for the first time to Indian two-wheeler riders.

46

Hero Honda Sells Over 37 Lakh Units In February 2009

CUMULATIVE SALES JUMP 33.16 %

New Delhi, Wednesday, March 01, 2009: Hero Honda, the ‘World No. 1’ two-

wheeler company for the fifth year in a row, has continued to exhibit a leader’s

performance in the first couple of months in 2009.

During the month of February 2009, the company sold 2,50,695 units, as

compared to 2,23,546 motorcycles sold during February 2007. This translates into a

growth of 12.14 per cent in sales volume.

The cumulative sales of the company for the period April 2007 - February 2008 also

witnessed a notable jump of 37,38,632 units, from 23,89,807 to 27,28,439 units

during the corresponding period last year. This reflects a growth of 14.16 percent.

In January 2006, Hero Honda rolled out its first 100cc gearless scooter the

“Pleasure” across India. The company also launched 22 first ever women-exclusive

scooter showrooms “Just4her” across the country. “Just4her” is a unique concept

pioneered by Hero Honda Motors targeting the women customers.

In January 2006, Hero Honda was also conferred the honor of the “Bike

Maker of the Year” by NDTV Profit-Bike and Car for the year 2005. Additionally

its 150 cc offering Achiever received the coveted ‘Bike of the Year’ award.

47

Achiever and Glamour also received the best bike awards for their respective

categories. The most desirable amongst these awards, the ‘NDTV Viewers’ Choice’

award in the bike category was also awarded to Hero Honda Glamour, truly

exemplifying the customers’ enduring trust and faith in the company.

Hero Honda Begins 2009 On A High Note

CUMULATIVE SALES JUMP 14 %

New Delhi, Wednesday, February 01, 2009: Hero Honda, the ‘World No 1’ two-

wheeler company for the fifth consecutive year, has continued to exhibit a leader’s

performance in the first month of the New Year.

During the month of January 2006, the company sold 2,49,450 motorcycles,

as compared with 2,30,280 motorcycles sold during January 2005. This translates

into an increase of 8.3 % in sales volume.

The cumulative sales of the company for the period April 2005 - January 2006 has

also increased to 24,77,744 motorcycles, a notable jump from 21,66,261

motorcycles during the corresponding period last year. This reflects a growth of 14.3

%In the month of January, Hero Honda rolled out its first scooter, the 100cc

“Pleasure” and launched 22 women-exclusive scooter showrooms “Just4her” across

the country. The cities where “Just4her” showrooms were launched include

Lucknow, Delhi, Ahmedabad, Pune (two showrooms), Bangalore, Hyderabad,

Baroda, Madgaon, Chennai (two showrooms), Chandigarh, Ludhiana, Jaipur,

Nagpur, Jamshedpur, Bhubaneswar, Guwahati, Coimbatore, Cochin, Indore and

Raipur.

48

The month of January also saw Hero Honda being conferred the honour of

the “Bike Maker of the Year” by NDTV Profit-Bike and Car for the year 2005.

Additionally its 150 cc offering Achiever received the coveted ‘Bike of the Year’

award. Achiever and Glamour also received the best bike awards for their respective

categories. The most desirable amongst these awards, the ‘NDTV Viewers Choice’

award in the bike category was also awarded to Hero Honda Glamour, truly

exemplifying the customers’ enduring trust and faith in the company.

CLOSES THE YEAR WITH SALES OF OVER 33 LAC BIKES

New Delhi, Monday, January 02, 2009: Hero Honda, the ‘World No. 1’

two-wheeler company, set precedence in the industry by registering an unparalleled

growth throughout the calendar year (CY) 2008. In the year that logged an

impressive growth in the two-wheeler sector, Hero Honda continued to exceed

expectations by selling a staggering 37,22,000 motorcycles during the calendar

year 2008. This converts to a growth of 28.3 per cent over CY ’07 where the

company sold 25,28,699 bikes.

Mr. Pawan Munjal, Managing Director, Hero Honda Motors Ltd., thanked

customers for the company’s continuous brilliant performance. He said “This year

has been exciting for us where we crossed significant milestones. We fulfilled our

commitment to the customers by providing the latest and global standard products.

We launched several new products this calendar year. It is to the complete credit of

our customers who have shown continued faith in us and our products that we have

achieved the World No. 1 two-wheeler company year after year."

During CY ’09, the company continued its consistent growth in sales

49

performance. In December 2009, the company sold a total of 37,22,000

motorcycles as compared with 33,37,142 bikes during the same month last year

which means an increase of 6.2 per cent. With this, the cumulative tally for the

period April-December 2005 stands at 33,37,142 bikes, clocking a growth of 15.2

percent over the year 2004. The company sold 19,35,981 motorcycles during the

same period last year.

The calendar year 2008 also saw a slew of new launches in various segments

by the company. One of the biggest milestones was the launch of ‘Pleasure’- the

first scooter by Hero Honda. ‘Pleasure’ which is slated to hit the roads in January is

targeted primarily at women. Having established its leadership in the industry, Hero

Honda further consolidated its position by launching three new motorcycles - ‘Super

Splendour’, ‘Glamour’ and ‘Achiever’.

The year also witnessed one of the highest civilian honours, the Padma

Bibhushan being awarded to Mr. Brijmohan Lall, Chairman, Hero Honda Motors,

for his invaluable contribution to trade, industry and philanthropist activities. Mr.

Brijmohan Lall is a first generation entrepreneur who through sheer hard work and

perseverance has made his mark on the global business environment. During the

year Mr. Brijmohan Lall was also honoured with a Lifetime Achievement Award by

the Economic Times

Hero Honda Continues On The Growth Path CUMULATIVE SALES FOR THE

PERIOD APR-NOV ’05 GROWS BY OVER 14 PER CENT

New Delhi, Thursday, December 01, 2008: Hero Honda, the ‘World No. 1’ two-

wheeler company, is continuing to ride high on its steady sales performance month after

month.

During November 2008, the company recorded a sales volume of 30,00,00,0

motorcycles as compared with 37,22,000 motorcycles sold during the same month last

year. This translates into an increase of 6.5 per cent.

50

The cumulative sales of the company for the period April-November 2008 has

also jumped by 14.7 per cent, increasing from 17,05,230 motorcycles sold during April–

November 2007 to 19,56,416 motorcycles sold during the same period in 2008.

The month of November also witnessed the 5th Hero Honda Indian Television

Academy Awards, the first and only television awards in the country.

Retail Sales Escalate To An Unprecedented 4 Lakh + Units In

DESPATCH CROSSES THE 3-LAKH LANDMARK

New Delhi, Monday, October 31, 2008: Hero Honda, the ‘World No.1’ two

wheeler manufacturer, has set yet another precedent for the Indian two-wheeler industry by

recording incredible sales in October 2005. The company’s retail sales crossed the 4-lakh

milestone, for the first time ever in the Indian two-wheeler industry.

Additionally, dispatch during the month also reached an unprecedented high of

3,02,000 units, marking a remarkable jump of 23.02% as compared with the corresponding

month in 2004. The company had recorded dispatch of 2,45,475 units in October 2004.

Hero Honda’s achievement of the landmark 4 lakh plus retail sales and 3 lakh plus

dispatch, within a single month, is an extraordinary feat considering the growing

competition in the two-wheeler market and is certain to redefine industry standards.

The company’s sales performance during October 2005 is a testimony to the success

of its customer centric business philosophy. Month over month, the company has been

recording increasing sales, also signifying the success of its new models launched in the

current year.

The company’s sales (dispatch) during the month is up by 13.5%, as compared with

the previous month (September 2005), when the company had recorded sales of 2,66,071

units.

51

With the first festive month ending, Hero Honda’s cumulative sales (dispatch)

for the period April-October 2005 has also registered a significant growth of 17.87% over

the corresponding period in the previous year. The company’s cumulative sales tally has

thereby increased to 17,31,992 units, a jump from 14,69,394 units in 2004.

With the recent launch of Achiever in end-October and the forthcoming launch of

Pleasure in mid-November, the company is confident of continuing its upward movement on

the sales chart.

The company’s festive promotion, which offers Rs.1001/- off on each of its models,

has also met with huge success, across the country.

Hero Honda Registers 22.3 Per Cent Growth In September ’08

CLOSES HALF YEAR WITH IMPRESSIVE NUMBERS

New Delhi, Saturday, October 01, 2008: Hero Honda, the ‘World No.1’ two-

wheeler company, for the fourth consecutive year, continued its upswing during the month

of September 2008.

The September sales of Hero Honda mark an impressive growth of 22.3 per cent

over last year. The company sold 2,66,071 bikes in September 2005 as against 2,17,507

bikes in the corresponding month during the previous year. Sales during the month have also

jumped by 9.6 per cent over the previous month (August 2005), when the company sold

2,46,304 motorcycles.

The cumulative sales of the company for the period April - September 2005 have

also shown a growth of 16.84 per cent over the corresponding period last year. The

cumulative sales during the period have increased to 14,29,992 motorcycles from 12,23,919

motorcycles during April-September 2004.

Hero Honda's Sales Jump 28.5 Per Cent In August 2008

PHASED LAUNCH OF 'GLAMOUR' COMPLETED; OVER 45,000 UNITS SOLD

ALREADY New Delhi, Thursday, September 01, 2008: Hero Honda Motors Ltd., the

‘World No.1’ two-wheeler company for the fourth consecutive year, is continuing with its

robust performance month after month. The company’s emphasis on proactive

52

understanding and satisfaction of customer needs and desires along with new product

offerings has resulted in the company consolidating its leadership in the industry.

The company sold a total of 33,37,142 motorcycles during August 2008, thereby

registering an impressive growth of 28.5 per cent in sales over the corresponding month last

year. The company had sold a total of 1,91,635 motorcycles in August 2007.

At the end of August 2008, the cumulative sales of the company for the period April

- August 2007 stood at 11,63,921 motorcycles, translating into a growth of 15.6 per cent.

The company had sold 10,06,412 motorcycles during the corresponding period (April-

August 2004) last year.

Also during the month, Hero Honda completed the phased launch of ‘Glamour’- its

new offering in the 125 cc segment. The bike comes powered with the futuristic and

exemplary Quantum Core engine, which has been perfected after a series of refinements and

offers customers an unprecedented combination of top-class fuel-efficiency and high power.

The company has already sold over 45,000 units of Glamour since its first launch in South

India towards the end of June, demonstrating a tremendous response from customers.

Hero Honda Registers 12 Per Cent Growth In Sales In July 2008

CUMULATIVE SALES CROSS NINE LAKH BIKES IN FOUR MONTHS

New Delhi, Monday, August 01, 2008: Hero Honda Motors Ltd., the ‘World No.1’

two-wheeler company has come to epitomize consistent performance. The company has,

month on month, managed to stand up against all odds and maintained its leadership in the

increasingly competitive 2-wheeler segment.

During the month of July 2008, the company sold 2,30,050 bikes, as against

2,05,654 bikes in the corresponding period last year, thus registering a sales growth of 12

per cent.

For the period April - July 2008, the cumulative sale of the company stood at

9,17,617 units, translating into a growth of 12.6% per cent. The company had sold 8,14,777

units during the corresponding period last year.

53

The company was able to achieve this impressive growth in the face of

continuing supply constraints of components caused by the volatile labour situation

prevailing in parts of the state of Haryana, where both the manufacturing plants of the

company are located. The adverse situation impacted other industries in the region as well.

Thanks to the initiative taken by the Haryana government, the situation has improved and

production is expected to be back on track.

Market demand for Hero Honda products remains buoyant and the company

launched ‘Glamour’- a new entry by the company in the premium deluxe segment, in

Western India during this month. The bike was very successfully launched in South India in

the previous month and has been very well received by the customers in that region. With

this new product in its portfolio, the company is now looking at consolidating its

indisputable leadership in the market.

Hero Honda Registers 13% Growth In Sales In Q1 Of 2008-09

New Delhi, Friday, July 01, 2008: Hero Honda, the ‘World No.1’ two-wheeler company,

continues to strengthen its leadership in the Indian two-wheeler industry, registering

impressive growth in sales in the first quarter of 2008 – 09.

For the quarter ending June 2005, the company achieved cumulative sales of

6,86,494 units, recording a growth of 13 per cent. During the corresponding period last

Financial Year, the company had recorded sales of 6,09,123 units.

In June 2008, the company sold 33,37,142 bikes registering a growth of 12.5% as against

30,00,751units in June last year.

This impressive growth was achieved in the face of continuing supply constraints of

components caused by the volatile situation prevailing in parts of the state of Haryana,

where both the manufacturing plants of the company are located. The adverse situation has

impacted other industries in the region as well.

However, market demand for Hero Honda products remains buoyant and production

is expected to be back on track to meet this demand. With the steady progress of monsoon,

the outcome also remains positive.

54

Hero Honda Motorcycle Sales In May At 37,00,751

New Delhi, Wednesday, June 01, 2009: Hero Honda, the ‘World No. 1’ two-wheeler

company, sold 37,00,751units in May 2009.

The impressive figure was achieved despite some supply constraints. With the huge

demand for Hero Honda bikes in the market and supplies now back to normal, sales are set

to get a boost in June.

During the month of May, Hero Honda also announced auditions for Hero Honda

MTV Roadies- 3, a reality show that the company has been associated with for the last two

years. This year the Hero Honda MTV Roadies journey will begin on June 12th from

Jaisalmer to Leh with 13 bikers on Hero Honda Karizma, the only premium sports bike in

India. The show aims at testing the participants’ endurance and bringing out the real riders

in them.

RIDE SAFE THE HERO HONDA WAY

At hero Honda, our goal is not only to sell you a bike, but to also help you every step

of the way in making the right decisions. Assisting you in making the right judgments on the

road, and helping you choose the right helmet and other riding equipment that can not only

help save your skin but possibly your life!

And as bike handling requires know-how, skill and rigorous mental conditioning, we

have put together certain safety tips and suggestions that will enhance your riding comfort.

Click to view the videos.

 Pre - Ride Checks  Riding Gear

 Riding Posture   Riding On the Road

55

 Braking   Balancing

 Cornering

PRE RIDE INSPECTION

You should conduct pre - ride inspection before riding a two wheeler to enhance

safety and riding comfort.

Clean the two-wheeler body surface regularly to maintain the surface finish. Use

specifically designed cleaning products only.

Inspect your motorcycle before you start the engine. The items listed here will only

take few minutes, and in the long run they can save time, expense, and possibly your life.

Click to follow the tips as given below:

1. ENGINE OIL LEVEL

2. FUEL LEVEL

3. FRONT AND REAR BRAKES (DRUM TYPE)

4. TYRES

5. CLUTCH

56

6. DRIVE CHAIN

7. THROTTLE

8. LIGHTS AND HORN: Check if the headlight, tail /stop light, turn signals,

indicators and horn function properly.

9. REAR VIEW MIRROR: Ensure that the rear view mirror gives a good rear view

when you are sitting on the motorcycle.

10. AIR SUCTION VALVE: Make sure all tube connections are secured properly.

To meet emission standards, certain models of two wheelers are provided with the

air suction valve. Air suction valve supplies fresh air from air filter to the exhaust

manifold to convert carbon monoxide to carbon dioxide. This reduces the CO% in the

vehicle exhaust.

11. FITTING & FASTENERS: Check & tighten if necessary.

12. BATTERY

13. STEERING: Check for smooth action and maneuverability.

PUC CERTIFICATION

You should get your motorcycle inspected and certified from an authorised PUC

centre to ensure that the emission performance of the vehicle in within the desired limits.

For petrol engine two - wheelers the c urrent regulation requirement is as follows.

Idle CO (Carbon Monoxide) % = 3.50 % (max)

HC (Hydrocarbon) = 4500 ppm (max)

Vehicles which do not undergo a periodic maintenance are liable to emit exhaust

gases more than the permissible limit. Few important tips to maintain low emission

levels –

Clean spark plug and maintain specified gap between electrodes.

Keep the air filter clean.

Get the carburetor tuned at authorized Hero Honda workshop.

57

Do not overfill the engine oil and follow the replacement schedule.

Avoid use of adulterated fuel.

You should get the emission level certified once in every 3 months at any of the

authorised emission checking Centres.

IMPORTANT MAINTENANCE TIPS

HERO HONDA GENUINE ENGINE OIL - 4 T PLUS

Engine oil is a key determinant for efficient motorcycle performance and increased

engine life. Hero Honda 4-T Plus Genuine Engine Oil is a premium quality engine oil,

e ngineered to meet the lubrication requirements of Hero Honda Engines. Hero Honda

4-T Plus conforms to International specifications of API SJ SAE 20 W 40 / 10 W 30 and

meets the JASO specifications. We strongly recommend that you use Hero Honda 4-T

plus to maintain optimum engine performance during extreme driving conditions.

Hero Honda 4-T plus Genuine Engine Oil provides the following benefits compared

to API SF grade oil:

Enhanced engine oil life.

Excellent anti-wear properties to increase your motorcycle’s engine life.

58

Minimizes the blow by gases by sealing the clearances within engine and improves

the engine’s power.

Provides excellent protection against corrosion.

Has very high stability against oxidation & temperatures.

Facilitates easy cold starting.

Special additives in the engine oil provide better engine cleaning

Recommendation

For best results from your Hero Honda two-wheeler we recommend use of Hero

Honda 4T Plus Genuine Engine Oil as per the following schedule

How to check the engine oil level?

In order to check the level of the engine oil, the vehicle should be on main stand.

Check the engine oil level using the dipstick. The engine oil level should be maintained

between the upper and the lower level marks of the dipstick. In case it is needed, top up the

engine oil up to the upper level on the dipstick.

Replace the engine oil if it is due for replacement

59

60

BATTERY MAINTENANCE

Your motorcycle battery needs periodical maintenance to ensure a long and trouble

free life. Do the following checks at regular intervals for a reliable battery performance.

Check the electrolyte level against the top and bottom markings on the battery shell.

Always top up with distilled water whenever required.

Check for any leakage from battery. It should be clean and free from any leakages. In

case of non use of motorcycle, battery should be kept fully charged and electrolyte level

should be at Top mark.

TYRE PRESSURE

Proper tyre pressure provides maximum riding comfort and tyre life.

Check the tyre pressure of both the front and rear wheels. Ensure recommended air

pressures once a week. Also check for any cuts, embedded nails or any other sharp objects

in the tyre.

BE A HERO HONDA GOOD RIDER

As a socially responsible company we urge you to join us in making this world a safer,

healthier and more environment friendly place.

At Hero Honda we like to promote the three E’s.

Engineering – which is the right technology, specifically designed for Indian customer

requirements, and road conditions. It is exemplified in the 4-stroke Hero Honda engines that

give you amazing reliability and fuel-efficiency, year after year. We have always

manufactures 4-stroke engines, ever since inception in 1985.

Environment – which is about ensuring that the high technology 4-stroke Hero Honda motorcycles continue to meet the most stringent pollution control norms at every level – as They have since the very beginning.

61

Education – which is about promoting comfortable and safe driving, through a wide dealer

network and service centres; as well as in educating people on road safety, in association

with the traffic police and the transport department. Do remember that you and your family

are not only riders, but pedestrian as well.

It is as part of the Hero Honda family that ‘We Care’ to drive home the message of Road

Safety and a Healthy Environment.

Your Hero Honda, the environment and you. It is a three-way relationship that you

should nurture, to reap the benefits for years to come. A well tuned bike keeps the

environment healthy. Good riding practices will keep you healthy. Taking good care of your

bike will always keep your bike healthy.

Here are simple steps to a healthy bike, healthy environment, and a healthy you.

Health and Environment

Safety

Facts and Information

Social Responsibility

Achiever New Sign of Desire Deluxe Life

Next Generation

of Motorcycling

Pleasure  

 Campaigns:

62

  We got a Good thing Going!

A Lot less Stops One Litre Road It's the Honda

  Stretch That Litre. Save Petrol

Chartered Accountant Over-Time Best Seller

Economical Honours  

   Others:

Friends For Life Nawab of Najafgarh Designed to Excel

Awaaz Consumer Awards '06

REGISTERED & CORPORATE OFFICE

63

   HERO HONDA MOTORS LIMITED

   34, Community Centre, Basant Lok, Vasant Vihar,   New Delhi - 110057Tel:  26142451, 26144121    Fax: 26143321, 26143198

64

CHAPTER-5

DATA ANALYSIS AND INTERPRETATION

1. Name and Gender:

Exhibit 5.1 Respondents Gender

Gender No. Of Respondents Percentage

Male 92 92%

Female 8 8%

Total 100 100%

INTERPRETATION:

From the above table, we can infer that 92% of the respondents were males and only

8% of respondents were females. From the above findings, we can analyze that majority of

the respondents were males. The reason, for majority of respondents being males is that

most of the Hero Honda vehicles are suitable only for men.

Respondents Gender

Male Female Total

0

10

20

30

40

50

60

70

80

90

100

No. Of RespondentsPercentage

Graph – 1

65

2.Age:

RESPONDENTS AGE

AGE GROUP NO. OF

RESPONDENTS

PERCENTAGE

18-29 42 42%

30-49 33 33%

50-59 18 18%

Above 60 7 7%

TOTAL 100 100%

INTERPRETATION: From the above table, we can infer that 42% of the respondents belong to age

group of 18-29, 33% of the respondents belongs to age group of 30-49, 18% of the

respondents belong to age group of 50-59 and 7% of the respondents belong to age group of

above 60 years.

The reason for the majority of respondents belonging to the age group of 18-29 is;

the age group 18-29 is an appropriate age, where people have been using for their enjoyment

and easy mobilization.

RESPONDENTS AGE

Studen

t

Employe

d

Business

Others

TOTA

L0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

Graph No: 2

66

3. Education RESPONDENTS EDUCATION

QUALIFICATION NO. OF RESPONDENTS PERCENTAGE

Graduation 48 48%

Post graduation 31 31%

Under graduation 16 16%

Others 5 5%

TOTAL 100 100%

INTERPRETATION: From the above table, we can infer that 48% of respondents were graduates,

31% of respondents were postgraduates, 16% of respondents were under graduates and

others count up to 5%.

From the above table, we can analyses that majority of the respondents were post

graduates (31%) and only 16% of the respondents were under graduates.

The reason for majority of the respondents being graduates may be firstly, minimum

educational qualifications in India being graduation, many respondents were graduates.

Secondly, most of the respondents were employees.

RESPONDENTS EDUCATION

Stu

dent

Employe

d

Business

Others

TOTA

L0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

Graph No: 3

67

4. Occupation:

RESPONDENTS OCCUPATIONS

OCCUPATION NO. OF RESPONDENTS PERCENTAGE

Student 31 31%

Employed 49 49%

Business 13 13%

Others 7 7%

TOTAL 100 100%

INTERPRETATION:

From the above table, we can infer that 31% of respondents were students, 49% of

the respondents were employed, 13% of the respondents were business people and 7% of the

respondents include others.

From the above table, we can analyze that, majority of the respondents were

employees, and only 13% of the respondents were business people.

The reason for the majority of the respondents being employees is that it is easy to

transport.

RESPONDENTSOCCUPATIONS

Student Employed Business Others TOTAL0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

Graph No: 4

68

5. Annual Income (in Rs.)

Exhibit No 5.5 RESPONDENTS ANNUAL INCOME

INCOME NO. OF

RESPONDENTS

PERCENTAGE

Below 50,000 14 14%

50,000 - 1,00,000 47 47%

1,00,000 - 1,500,000 26 26%

Above 1,50,000 13 13%

TOTAL 100 100%

INTERPRETATION:

From the above table we can infer that 14% of the respondents income was

below 50,000 (per annum), 47% of respondents income was between 30,000- 1,00,000 (per

annum), 26% of respondents income was between 1,00,000 – 1,50,000 and above occupy a

large share in purchase of two-wheelers and only 13% of respondents income was below

50,000.

RESPONDENTS ANNUAL INCOME

CD DELUXE

SPLEN

DOR PLUS

PASSIO

N PLUS

KARIZMA 225

CBZX-TR

EME

0

5

10

15

20

25

30

PERCENTAGENO. OF RESPONDENTS

Graph No: 5

69

6. Please specify the model of your Hero Honda Two-Wheelers?RESPONDENTS MODEL

BRAND NAME NO. OF RESPONDENTS PERCENTAGE

CD DELUXE 28 28%

SPLENDOR

PLUS

12 12%

PASSION PLUS 13 13%

KARIZMA 225 11 11%

CBZX-TREME 8 8%

CD – Dawn 12 12%

ACHIEVER 150 12 12%

TOTAL 100 100%

INTERPRETATION:

When an enquiry was made as to which brand of two-wheeler was owned by the

respondent, it was revealed that maximum of 28% has Hero Honda Splendor, 13% have CD

100, and 12% of Passion, CD-Dawn and CBZ, 11% of respondents were using the CD

100ss. And 8% of respondents were using Ambition and only 4% of respondents were using

Street. In this maximum Splendor users were employees and students.

RESPONDENTS MODEL

CD DELUXE

SPLEN

DOR PLUS

PASSIO

N PLUS

KARIZMA 225

CBZX-TR

EME

CD – Daw

n

ACHIEVER

150TO

TAL

0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

Graph No: 6

70

7. Since how long are you using these particular two-wheelers?

Exhibit No. 5.7 RESPONDENTS DURATION HAVE USING TWO-WHEELERS

NO. OF YEARS NO. OF RESPONDENTS PERCENTAGE

< 1 Year 32 32%

1 –2 Years 36 36%

2– 5Years 19 19%

And Above 13 13%

TOTAL 100 100%

INTERPRETATION:

The response of the question “since how long they were using the particular two-

wheelers” shows that 36% of respondents were using since two years 32% of respondents

were using since one year, 19% of the customers were using since five years and the

remaining respondents (13%) were using them from five years.

Graph No: 7

< 1 Year 1 –2 Years

2– 5Years And Above

TOTAL0

20

40

60

80

100

120

NO. OF RESPONDENTSPERCENTAGE

71

8. How did you gain awareness about this bike?

Exhibit No. 5.8 RESPONDENTS AWARENESS ABOUT THIS BIKE

PREFERENCE NO. OF RESPONDENTS PERCENTAGE

Paper Advertisement 5 5%

TV Advertisement 25 25%

Bill board and display 5 5%

Friends and relatives 65 65%

TOTAL 100 100%

INTERPRETATION:

The above table shows that 5% of the customers have gained awareness about their bike

through paper advertisement, 25% through T.V advertisement, 5% through Billboards

displays and 65% of them gained awareness through friends and relatives.

RESPONDENTS AWARENESS ABOUT THIS BIKE

Graph -8

Excel-lent

Good Fair Poor TOTAL0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

72

9. Why did you prefer the particular Brand?

Exhibit No. 5.9 REASON FOR PREFERENCE

PREFERENCE NO. OF RESPONDENTS PERCENTAGE

Quality 24 24%

Price 10 10%

Brand Image 22 22%

Fuel efficiency 28 28%

Resale value 16 16%

TOTAL 100 100%

INTERPRETATION:

From the above table we can infer that 24% of the respondents gave preference to

quality, 20% of respondents gave preference to brand image and 20% of the respondents

gave preference to the service networks, 10%, of the respondents gave to fuel efficiency.

From the above findings, we can analyze that 40% of respondents were more

quality conscious and only 10% respondents gave preference to price and fuel efficiency.

The reasons are even though people are price conscious to some extent; the

consumers are more quality conscious than price conscious because they have enough

income to buy two-wheeler.

REASON FOR PREFERENCE

Excel-lent

Good Fair Poor TOTAL0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

Graph No: 9

73

10. What factors influenced you to purchase your Two-Wheeler? 10. FACTORS INFLUENCING PURCHASE

FACTORS NO. OF RESPONDENTS PERCENTAGE

Sales Executives 50 50%

Family Members 20 20%

Friends 20 20%

Relatives 10 10%

TOTAL 100 100%

INTERPRETATION:

From the above table we can infer that 50% of the Respondents were

influenced by sales executives, 20% of the respondents were influenced by their family

members, 20% of the respondents were influenced by their friends and only 10% of the

respondents were influenced by their relatives, while purchasing two wheelers.

From the above findings we can analyze that sales executives influenced 50% of

respondents, and relatives influenced only 10% of respondents.

The reason for majority of the respondents being, mostly influenced by sales

executives while purchasing was firstly, sales executives give more technical description

about the product and attract customers to purchase two wheelers by using their effective

communication skills.

The reason why only 10% of respondents were influenced by relatives is that they

may not possess more knowledge about the products like two wheelers.

FACTORSINFLUENCINGPURCHASE

Excellent Good Fair Poor TOTAL0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

Graph No: 10

74

11. Are you satisfied with your vehicle?

RESPONDENTS OPINION ON SATISFACTION

OPINION NO. OF RESPONDENTS PERCENTAGE

Yes 95 95%

No 5 5%

TOTAL 100 100%

INTERPRETATION:

The response to the question “Are you satisfied with the vehicle” reveals that as high

as 95% of them were satisfied and 22% of them dissatisfied.

The people were asked as to why they were dissatisfied with their Hero Honda two-

wheeler. They responded that in splendor there is a problem with weak battery, and cbz’s

look is very good but the mileage is very low, each and every model is having some problem

and some servicing centers also disappointed them. But 95% of the respondents are very

much satisfied with their two-wheeler

RESPONDENTS OPINION ON SATISFACTION

Excellent Good Fair0

10

20

30

40

50

60

70

80

90

100

PERCENTAGENO. OF RESPONDENTS

Graph No: 11

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12. What is your opinion on the “Service provided by the Dealers”?

RESPONDENTS OPINION ON SERVICE

RATING NO. OF RESPONDENTS PERCENTAGE

Excellent 40 40%

Good 46 46%

Average 12 12%

Poor 2 2%

TOTAL 100 100%

INTERPRETATION:

The respondents replied about the service offered by Hero Honda Motors Ltd. The

maximum number of customers of Hero Honda Motors Ltd was very much satisfied. 40%

of respondents are rated as excellent, 46% of respondents rated as good, 12% of respondents

rated as average and only 2% of respondents rated as poor.

This shows that Hero Honda Motors Ltd Ltd takes more care about the customers

during their servicing time

RESPONDENTS OPINION ON SERVICE

Excel-lent

Good Fair Poor TOTAL0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

Graph 12

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13. How would you rate the cleanliness and appearance of the workshop?

CLEANLINESS AND APPEARANCE HAVE THE WORKSHOP

RATING NO. OF RESPONDENTS PERCENTAGE

Excellent 2 2%

Good 87 87%

Fair 8 8%

Poor 3 3%

TOTAL 100 100%

INTERPRETATION

From the above table we can infer that 2% of the respondents rate the cleanliness and

appearance of the workshop as Excellent, 87% of the respondents rate it as Good, 8% of

them rate it as fair and the remaining 3% rate it as poor.

This shows that a majority of the customers were happy with the cleanliness and

appearance of the workshop

APPEARANCE HAVE THE WORKSHOP

Graph No: 13

Excellent Good Fair Poor TOTAL0

20

40

60

80

100

120

PERCENTAGENO. OF RESPONDENTS

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14. What is your opinion on the after sales service and replacement of spare parts

offered by Hero Honda Motors Ltd?

Exhibit No. 5.14 REPLACEMENT OF SPARE PARTS

RATING NO. OF RESPONDENTS PERCENTAGE

With intimation 87 87%

Without intimation 13 13%

Total 100 100%

INTERPRETATION

The table reveals that 87% of the customers were satisfied with the after sales service

and replacement of spare parts offered by Hero Honda Motors Ltd the remaining were

dissatisfied.

From this we can infer that most of the customers were satisfied with the services

offered by the dealers.

Formal Friendly Informal0

10

20

30

40

50

60

70

80

NO. OF RESPONDENTSPERCENTAGE

REPLACEMENT OF SPARE PARTS

GRAPH14

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15. How do you rate the attitude of the frontline staff?

ATTITUDE HAVE THE FRONT LINE STAFF

RATING NO. OF RESPONDENTS PERCENTAGE

Formal 29 29%

Friendly 70 70%

Informal 1 1%

Total 100 100%

INTERPRETATION:

When questioned about the attitude of the frontline staff, 29% of the

respondents rated it as formal, 70% of the respondents rated it as friendly, and the remaining

1% rated it as informal

ATTITUDE HAVE THE FRONT LINE STAFF

Formal Friendly Informal

0

10

20

30

40

50

60

70

80

NO. OF RESPONDENTSPERCENTAGE

GRAPH 15

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CHAPTER-6

SUMMARY

A study of customer satisfaction at Hero Honda Motors Ltd was done with the

sample size of 100 respondents. The data is mainly divided into two types i.e. primary data

& secondary data. Primary data was collected through Questionnaire & Personal interview;

secondary data was collected from Journals, magazines, dailies, websites & industrial

survey.

To ascertain the customer preference towards Hero Honda two-wheelers in Hero

Honda Motors Ltd, a detailed study of customer satisfaction, attitudes and level of

satisfaction and their complaints & suggestions, was under taken the study also includes

assessing the future prospects of two-wheeler industry.

India is the second largest manufacturer & producer of two-wheelers in the world.

The two-wheeler industry made a small beginning in the early 50’s when Automobile

products of India (API) started manufacturing scooters in the country.

The industry has a smooth ride in 50’s, 60’s, 70’s when government prohibited new

entries and strictly controlled capacity expansion. The industry saw a sudden growth in the

80’s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mm

vehicles in 1990. In the 90’s the trend was reversed. There is a decline of 15% in 1991 and

8% in 1992, resulting in a production loss of 0.4mm vehicles. Barring Hero Honda, all

showed major producers suffered from recession in FY93 and FY 94 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 company either reporting

losses or a fall in profits. The two-wheeler population has almost doubled in 1996 from a

base of 12.6mm in 1990.

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The Indian two-wheeler industry can be broadly classified as scooters, motorcycles and

mopeds. The Indian motorcycle industry can be broadly categorized in to Indian

motorcycles and Indo-Japanese motorcycles. Hero group, Bajaj and Escorts dominate the

indo-Japanese motorcycle segment in collaboration with Japanese vehicle manufacturers

Honda, Kawasaki and Yamaha respectively. The Indian motorcycles segment is dominated

by Hero Honda two-wheelers.

The Hero Honda was established on the 13th of April 1984. The Hero group of

companies in India merged with the Honda Motors Company of Japan in creating a no. 1

mantle in the making of the company Hero Honda.

Hero Honda begins operations with the establishment of the dharuhera plant in 1985.

This is fully automated plant is equipped with state-of-the-art machinery, an in-house R & D

set up, and today it produces a bike every 30 seconds. To meet the growing demand, Hero

Honda opened another unit at gurgaon, using FMS technology. It is rated as one of the most

modern motorcycle manufacturing plants in the world. The plant produces 1,800 bikes

every day.

The essence of the marketing concept is that organizations must adopt customer-

oriented features and focuses their attention on building programs, offerings and strategies

that satisfy customer needs and wants. Many organizations maintain their focus on

operations or product or sales efforts and there by get dislocated by mistaking the means for

the end.

Customer satisfaction plays an important role in marketing. It depends upon t he

products performance relative to a buyers expectation customer might experience various

degree of satisfaction. If the products performance falls short of expectations the customer

is dissatisfied and if matches the customer is satisfied. Customer value and satisfaction are

important ingredients in the marketer’s formula for success.

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FINDINGS OF THE STUDY

The study reveals that majority of the customers age was between 18 years to 29 years.

The target customers were mainly in middle class as well as upper middle class income

group.

Most of the customers of Hero Honda Two-Wheelers were students and employees.

Most of the customers were employees followed by students.

Splendor, Passion, CD Dawn, CD 100ss, CBZ, and Karizma are the brands mostly

preferred by Hero Honda Motors Ltd.

The Hero Honda Two-Wheelers are mainly preferred because of the look & style fuel

efficiency and brand image.

Majority of the customers were self-influenced to purchase Hero Honda Two-Wheelers.

The main reason to choose Hero Honda Motors Ltd to buy their two-wheeler was due to

their excellence service.

Most of the customers of Hero Honda Motors Ltd were satisfied with their two-wheeler.

Some people were not satisfied because spare parts costs are very high and price of

vehicle is also very high.

Majority of customers rated good for service offered by the Hero Honda Motors Ltd.

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SUGGESTIONS

It is very hard to hold the pulse of a customer in the market. Customer’s satisfaction is different for different people at different situations; the following were some of the suggestions given to the Hero Honda Motors Ltd to improve the sales of Hero Honda Two –Wheelers.

The cost of accessories & spare parts of Hero Honda Two-wheelers should be reduced.

As a promotional measure, Hero Honda Motors Ltd may go for free service camps. This

will increase the customer’s loyalty.

Cost of the Two-Wheelers is little bit high as compared to others.

The sales have to be motivated by providing better incentives.

Direct contact with potential customer and explaining the strengths and advantages by

using their products will help in increasing the sales of the company.

As the location of the show room is ideally located with middle class population, Hero

Honda Motors Ltd should try to give more advertisements in news paper, bill boards in

that area to enable easy recall of the people for Hero Honda Motors Ltd.

It should conduct road shows in colleges.

Hero Honda Motors Ltd. should constantly keep in touch with its customers and inform

them about the latest models/ finance schemes.

It should employ Marketing Executives to go and tap the Industrial belt employees rather

than wait for customers to come to Hero Honda; Hero Honda should go to prospective

customers with the help of integrated market efforts.

Hero Honda Motors Ltd. should track the movement of spare-parts and stock spare parts

in advance otherwise the fake parts would become popular.

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BIBILOGRAPHY

PRINCIPLES OF MARKETING MANAGEMENT

Philip Kotler

MARKETING MANAGEMENTJ.C. Gandhi

CONSUMER BEHAVIOURLeon G. Schiffman

MARKETING MANAGEMENTRama Swamy & Nama Kumari

COMPANY JOURNALS & BROCHURES

WEB SITES:

www.herohonda.com

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QUESTIONNAIRE FOR STUDYING CUSTOMER SATISFACITON WITH REFERENCE TO HERO HONDA MOTORS

1. Gender:

a. Male ( ) b. Female ( )

2. Please mention your age:

a) 18-29 b) 30-49

c) 50-59 d) and above 60.

3. Education:

a) Under Graduation b) Graduation

c) Post Graduation d) Others

4. Occupation:

a) Salaried b) Business

c) Professional d) other specify

5. Your annual income (In Rupees):

a) Less than 50,000 b) 50,000-1, 00,000

c) 1,00,000-1,50,000 d) 1,50,000 and above

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6. Please specify the model of your Hero Honda Two-Wheelers?

a) CD DELUXE b) SPLENDOR PLUS c)CBZX-TREME

d) KARIZMA 225 e) PASSION PLUS f) CD-Dawn

g) ACHIEVER 150

7. Since how long are you using this particular Two-Wheeler?

a) Less than 1 year b) 1- 2 years c) 2-5 years d) And above

8. How did you gain awareness about this particular bike?

a) Paper Advertisement b) TV Advertisement c) Billboard & displays

d) Friends & relatives

9. Why did you prefer the particular brand?

a) Quality b) Price c) Brand Image

d) Resale Value

10. What factors influenced you to purchase your Two-Wheeler?

a) Sales Executives b) Family Members

c) Dealers d) Any other

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11. Are you satisfied with your vehicle?

a) Yes b) No

i) If No, mention reasons

12. What is your opinion on the “Services provided by the Dealers”?

a) Excellent b) Good c) Average

d) Poor

13. How would you rate future of the Two-Wheeler Industry?

a) Excellent b) Good c) Average d) Poor

14. What is your opinion on the after sales service and replacement of spare

parts offered by Hero Honda Motors Ltd. ?

a) With intimation b) Without intimation

15. How do you rate the attitude of the frontline staff?

a) Formal b) Friendly c) Informal

16. What are the suggestions you would offer to improve sales of Hero

Honda motorcycles?

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