Five forces Analysis of Two-wheeler industry
TWO WHEELER INDUSTRY
Business Model of 2 wheeler Industry in India
As shown above, the business model is formulated as input process output. For a two wheeler industry,
The inputs to the OEM constitutes of
1. Import of parts: the basic ingredients for model building are the parts such as drive chains, engines, components, transmissions etc.
2. Auto Component Manufacturer: There are 300+ players in the industry which manufacture auto parts components and perform tasks such as castings, forgings, tires etc
3. Raw material Supplier: This forms the initial requirement for the development of any vehicle. The raw material of which it is composed of consists of sheet metal, aluminium etc.
The processing involves:
1. Manufacturer
Original Equipment Manufacturer(OEM): The industry is highly concentrated with 3 players constituting 80% of the market share, namely Hero Moto, Bajaj Auto & Honda Motors. This industry has a turnover of 55K Cr by producing over 13.33mn units in the FY 2011.
2. Dealership Network
Dealer: In the Indian domestic market, the dealer are numbered over 2000
Sub- Dealer: The sub dealers, also known as the touch points are over 12000. This dealership network forms the competitive advantage of a company in the market
Service Centers: These provide after sales service for the two wheeler industry and form the part of maintenance and helps in building customer loyalty.
The output part of the business model comprises of
1. Domestic Customers: There is a low penetration in the domestic market with coverage in rural market as low as 7%.
2. International Customers: The major markets for two wheelers are Africa, Latin America & South East Asia
INDUSTRY ANALYSIS
The industry is highly concentrated and there is a strong foothold by 3 major players in the industry namely Hero Moto constituting 39% of the market share, Bajaj Auto constituting 27% of the market share and finally Honda Motors with 14% market share. So,
Business Model of 2 wheeler Industry in India
As shown above, the business model is formulated as input process output. For a two wheeler industry,
The inputs to the OEM constitutes of
1. Import of parts: the basic ingredients for model building are the parts such as drive chains, engines, components, transmissions etc.
2. Auto Component Manufacturer: There are 300+ players in the industry which manufacture auto parts components and perform tasks such as castings, forgings, tires etc
3. Raw material Supplier: This forms the initial requirement for the development of any vehicle. The raw material of which it is composed of consists of sheet metal, aluminium etc.
The processing involves:
1. Manufacturer
Original Equipment Manufacturer(OEM): The industry is highly concentrated with 3 players constituting 80% of the market share, namely Hero Moto, Bajaj Auto & Honda Motors. This industry has a turnover of 55K Cr by producing over 13.33mn units in the FY 2011.
2. Dealership Network
Dealer: In the Indian domestic market, the dealer are numbered over 2000
Sub- Dealer: The sub dealers, also known as the touch points are over 12000. This dealership network forms the competitive advantage of a company in the market
Service Centers: These provide after sales service for the two wheeler industry and form the part of maintenance and helps in building customer loyalty.
The output part of the business model comprises of
1. Domestic Customers: There is a low penetration in the domestic market with coverage in rural market as low as 7%.
2. International Customers: The major markets for two wheelers are Africa, Latin America & South East Asia
INDUSTRY ANALYSIS
The industry is highly concentrated and there is a strong foothold by 3 major players in the industry namely Hero Moto constituting 39% of the market share, Bajaj Auto constituting 27% of the market share and finally Honda Motors with 14% market share. So,