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    Macro Analysis of The Indian Motorbike Industry

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    Pooja Yami
    Hero Honda's motorbikes succeeded in India due to various social, technological, and economic factors. Socially, there was a lack of suitable roads for cars and motorbikes became affordable transportation. Technologically, Hero Honda's four-stroke engines were more efficient and less polluting than competitors' two-stroke engines. Economically, India's low motorcycle penetration rate and growing population represented a major market opportunity, while the 2008 recession boosted Hero Honda's focus on affordable vehicles.

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    Macro Analysis of The Indian Motorbike Industry

    Uploaded by

    Pooja Yami
    36 views1 page
    Hero Honda's motorbikes succeeded in India due to various social, technological, and economic factors. Socially, there was a lack of suitable roads for cars and motorbikes became affordable transportation. Technologically, Hero Honda's four-stroke engines were more efficient and less polluting than competitors' two-stroke engines. Economically, India's low motorcycle penetration rate and growing population represented a major market opportunity, while the 2008 recession boosted Hero Honda's focus on affordable vehicles.

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    Hero Honda's motorbikes succeeded in India due to various social, technological, and economic factors. Socially, there was a lack of suitable roads for cars and motorbikes became affordable transportation. Technologically, Hero Honda's four-stroke engines were more efficient and less polluting than competitors' two-stroke engines. Economically, India's low motorcycle penetration rate and growing population represented a major market opportunity, while the 2008 recession boosted Hero Honda's focus on affordable vehicles.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    36 views1 page

    Macro Analysis of The Indian Motorbike Industry

    Uploaded by

    Pooja Yami
    Hero Honda's motorbikes succeeded in India due to various social, technological, and economic factors. Socially, there was a lack of suitable roads for cars and motorbikes became affordable transportation. Technologically, Hero Honda's four-stroke engines were more efficient and less polluting than competitors' two-stroke engines. Economically, India's low motorcycle penetration rate and growing population represented a major market opportunity, while the 2008 recession boosted Hero Honda's focus on affordable vehicles.

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    Macro Analysis of the Indian Motorbike Industry

    STEEPLED ANALYSIS
    1) SOCIAL FORCES
    - Lack of roads that were suitable for four wheelers increased the demand for 2 wheelers
    - Two Wheelers were a priced possession.
    - Expensive four wheelers. The time and the opportunity were apt and Hero Honda stuck the cord at the
    right time in all the strata including the tier 1 and tier 2 cities (the initial penetration of two wheelers being
    around 10%). This created a social impact and brought about change.

    2) TECHNOLOGICAL FORCES
    - four-stroke engines were superior to the incumbent two-stroke engines in multiple areas Hero Honda had
    the first and for many years only four-stroke vehicle (except for Royal Enfield’s 346 cc four-stroke)
    -These four stroke engines were more efficient, less fuel consuming, long lasting and gave a better milage
    than a two-stroke engine or a scooter.

    3) ECONOMIC FORCES
    - India had a penetration rate of less than 10% which was way below that of other Developing countries so
    the Indian market had a huge space to grow this helped Hero convince Honda that a large population
    coupled with emerging market economic situation constituted an excellent market for affordable,
    motorized, two-wheeled scooters.
    - Further the economic crash or 2008 proved to be a boon for Hero Honda as their nearest rivals focused on
    high end bikes while they focused on affordability.

    4) ENVIRONMENTAL FORCES
    - Government becoming strict with the emission regulations made environmentally friendly vehicles more
    attractive and two wheelers with fuel efficiency and low emissions fit the bit
    - Four stroke engine of Hero Honda was less polluting than two stroke ones. Hero Honda bike was fuel
    efficient and gave a better mileage.

    5) POLITICAL & LEGAL FORCES


    - In the mid 1980’s the government started permitting foreign companies to enter the Indian Market through
    minority joint ventures with domestic alliance partners. The restrictive government policies in the pre
    liberalization era prevented foreign companies from making investment in India which was changed by the
    1991 reforms, thus setting up the red carpet for Honda to make a mark in the Indian automobile sector with
    Hero.
    -License raj prevented and prohibited the foreign company from investing in India however FIPB
    regulations enabled the Hero to join hands with Honda, thus opening up the market creating accessibility.

    6) ETHICAL FORCES
    - Environmentally sound technology is the ethical orientation that Hero Honda has.
    - Hero Honda actually delivered what they initially promised and actually realized the slogan ‘Fill it, Shut
    it, Forget’ it in reality
    - This led to an increase in their market share and reputation

    7) DEMOGRAPHIC FORCES
    - With the Indian population growing at 2.1% every, the adult age group has the highest possibility of
    buying two-wheelers (15–65-year-olds) and increased to more than 500 million by 1990 and to an
    approximate 700 million by 2006.
    - 5.2% increase in the per capita income over the next 10 years.
    - By 2000, motorcycles were the choice of 60 per cent of India’s two-wheeled customers, up from 33 per
    cent in 1996.
    - Increasing rural urban migration, Urban population density and traffic congestion in metro cities.

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