HONDA- Races Ahead in the “CITY”

Group Nine Sec- ADr. Daman Walia ( 13/09)

Koustubha Bhutra ( 25/09)Ashank Mathur ( 29/09)

Abhinaw Shrivastava ( 67/09)Harsh Khemka (117/09)Sunanda Mitra (149/09)

To analyze the reasons for the success of Honda City

To analyze the strengths and weaknesses of Honda City

To make commercials for Honda City based on its

strengths

1. Objectives

1. Industry Overview2. Changing Trends in the Industry3. Macro Influences on the Industry4. Drivers of Growth5. Market Analysis6. Company Analysis- HONDA7. Market Research Methodology8. Macro and Micro Influences9. SWOT Analysis and Commercials

Flow of Presentation

Sales:◦ 2008: 10.82 million units◦ 2008: 100 billion dollars as Revenue

1. Industry Overview

Pass

enge

r Veh

icle

s

Comm

ercial

Veh

icle

s

Thre

e-whe

eler

s

Two-

whe

eler

s0

10

20

% age Growth

% age Growth

Source: SIAM

Geographical Distribution of Sales of Automobiles in India

Source: AUTOCAR INDIA

Industry Overview- Geographical Distribution

25%

32%11%

32%

Sales

NorthSouthEastWest

1. The Governmenti. Role-reversal: From Controller to Enabler.ii. Implementation of growth oriented economic policies.

2. Competitioni. Entry of International Playersii. Huge Investment on R & Diii. More JVs and collaborations

3. Customeri. Higher buying powerii. Increasing expectations from products & servicesiii. Fierce competition makes customer the KING

4. Pollution Normsi. Companies going Greenii. Awareness on the rise

5. Safety Norms

2. Changing Trends in the Industry

3. Macro Influences on the Industry

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-080

1

2

3

4

5

6

7

8

9

10

Total

Total

A Booming Market Economy- GDP Growth Rates

Source: SIAM 2008

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-080

50

100

150

200

250

300

Total

Total

Increasing Foreign Exchange Reserves

Source: SIAM 2008

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-080

0.05

0.1

0.15

0.2

0.25

0.3

0.35

Total

Total

Import Tariff Reduction

Source: SIAM 2008

4. Drivers of Growth

Long Term Drivers Short Term Drivers

Growth of middle class from 50 million to 550 million by 2025.

Export of Automobiles and Auto Components.

Low Cost of Production.

Infrastructure Development: 500 billion dollars in the next 5-6 years.

Low Penetration Rate of Vehicles: Approximately 8/1000.

Access to Capital at reasonable interest rate.

Main Players in Passenger Cars Segment:

5. Market Analysis

47%

16%13%

8%

8%

8%

Sales

Maruti SuzukiHyundaiTata MotorsGM, FordHondaOthers

Main Players/ Competitors:◦ Maruti Suzuki: 51.4%◦ Hyundai Motors: 17.97%◦ Tata Motors: 13.88%

Other Players/ Competitors:◦ General Motors: 3.76%◦ Ford India: 2.57%◦ Mahindra Renault: 2.15%

Source: SIAM 2008

Competition Overview

6. Company AnalysisHONDA

Honda started in 1930’s Established as a company on 24th

September, 1948 Headquarters: Tokyo, Japan Founder: Soichiro Honda CEO India: Masahiro Takedagawa 1981: First Honda City

Introduction

Incorporated in India in December, 1995 Joint Venture- Honda Motor Co. Ltd. & Japan

and Siel Ltd. Honda City introduced in India in 1997 Other passenger cars include Civic, Accord,

Jazz and CRV

Honda in India

We see “The Power of Dreams” as a way of thinking that guides us and pushes us forward. The strength of our company comes from this philosophy- which is based on the visionary principles of our founder, Soichiro Honda.

We see the world not as it is, but as it could be. We see the world through the eyes of the dreamers, because we are a company founded by a dreamer. And we are a company built on dreams.

Mission Statement

Accord and CRV: Elite Class

Civic, City and Jazz: Upper Middle Class

Honda has always targeted the elite and the upper middle class groups.

Market Segmentation

Two surveys- Honda Dealers and Customers of Honda City

Two Stages- Pre-purchase and Post-purchase Interviews of dealers of Honda Questionnaires filled by customers of Honda City Inferences drawn from surveys- Identify the

strengths, weaknesses, opportunities and threats for Honda

Commercials for Honda City to highlight it’s USP

Questionnaire

7. Market Research Methodology- Honda City

Parameters Average Rating Maximum rating (Freq)

Brand Value 4.13 4

Popularity 3.47 3

Experts Opinion 3.77 4

Test Drive 3.57 4

Price 3.47 3

Comfort 4.17 5

Mileage 3.43 3

Looks 3.13 4

Maintenance 3.67 4

Resale 2.9 4

Consumers Response- Pre-purchase

Parameters Average Rating Maximum rating (Freq)

Brand value 4.4 5

Driving Experience: 4.33, 4 4.33 4

Price: 3.67, 3 3.67 3

Comfort:4.2, 4 4.2 4

Mileage: 3.57, 4 3.57 4

Design: 3.9, 4 3.9 4

After Sales:3.7, 4 3.7 4

Driving Experience: 4.33, 4 4.33 4

Interiors 4.1 4

Legroom 3.87 4

Value For Money 4.07 4

Consumer Response- Post Purchase

8. Macro and Micro Influences

Macro Influences Micro Influences

Communication Explosion

Urbanization of Mind

Increase in Consumerism

Increase in Urbanization

Emphasis on Research and Development

Awareness about Safety and Pollution

Streamlining Production

Billboards

Advertisements and Commercials

Sponsoring Sports Events

Social Marketing

BCG Matrix: Star

HONDA CITY- Promotion Strategies

9. SWOT Analysis and Commercials

Fuel/Cost Efficient Technology

Brand Value

Unique Style and Design

Comfort

Driving Experience

Price

Maintenance

Strengths

Delivery Time of 4-7 Days

Insufficient Roadside Assistance

Weak Customer Helpline

Before Purchase Response Better Than After Purchase Response

Weaknesses

Increasing Environmental Awareness

Stricter Government Regulations

Innovation

Emerging Markets

Economic Liberalization

Opportunities

Reduced availability of finance

High Interest Rates

Rising Commodity Prices

Slow Growth in Service Sector

Dollar Fluctuation

Threats

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