Motorcycle Inustry Essay Example for Free

Motorcycle Inustry Essay Hero Honda launched CBZ 156cc motorcycle . Bajaj launched Kawasaki, Boxer AT CT . Royal enfield launched machismo A350 and lightning 535 . Kinetic engineering ltd launched Brat and kinetic challenger . 2000: There was a entry of new companies like TVS , Yamaha , (Lohia Motors) . Hero Honda launched Joy, Passion , and a remodeled Street. Bajaj launched KB Eliminator , KB Caliber Chroma , KB Aspire and KB Acer . LML came up with Adreno and Energy . Escorts Yamaha launched Crux and TVS Group launched Fiero . 2001: Bajaj launched the Pulsar range . TVS launched Victor 110cc . Yamaha upgraded the Crux version with Crux R. Kinetic engineering launched the GF125 and GF150. Background note:- Indian two wheeler market is divided into three major segments :- India is the 2nd largest user and 3rd largest manufacturer of two wheelers in the world. Bajaj Auto laid the foundation of the Indian two wheelers industry in 1948 by trading in imported Vespa scooters. Change in the Trend: Scooters dominated the Indian market till 1990. Thus till 1990 Bajaj was the undisputed leader in scooter market followed by LML Kinetic . After the Liberalisation , privatization and globalization , many companies entered into joint ventures and technical collaborations with foreign companies lke Honda , Suzuki , Yamaha etc. Due to introduction of 100-cc motorcycles an intersegment shift began to start which resulted in the decline in the sales of the motorcycles. Due to delayed launch of new and advanced scooter models , four stroke scooters prone to skidding risk and vibrations etc the demand for motorcycled went up. This demand was mainly driven by rural and semi-urban comsumers. In 2000 , the motorcycle market was characterized by the presence of sub segments based on price :- The Motorcycle Story:- In 1980’s factors namely high running and maintenance cost , perception that motorcycle is more suitable for rural roads , high price of motorcycle in comparison with mopeds or scooters and the availability of fairly new models of scooter led to a sharp decline in the growth of motorcycle segment. De-licensing in the motorcycle industry in mid-1980’s came to their rescue , and hence there was a healthy growth in the sales figure. In 1990 , motorcycle industry witnessed recession because of rising fuel prices , high input cost and reduced purchasing power due to significant rise in general price level and liquidity crisis in comsumer financing. In 1992 companies suffered big time . Entry of new players in the motorcycle market led to losses or fall in profits. In 1993, launch of 100-cc motorcycles led to a inter-segment shift began to take place and motorcycles sales began to grow as a result of flag in the recession. In 1999 , there was a big shift from demand of scooters to the demand of Motorcycles. This shift was mainly attributed tpo the change in customer’s preference towards fuel-efficient and appealing models, delay in launch of new scooters etc. PESTLE ANALYSIS :- Pestle analysis is a tool that can aid the organization in making strategies which will help them understand the external environment in which they operate now and will operate in the future. PESTLE FLOWCHART PESTLE Political/Legal:- 1. Restrictive policy of the govt. towards the car industry in the pre liberalization era . This indirectly helped the motorcycle industry to develop . 2. Delicensing of the automobile sector in mid 1980’s . This led to the entry of foreign players in the automobile industry 3. Break up of the joint venture between -Escorts Yamaha -TVS Suzuki -Hero Motors Honda Motors Due to these break ups Indian Companies were forced to invest in R D for manufacturing indigenously develop models Economical:- 1. High running and maintenance cost . High price of motorcycles in comparison with scooters or mopeds. Due to this companies had to reduce either the quality or had to increase the price of the motorcycles and this resulted in fall in the sales 2. Rise in fuel price high input , reduced purchasing power. This led to increase in the price level and gradually recession. Sociocultural:- 1. Rise in demand for personal transport. This created a demand for two wheelers in the industry 2. Inefficiency of public transportation system made people dissatisfied with it and they demanded some vehicle that could be economical and cater to their needs. 3. Perception that motorcycle were more suitable for the rural roads Availability of fairly new models of scooters. This led to sharp decline in growth of motorcycles . Technological:- 1. Due to Launch of 100-cc motorcycles there was a Intersegment shift and growth of sales figures of motorcycles. 2. Factors like delayed launch of advance scooter models fear of four stroke scooters being prone to increased skidding risks and vibration contributed in the decline in the demand of scooters.