Source: Livemint.Com
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What is Hero Honda not doing right and Bajaj is?
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What is Hero Honda not doing right and Bajaj is?
What is Hero Honda not doing right and Bajaj is?
Source: Livemint.Com
lower growth for Passion and relatively lower margins for Passion Pro, besides a higher marketing spendFor Hero Honda, erosion in profit share has been much higher compared to marginal loss in market share. From a high of 74% of total operating profits (cumulative, top 4) in financial year 2009, its share declined to 51% in the nine months of the current fiscal. We expect domestic motorcycle operating margins in the nine months of this fiscal to be about 13% versus 17% peak in the last fiscal,Hero Honda has been unable to match the success of Bajaj DiscoverYes, Bajaj brands have scored better than Hero Honda because they are newer brands. I have some concern on the split between Hero and Honda, but it is not significant. The split will not alter business for Hero products, it will mean different branding but also a different cost structure. What I want to se is how much R&D Hero is able to do on its own,
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Putting it in understandable terms for the biker, i think what they're trying to tell is that HH ought to launch anther new niche bike like the Original CBZ or the Karizma to survive post 2014.. Else, it can at the best trick rural people into buying their ancient relics.. Hoping that Hero will survive and grow up as a great Indian brand with innovative motorcycles unlike its past where its been under Honda's Shadow.. As for Bajaj, they also have a leading edge because of extremely competitive rates from all vendors compared to HH..sigpicMy IBA SS delayed.. Damn.. ;-(
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Hero Honda's Strategy
Hi
Hero Honda did visit our campus and a few uncomfortable questions were put to them regarding their future launches etc. They did not have any concrete plans for anything niche. However all said and done they are a volume based player and to them it does not matter if a few folks in the cities dislike their bikes. They have a really huge base amongst the rural populace which only seems to be getting larger. At the risk of brickbats in this forum someone from rural India is never going to touch a Ninja even if he had the money.
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Its true that in towns, people trust HH blindly. However, these towns are fast converting into cities. Also, the split of Hero and Honda will definitely get noticed by the town people. And to be frank, Hero does not have any working brand other than Splendor and Passion. Brands like Glamour, Achiever, Super Splendor n all have failed. Hunk and CBZ are there in the premium segment (premium for town people) but even they have a small share.
If Hero needs to sustain itself, it needs to create brand. And that will not happen overnight. Discover brand was established only after years of failure. Lets hope Hero has something in store. They must know that Splendor and Passion won't last for another century.
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I have a feeling that the Hero and Honda split has pushed the Hero group to the same era as Bajaj before the first Pulsar was launched.
Hero group will have to develop their RnD department at the pace of light if they have to sustain the cut-throat competition..
I see Bajaj's shares growing in the coming 2 years...
Investors, invest in Bajaj Auto
Signals which are timed for 50 Kmph are also timed for 100 Kmph :)
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very well said bro.............Originally posted by cmahajan View PostI have a feeling that the Hero and Honda split has pushed the Hero group to the same era as Bajaj before the first Pulsar was launched.
Hero group will have to develop their RnD department at the pace of light if they have to sustain the cut-throat competition..
I see Bajaj's shares growing in the coming 2 years...
Investors, invest in Bajaj Auto
becuase i don't think there even exists an R&D dept. in HH.
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Hero Honda has always been a volume player. It is no porsche or Ferrari. Over the years it provided reliable two wheel transport to anyone and everyone who could not afford the car. Hero Honda never made bikes for bikers no matter what their advertising says. Fill it Shut it Forget it. About money rather than biking. And it was a smart thing to do in those days. But the trouble is they never changed. But the people have. Please understand the youth today is a lot different from the youth in 80s. They can sacrifice a bit of mileage for a bit more of style. And style not as in ++ but genuine good design. People are more aspirational these days. Also the market has matured a lot. In the 80s there was a lot of gap between a bike and a car. Now Nano is available at 1.5 lakhs or some such. Loans are easily available. Yes it will take another 10 years when like the west where only people who want to ride will buy bikes and till then Hero can still do well but it has to change how people perceive it as. What has worked wonders for them till now is their anathema now. Fill it shut it forget it doesn't work as well as fill it shut it revv it. It will be interesting to watch how the Munjals will respond it. My advice get a younger Munjal in charge a la Rajiv Bajaj the oldies are incapable of understanding the youth and right now it is the market of youth.
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