INDUSTRY PROFILE

History of Bikes in India:

Mobility, especially in terms of transportation defines success of a nation or a community.
Before the British laid foundations for railway tracks in India to infuse mass transportation in the
country, affluent people had the luxury of being driven around in cars and the lower and
upwardly mobile populus were dependent on carts pulled by bullocks and horse carriages until
the introduction of pedal bicycles.

The evolution of pedal powered cycle into a motor powered two wheeler helped people move
faster and further. People could move out of rural India and move towards the big cities hoping
to find new jobs and starting new businesses in a new, emerging India.

The first motorbike in India:

The first bike commissioned in India was the 350 cc powered Bullet manufactured in England
and assembled in Madras (now Chennai) by the Royal Enfield UK company. Back then Royal
Enfield was a British company. The rugged Bullet was ordered by the Indian Army.

The tough build quality and broad wheel base helped the Jawans ride through tough terrains in
the north and eastern parts of India with relative ease.
The government of Independent India laid tough restrictions on the import motorcycle industry
by encouraging manufacturing and assembly in india.
There are four major aspects which lead to the success of the two-wheelers in
India
• Top quality, international standard manufacturing technologies

• Upwardly mobile, high earning youth

• Easy access to two wheeler loans

• Reduction in taxes and duties

Where to from here?

From launching Bike ambulances to two wheeler taxis, a developing India is going through a
green patch in terms of new age business ideas created by Indians for the very Indian problems
being faced on a day-to-day basis.
Indian manufacturers have dabbled with making motorcycles which run on all mass market fuels
available, such as diesel, petrol, CNG and now with advances in battery technology, there are a
few brands (local) who are about to pioneer electric mobility for the masses.

Two wheelers have become one among Indian families

Indians love for the freedom and mobility the two wheeler offers has woven an emotional bond
between the machines and Indian families themselves. We always depend on those fabulous two
wheels to take us from home to office or on cool rides to the countryside during weekends and
long holidays. No wonder there are thousands of biker clubs which span the length and breadth
of the country.

Two wheelers represent tremendous value for money, mainly due to its low cost (when
compared to cars), significantly higher mileage, easy repayment options, and high standard of
engine technology improves longevity of the machines. However, timely care and servicing is a
must to get the best out of them.

Two wheeler Indian manufacturer:

• TVS Motor Company
• Honda Motorcycle and Scooter India (Pvt.) Ltd

• LML (India) Limited

• Hero Honda Motors India Limited

• Royal Enfield Motors India Ltd

• Yamaha Motors India Pvt. Ltd

• Mopeds in India

• Motorcycles in India

• Scooters in India

• Bajaj Auto Ltd

• Kinetic Motor Co. Ltd

• Monto Motors

• Suzuki Motor Corporation

• Hero Moto corp Motors Ltd

Two-Wheeler Market in India

Indian Two-Wheeler Market is noticing a continuous upsurge in demand and thus resulting in
growing production and sales volume. This owes a lot to the launching of new attractive models
at affordable prices, design innovations made from youths’ perspective and latest technology
utilised in manufacturing of vehicles. The sale of two-wheeler products has increased
substantially. The sales volumes in the two-wheeler sector shot up from 15 percent to 24 percent
between 2008-09 and 2013-14.
BIKE COMPANIES IN INDIA:
Hero MotoCorp:
Hero MotoCorp is one of the best and market leaders in India’s two wheeler segment. Hero
MotoCorp is formerly known has Hero Honda, it was collaboration between Honda motors Japan
and Hero cycles India. Recently Honda decided to move out from collaboration to showcase its
own products in market and Hero Honda rebranded as Hero MotoCorp. Hero MotoCorp is one of
the worlds largest and India’s Number one two wheeler manufacturing company.

Honda Motorcycle and Scooter India (HMSI):

Hero Moto Corp Honda started to sell its own vehicles with Honda brand name once the end of
partnership between Honda motors Japan and Hero cycles India. Honda lunched Honda Activa
which is a gearless scooter in India and it has redefined the scooter market in India. Honda
Activa is one of the best selling gearless scooters in India. After success of Honda active, it has
launched Honda Aviator, Honda Dio, Honda Activa I and Honda Activa 125 to Indian Market.
Honda’s Unicorn one of the bestselling bikes of India. Other available Honda bikes are Honda
CB Shine, Honda CB Trigger, Honda CB Twister, Honda CBF Stunner, Honda Dream Neo and
Honda Dream Yuga.
TVS Motors:
TVS motor is another Indian company which manufactures two wheelers apart from its other
business. TVS started two wheeler businesses with collaboration of Japan Suzuki. After many
years it has started to sell its own TVS brands. TVS Apache is one of the best selling bikes of
TVS motors. Other available bikes are TVS Apache RTR 180, TVS Flame, TVS Jive, TVS
Phoenix, TVS Star and TVS Wego gearless scoter with body balancing technology.

Bajaj Auto:
Bajaj is India’s largest two wheeler and world’s largest three wheeler manufacturing company.
Bajaj Pulsar is one of the best selling sports bike in India. Other bikes of Bajaj’s are Bajaj
Avenger, Bajaj Discover, Bajaj Platina, Bajaj Discover 150, Bajaj Discover 125, Bajaj Discover
125 ST and Bajaj Pulsar 200NS.
Suzuki Motorcycle India Limited:
Suzuki Motorcycle India is a subsidiary company of Japan’s Suzuki Motor Corporation. Suzuki
GS150R, Suzuki Access gearless scoter , Suzuki Hayate, Suzuki Slingshot, Suzuki Swish are
available bikes of Suzuki Motorcycle India.
Yamaha Motor Pvt. Ltd:
Yamaha Motor Pvt. Ltd is subsidiary company of Yamaha Motor Company. Available bikes
from Yamaha are Yamaha FZ, Yamaha Fazer, Yamaha Crux, Yamaha Ray Z and Yamaha Ray
125 gearless scoter.

Facts of two wheeler industry in India:

 According to industry body, the Society of Indian Automobile Manufacturers, the Indian
two-wheeler industry is expected to post an annual growth of 11-12 per cent, and the
market is expected to double every four years till 2020. According to data from Nomura
and Crisil, as many as 10 million two-wheelers were sold in India 2011-12. Vehicles in
the executive segment formed the bulk of sales at 6.5 million, followed by the economy
segment (1.8 million) and premium segment (1.7 million).

 The recent series of hikes in the price of petrol have played a significant role in the sale
of two-wheelers, according to SIAM, as most first-time four-wheeler buyers in rural
India and tier II and tier III cities have deferred their purchases. Two-wheelers account
for a whopping 76 per cent of market share in the automobile sector in Asia’s third-
largest economy. Passenger vehicles account for 16.25 percent.

 Honda made its ambitions clear by launching the 110cc Dream Yuga, its first low-cost
motorcycle meant to target the budget market ruled by Hero and Bajaj. The Dream Yuga
comes at an attractive Rs. 44,642, and will compete with Hero’s Splendor, which costs
Rs.42,950. The Splendor is India’s top-selling bike.

 Other two-wheeler companies such as Yamaha and Suzuki, too, are steadily focusing on
the mass-market segment in an attempt to dislodge the two giants—Hero and Bajaj.
Yamaha last month announced a new $280 million factory in India to nearly triple its
capacity to 2.8 million motorcycles by 2018, while Suzuki Motor, which is expected to
 launch a mass-market offering soon, is building a new factory to take its India capacity
to close to one million motorcycles by 2014.

 Hero has a market share of around 56 per cent in the overall domestic two-wheeler
market. At 25.5 per cent, Bajaj comes a distant second, but maintains a healthy lead over
Honda and TVS, which have 7.5 per cent and 6.2 per cent market share, respectively. In
terms of volume growth over the previous fiscal year, Hero leads with 16.5 per cent,
followed by Honda (13.6 per cent), Bajaj (7.4 per cent) and TVS Motors (minus 0.3 per
cent). Top brands from each stable are as follows: Hero – Passion, Splendor and Pleasure
(scooter); Bajaj – Pulsar and Discover; Honda – Unicorn, Twister and Activa (scooter);
TVS – Flame, Apache and Scooty (scooter).

 In April 2015, 173,087 Honda Activa were sold in April 2015 while total of 344,752
scooters were sold in the same month. This shows that out of every 2 scooters that hit the
road in India, 1 of them is an Honda Activa.

 Contrary to huge growth rate seen in the scooter segment in the last few quarters in the
long-term scooter sales grew only 4.5 times since 1995 compared to 17.3 times surge in
motorcycles sales in India.

 A generation shift is sometimes best described by numbers and that stands true even
here. From a time when scooters were the need of the hour, we soon took liking to
motorcycles. WHile scooters grew only 4.5 times in 2 decades since 1995, motorcycles
raced away and grew by over 17 times.
 COMPANY PROFILE

HISTORY:

HERO MOTOCORP:

Hero Moto Corp Ltd., formerly Hero Honda, is an Indian motorcycle and scooter manufacturer
based in New Delhi, India. The company is the largest two-wheeler manufacturer in the
world, and also in India, where it has a market share of about 46% in the two-wheeler
category. The 2006 Forbes list of the 200 World's Most Respected Companies has Hero Honda
Motors ranked at #108. On 31 March 2013, the market capitalization of the company was 30,800
crore (US$4.5 billion).

Hero Honda started its operations in 1984 as a joint venture between Hero Cycles (sometimes
called Hero Group, not to be confused with the Hero Group food company of Switzerland) of
India and Honda of Japan. In 2010, when Honda decided to move out of the joint venture, Hero
GroupboughtthesharesheldbyHonda.
In June 2012, Hero Moto Corp approved a proposal to merge the investment arm of its parent
Hero Investment Pvt. Ltd. with the automaker. This decision came 18 months after its split from
Hero Honda.
"Hero" is the brand name used by the Munjal brothers for their flagship company, Hero Cycles
Ltd. A joint venture between the Hero Group and Honda Motor Company was established in
1984 as the Hero Honda Motors Limited at Dharuhera, India. Munjal family and Honda group
both owned 26% stake in the Company.

During the 1980s, the company introduced motorcycles that were popular in India for their fuel
economy and low cost. A popular advertising campaign based on the slogan 'Fill it – Shut it –
Forget it' that emphasized the motorcycle's fuel efficiency helped the company grow at a double-
digit pace since inception. In 2001, the company became the largest two-wheeler manufacturing
company in India and globally. It maintains global industry leadership to date. The technology in
the bikes of Hero Moto Corp (earlier Hero Honda) for almost 26 years (1984–2010) has come
from the Japanese counterpart Honda.

The new brand identity and logo of Hero Moto Corp were developed by the British firm Wolff
Olins. Thelogo was revealed on 9 August 2011 in London, to coincide with the third test match
between England and India. Hero Moto Corp can now export to Latin America, Africa and West
Asia. Hero is free to use any vendor for its components instead of just Honda-approved vendors.

RECOGNITION OF HERO MOTOCORP:

Formation of Hero Moto Corp:

Hero Moto Corp Limited

Type Public Company

Industry Automotive

Founded 19 January, 1984

Founder BrijmohanLallMunjal

Headquarters New Delhi, India

Area served India, Angola, Bangladesh,

Guatemala, Honduras, Kenya, Peru,Sri Lanka, Tanzania, Turkey, Uganda.

MD & CEO PawanMunjal

Products Motorcycles, scooters, three wheeler vehicles

Parent Hero Group

Website www.heromotocorp.com

The name of the company was changed from Hero Honda Motors Limited to Hero MotoCorp
Limited on 29 July 2011. The new brand identity and logo of Hero MotoCorp were developed by
the British firm Wolff Olin’s. The logo was revealed on 9 August 2011 in London, to coincide
with the third test match between England and India.

Hero Moto Corp can now export to Latin America, Africa and West Asia. Hero is free to use any
vendor for its components instead of just Honda-approved vendors.
On 21 April 2014, Hero Moto Corp announced their plan on a ₹254
crore (US$37 million) joint venture with Bangladesh's NitolNiloy Group in the
next five years. Also hero updated its 100cc engine range in 2014 for 110cc bikes
except hero dawn.

MILESTONES OF HERO MOTOCORP:

1956 - Formation of Hero Cycles in Ludhiana(majestic auto limited)

1975 - Hero Cycles becomes largest bicycle manufacturer in India.

1983 - Joint Collaboration Agreement with Honda Motor Co. Ltd. Japan signed
Shareholders Agreement signed

1984 - Hero Honda Motors Ltd. incorporated on 19th January at New Delhi.

The company entered into a technical-cum-financial collaboration agreement with

Honda Motor Co. Ltd., Japan (HML).

Hero Honda motorcycle CD 100 launched.

In November, 1,19,99,985 equity shares issued at par of which 71,99,985 shares

reserved for allotment as under:

31,19,998 shares to Hero Cycles (P) Ltd., Hero Investments (P) Ltd. and Bahadur
Chand Investments (P) Ltd.;

31,20,000 shares to Honda Motor Co. Ltd., Japan;

9,59,987 shares to friends and association of promoters.

Out of balance 48,00,000 shares, 2,40,000 shares were reserved for subscription by
the employees of the company and 96,000 shares by business associates. The
remaining 44,64,000 shares were offered at par for public subscription during
November1985.

The company embarked on its second phase of expansion of increasing its installed
capacity from 1,20,000 to 1,50,000 vehicles p.a. by the addition of several critical
aluminum and steel components.

1986 - 36,00,000 rights equity shares issued at par in proportion of 3:10

1987 - The company offered 6,00,000 – 15% secured redeemable non-convertible

debentures of Rs.100 each for cash at par on rights basis in the proportion of 1
debenture : 18 equity shares.

Another 3,00,000 – 15% debentures were allotted to retain over subscription. The
debentures were to be redeemed at a premium of Rs.5 per debenture on the expiry
of the 7th year from the date of allotment of the debentures.3,75,000 rights equity
issued at par in proportion of 3:10

1989 - Hero Honda motorcycle Sleek launched.850 equity shares forfeited.

1990 - The company was planning to launch a new model motor cycle – CD 100
SS, suitable to semi-rural conditions. In the domestic market, the company was
reported to have a market share of 46%.850 forfeited shares reissued.

1991 -Hero Honda motorcycle CD 100 SS launched.

1994 - Hero Honda motorcycle Splendor launched.

The company proposed to expand the capacity of existing plant at Dharuhera to
2,40,000 nos. p.a. Another plant with an installed capacity of 1,50,000 nos. p.a. at
Gurgaon Industrial Estate was being set up.

The company issued 39,79,500 bonus shares to the existing share holders in the
ratio of 1:4.

The company also issued 28,557 no. of fractional coupons representing 14,250
shares against which shares shall be allotted to presenting the same for
consolidation and allotment.

The company’s production and turnover increased to 1,83,490moorcycles and

Rs.483.85crores respectively due to growth in demand for two-wheelers and
declining inflation.

1995 - 14,420 bonus shares issued by way of consolidation of fractional coupons.

A new Technical Collaboration Agreement has been signed with Honda Motor Co.
Ltd., Japan for the period up-to the year 2004which includes technology related to
models of higher engine displacement.

The company allotted 39,79,500 equity shares of Rs.10 each as bonus on 7 th

February, by way of capitalization of General Reserves.

The company also issued 28,557 no. of fractional coupons representing 14,250
shares against which shares shall be allotted on presenting the same for
consolidation and allotment.

1997 - Hero Honda motorcycle Street launched.

HHML has set up a new motorcycle plant in Gurgaon, near Delhi for the
manufacture of the Honda Super Cub 100cc step-through bike.

1998 - The company proposes to increase the share capital to 5crore equity Shares
of Rs.10 each, 4lakhs cumulative demable preference shares of Rs.100 each and
4Lakh cumulative convertible preference shares of Rs.100 each with power to
increase or reduce it from time to time.

The company further proposes to capitalize Rs.19,96,87,5OO from general reserve

to share capital through issue and allotment of bonus shares. Altogether,
1,99,68,750fully paid bonus shares will be allotted and distributed to members of
the company holding equity shares of the company in the proportion of one bonus
share for every fully paid equity shares of Rs.10 each.

Motorcycles major Hero Honda is considering entry into scooters in collaboration

with partners, Honda Motors, after the Japanese company decided to walk out of
Kinetic Honda, their scooter venture with the Firodias of Pune.

Honda Motors recently pulled out of its joint venture with the Firodias in which it
held a 51 per cent equity stake.

Honda Motor Company Ltd of Japan (Honda) and Kinetic Honda Motor Ltd
(KHML) have signed a five—year license and technical assistance agreement
under which KHML will continue to receive the technical knowhow, critical
vehicle parts and access to Honda's markets even after the sale of Honda stake in
KHML to Kinetic Engineering Ltd (KEL).
The Company changed the paradigm in two–wheelers by launching the most
powerful and fast bike –CBZ(ee) with a unique feature of Transient Power Fuel
Control (TPEC)system.

2,39,62,500 bonus shares issued in proportion 1:1.

1999 - Hero Honda motorcycle CBZ launched.

Hero Honda Motors Ltd (HHML) and 20th Century Finance Corporation Ltd have
signed a Memorandum of Understanding (MOU) for financing of Hero Honda
motorcycles.

The company, a joint venture between Honda Motor Company of Japan and Hero
group of India to produce four-stroke motorcycles, also aims to increase its share
by 1 percent to 38.6 percent during the current fiscal.

Leading two-wheeler manufacturer Hero Motors has formed a joint venture with
Briggs Stratton of US to develop and manufacture four-stroke engines for mopeds
and scooters in India.Honda Motor Company of Japan has decided to re-enter the
scooter market in India as also foray into three-wheelers in a joint initiative with its
existing joint venture company Hero Honda Motors Ltd.

2000 - Hero Honda Motors Ltd. and Tata Finance Ltd. have signed a national tie-
up agreement. The Company is the largest manufacturer of motorcycles in the
country.

The Company will re-launch its step-through Street Smart on Baisakhi 13th April.

Hero Honda Motors Ltd (HHML), has launched an upgraded version of the
existing step-through motorcycle – the Hero Honda Street.
The Company was ranked as the 9th Highest Value Creator among 12 industry
groups within the Bombay Stock Exchange top 100 companies over a five year
period (1994-99).

2001- The Company has secured shareholders’ approval for splitting one equity
share of Rs.10 each into five equity shares of Rs.2 each in the ratio of 1:5.

Hero Honda Motors Ltd. has become the largest seller of motorcycles amongst all
Honda companies and ventures in the world by selling one million motorcycles
during the current financial year.

Credit rating Agency Crisil has reafirmed outstanding ‘AAA’ rating assigned to the
proposed Rs.15 crore non-convertible debenture issue, Rs.16 crore Commercial
paper programme and fixed deposit programme of Hero Honda
Motors.

Promoter-Chairman of the country‘s largest motorcycle manufacturing company,

Hero Honda Ltd., BrijmohanLallMunjal has bagged the prestigious Earnest and
Young Entrepreneur of the Year (EOY) here on September 27.

2002 - Hero Honda motorcycle Dawn and Hero Honda motorcycle Ambition
launched .Company included in the 30 companies Bombay Stock Exchange index

(Sensex).Become world's largest two wheeler company by selling 1.3 million

vehicles in 2001.

Japanese automaker Honda Motor for the first time decides to source motorcycles
from its Indian joint venture Hero Honda to sell as 'Honda' brand name in Vietnam.
Royalty to the Japanese parent, Honda Motor Co, hiked toRs.630 per vehicle as
compared to the flat royalty of Rs.200on existing models like Splendor and
Passion.

Approves Foreign Institutional Investors (FIIs) to increase their stake from the
present 24 percent to 40 percent .Comes out as the most profitable two-wheeler
company in the country during the trailing four quarters by over taking second-
largest player, Bajaj Auto .Smart, a 75 cc step-through .Comes out with a free
insurance scheme worth Rs.1,000 for all its bikes.

2003 - Hero Honda motorcycle CD Dawn, Hero Honda motorcycle Splendor plus,
Hero Honda motorcycle Passion Plus and Hero Honda motorcycle
Karizma launched.

Achieves a landmark sales turnover of over Rs.5,000 crore during 2002-03.Hikes

production capacity at two of its manufacturing facilities to three lakh units .Hero
Honda and SBI Cards launch co-branded credit card for Hero Honda's customers.
Achieves milestone by producing five million bikes from its Dharuhera plant in
Haryana joins hands with Small Industries Service Institute (SISI) to train the
unemployed youth who have finished diplomas.

Initiates a new dealer credit system which will bring downits receivable levels to
around seven days and save the company Rs.100 crore.

Forges marketing pact with Aprilia, the Italian bike maker, to introduce its range
of motoscooters and top-end motorcycles in India.

2004 - Hero Honda motorcycle Ambition 135 and Hero Honda motorcycle CBZ
Star launched .Hero Motors has announced a licensing agreement with Austria-
based Bombardier-Rotax that will provide 125cc-175ccengines for the upcoming
‘Hero Aprilia’ range of scooters.

2005- Hero Motocorp’s Super Splendor, Hero Honda motorcycle CD Deluxe,

Hero Honda motorcycle Glamour, Hero Honda motorcycle Achiever and Hero
Honda Scooter Pleasure launched.

2006 - 15 million production milestone achieved.

2007 - New Models of Hero Honda motorcycle Splendor NXG, New Models of
Hero Honda motorcycle CD Deluxe, New Models of Hero Honda motorcycle
Passion Plus and Hero Honda motorcycle Hunk launched.15 million production
milestone achieved. Hero Honda Motors Ltd. has appointed Mr. Yutaka Kudo as
Director and Whole-time Director of the Company in the category of Executive
Director w.e.f. April 1, 2007.

2008- New Models of Hero Honda motorcycles Pleasure, CBZ Xtreme, Glamour,
Glamour and Hero Honda motorcycle Passion Pro launched .Hero Honda Motors
Ltd has informed that Mr. Arun Nath Maira has been appointed as the Additional
Director in the Category of Non-Executive and Independent Director
w,e.f.December 20, 2008 by the Board of Directors by way of passing a resolution
by circulation.25 million production milestone achieved.

2009 - New Models of Hero Honda motorcycle Karizma – ZMR and limited
edition of Hero Honda motorcycle Hunk launched Hero Honda Motors Ltd has
appointed Mr. Ravi Nath as an Additional Director in the category of Non-
Executive and Independent Director w.e.f. October 14, 2009 by the Board of
Directors by way of Passing a resolution by circulation on October 14, 2009.
2010 - New Models of Hero Honda motorcycle Splendor Pro and New Hero
Honda motorcycle Hunk and New Hero Honda Motorcycle Super Splendor
launched.

2011 - New Models of Hero Honda motorcycles Glamour, Glamour FI, CBZ
Xtreme, Karizma launched. New licensing arrangement signed between Hero and
Honda.In August, Hero and Honda parted company, thus forming Hero Moto Corp
and Honda moving out of the Hero Honda joint venture. In November, Hero
launched its first ever Off Road Bike Named Hero "Impulse".

2012 - New Models of Hero Moto Corp – Maestro the Musculine scooter and
Ignitor, the young generation bike, are launched.

2013 - Hero Moto Corp unveiled line-up of 15 updated products including

Karizma R, ZMR, XTREME, Pleasure, Splendor Pro, Splendor ISMART, HF
Deluxe ECO, Hero Moto Corp Super Splendor, Passion Pro and XPRO, Glamour
and Glamour FI etc. It also introduced three new technologies- Engine Immobilizer
in new XTREME, Integrated Braking System (IBS) in new Pleasure and i3S (Idle
Stop and Start System) in new Splendor ISMART[13]

2014 - Hero Moto Corp Launched Splendor Pro Classic

2015- Hero Moto Corp Launched Hero Impluse

2016- Hero Moto Corp Launched Hero HX 250R

2018- Hero Moto Corp set to introduce four motorcycles with 200-300cc engine
capacity

Termination of Honda joint venture:

By December 2010, the board of directors of the Hero Honda Group had decided to terminate the
joint venture between Hero Group of India and Honda of Japan in a phased manner. The Hero
Group would buy out the 26% stake of the Honda in JV Hero Honda. Under the joint venture
Hero Group could not export to international markets (except Nepal, Bangladesh and Sri Lanka)
and the termination would mean that Hero Group could now export. Since the beginning, the
Hero Group relied on their Japanese partner Honda for the technology in their bikes.

The Japanese auto maker will exit the joint venture through a series of off market transactions by
giving the