this volume player stunned market watchers with its aggressive attack. pawan chabra finds out how hero honda achieved more than what was expected of it
To state the secret to success in two words – new launches! The head honchos at Hero Honda went straight back to their drawing boards and zeroed-in upon the fact that attracting customers during times of a downturn would require more magic than just play the pricing game. Then came the slew of launches, one following another. Besides the sporty and macho Hunk and the stylish new CBZ Xtreme, the company managed to make its mark on the conscious Indian consumers with other fresh new launches such as the Passion Pro Power Start, new Splendor NXG, and a variant of the Pleasure.Result: Currently, Hero Honda has a strong market presence in the 150cc segment. The company has more than doubled its volume and market share in the premium segment over the past couple of years. And this has given it that edge in terms of absolute margins.
That sounded great news for Hero Honda in the premium category, but the tiding doesn’t come sans challenges; the biggest being Bajaj Auto. When it comes to the premium segment, one cannot deny that though the company is a very strong player in the executive segment, Bajaj Auto still rules the roost in the premium segment. Consider this: during FY’09, Hero Honda sold about 0.19 million units in the premium segment. Now compare this to the much higher 0.84 million units sold by Bajaj Auto, and you understand why there is much catching up to be done on the part Hero Honda. But having said that, we also do confess that the pace at which Hero Honda is catching up, it surely appears to be determined to give Bajaj a run for its money in the premium segment as well.
That sounded great news for Hero Honda in the premium category, but the tiding doesn’t come sans challenges; the biggest being Bajaj Auto. When it comes to the premium segment, one cannot deny that though the company is a very strong player in the executive segment, Bajaj Auto still rules the roost in the premium segment. Consider this: during FY’09, Hero Honda sold about 0.19 million units in the premium segment. Now compare this to the much higher 0.84 million units sold by Bajaj Auto, and you understand why there is much catching up to be done on the part Hero Honda. But having said that, we also do confess that the pace at which Hero Honda is catching up, it surely appears to be determined to give Bajaj a run for its money in the premium segment as well.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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