TWO WHEELER MARKET

AGENDA

• Growth Trends In Two Wheeler Industry• Segment Wise Change In Domestic Market• Player Wise Scenario• Growth Trends In Domestic Motor Cycle• Player Wise Sales Review• Economy Segment Player Wise Domestic Share• Growth Of Two Wheeler Industry And Scooters• Executive Sub Segment• Trends In Cost Structure• Localization Gaining Strength

GROWTH TRENDS IN TWO WHEELER INDUSTRY

1 2 3 4 5 60

5

10

15

20

25

30

35

40

13.6

34.3

29

0

7.3

17.9

26 25.6

13.9

2.96.5

8.1

growth in exports growth in domestic sales

Two wheeler industry

•Revenue- 755b•Sales Volume -18m Units•7.9% CAGR- Motorcycle•25.2% CAGR - Scooters

SEGMENT WISE CHANGE IN DOMESTIC MARKET

2013-14 2014-150

20

40

60

80

100

120

140

160

MOTORCYCLES MOPEDS SCOOTER

70.8 67.1

4.94.7

24.3 28.2

Motor cycles dominate 2 wheelers industry – 2/3 total market shareScooter - gender biased positioningMopeds - demand decreased from Tamilnadu and Andhra

PLAYER WISE SCENARIO

2013-14 2014-150%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

OTHERSTVS MOTORBAJAJ AUTOHMSIHERO MOTO CROP

41.3 40.2

24 26.6

14.2 11.1

11.8 13.20.7 0.9

Hero- dominate market share - poor product portfolio, lack of new modelHMSI – second position – model launches in executive and premium motor cycles TVS surpassed Bajaj – absence of scooter segment , poor product mix

GROWTH TRENDS IN DOMESTIC MOTOR CYCLE SALES

1 2 3 4 5 60

5

10

15

20

25

30

25.8

22.9

11.7

0.1

3.92.5

2625.6

13.9

2.9

7.3 8

GROWTH OF MOTORCYCLE SEGMENT

GROWTH OF TWO WHEELER INDUSTRY

Domestic motor cycle sales (67% of total 2 wheeler industry)Grew 2.5% against industry 8%Weak sales in rural areas – 46%CAGR - Exports – 15.3% , domestic – 7.9% , total motor cycle – 9%

2010-11 2012-13 2014-150%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1.2 2.1 4.83.1 3

3.27.311.8

16.475.5

6.226.8 24.4

16.5

54.6 53.2 52.9

PLAYER WISE SALES REVIEW

others Yamaha Motorw HMSI TVS Motors Bajaj Motors Hero MotoCorp

Hero lead the segment ( competition from HMSI) Bajaj lost its market (despite launching new models and variants) TVS lost 3rd position to HMSI- lack of wide range and poor sales volume

ECONOMY SEGMENTPLAYER WISE DOMESTIC SHARE

Bajaj Auto.Ltd Hero Moto corp Ltd T.V.S Motor Company Indian Yamaha Motor Pvt.Ltd0

10

20

30

40

50

60

70

24.7

46.4

27.2

1.6

24.9

53.2

20.2

1.7

25.1

57.8

15.8

1.3

2010-11 2012-13 2014-15

Hero leads in economy segment 18-20% share in motor cycle segment Demand- semi-urban areas and rural

Others

Hero MotoCorp

Bajaj Auto

HMSI

0 10 20 30 40 50 60 70

0.8

66.5

21.2

9.2

1.3

62.6

20.2

14.6

2.2

66.3

8.4

5

EXECUTIVE SUB-SEGMENT

2014-15 2012-13 2010-11

Hero leads in executive sub- segment too. (splendor and pleasure)HMSI- market share 15% - (dream yuga, dream neo)Bajaj lost (8.4%) ,

Bajaj auto ltd Hero Moto Corp ltd India Yamaha Motor pvt.ltd TVS Motor Company Ltd0

10

20

30

40

50

60

48.2

20.4

10.9 8.7

40.6

16 14.1

7.4

35.9

8.2

16.2

10.3

PREMIUM SUB SEGMENTPLAYER WISE DOMESTIC MARKET SHARE

2010-11 2012-13 2014-15

Bajaj loses market share but maintains Leadership – 36% Market ShareBajaj Re-launched Pulsar Range18.5% To Domestic Motorcycles Sales VolumeRoyal Enfield- Second Largest Player – 16.2% ( sales growth 45% CAGR)TVS- APACHE

GROWTH OF TWO WHEELER INDUSTRY AND SCOOTERS

2009-10 2010-11 2011-12 2012-13 2013-14 2014-150

5

10

15

20

25

30

35

40

45

27.6

40.7

24.4

14.2

23.2 25.126 25.6

13.9

2.97.3 8.1

Growth in ScootersGrowth of Two wheeler industry

Scooter Sales CAGR – 25.2% (2009-15) Demand- Ungeared Scooters Share of scooters in total domestic two wheeler sales- 28.2%

TRENDS IN COST STRUCTURE

2009-10 2010-2011 2011-12 2012-13 2013-14 2014-150

102030405060708090

100

69.4 73.1 74 73.7 71.5 71.7

3.73.4 3.3 3.7 4 4.54.8

4.2 3.2 3.8 4.3 4.55 4.3 3.64.2 4.6

517.1 15 15.9 14.6 15.6 14.3

Raw material cost Employee Costs Other Manufacturing ExpensesSelling Expenses Operating Margins

Tren

ds in

cos

t str

uctu

re(p

erce

nt)

Value engineers, vendor and workforce rationalization localizationRaw materials- economic crisis (steel and aluminum prices)Employee – 4.5%( higher 10yrs)Advertising expense – 20.5% , Marketing and distribution- 22.9%, Selling and distribution = 21.9%

2009-10 2010-11 2011-12 2012-13 2013-14 2014-1585

87

89

91

93

95

97

99 98.3

95.896.1

94.2 93.6 94

96.4

95.4 95.6 95.4 95.7 95.7

89.889

87.486.2

85.5 85.6

9695 95

9493 93

Hero MotoCorp Bajaj Auto TVS Motors Industry Indigenisation

LOCALIZATION GAINING STRENGTH

Localization level – 96.97% (reduce costs)Import technologies for newer models ( localization level )