INDUSTRY PROFILE

1.1Brief history of the industry, Industry structure

The automobile sector is one of the vast combinations of formulation and coordination
integrated altogether with the blueprint, gathering, advancing, and creation of automotive.
This is considered as a notable one of the world's most imperative monetary parts by salary.
The automobile industry excludes pioneers targeted on the upstream of cars mainly from start
to the end-customer. Example for that is, automobile repair work shops and motor gas
stations.

The automobile is one of the primary ventures at the overall dimension. It plays a
fundamental employment in the improvement of the overall economy because of the high
livelihoods and extended customer demands. The vehicle business develops money related
improvement of the country; thusly, it is commonly seen as an important monetary part. The
vehicle business includes different associations worked in auto manufacturing, and
furthermore the ones drew in with displaying and dissemination of vehicle things, for
instance, cars, transports, vans, trucks, cruisers, mopeds and automated bicycles. The overall
vehicle industry merges a couple of broad car creators' alliances that work agreeably
suppliers at the overall dimension.

The word auto came from Greek word "autos" means self, combining the Latin word
"motivus" means of development, for addressing all kind of self-powered automobile. The
term "Automotive" was suggested by Elmer Sperry.

The automobile manufacturing started in the 1860s by evolving numerous manufacturers that
initiated by making the horseless carriage. After that quite a while, the connection with U.S
has taken the world cause high end automobile production. At the end of 1929, going before
the unique debilitation, 32,026,600 automobiles were driven and used. The United States
manufacturers made around 90 percent of the vehicles. Later, the states got one vehicle for
almost 4.87 individuals each. Post Second World War, they contribute around 3/4th of total
produces. In the 1980's, they were overpowered by JDM and a short time later transformed
into world's pioneer again in 1994. In 2006, Japan outperformed the states in advancement
and held this rank until 2009, when China took the best spot with 13.8 million units. With
19.3 million units made in 2012, China for the most part expanded United States age, owning
almost 11 million units, where the third place was furnished by Japan.
1.1.2 Industry Volume, Current Scenario

Motorcycle industry in India vastly developed rapidly in the nation ever from the declaration
of the process of liberalization in 1991 by the then finance minister Dr. Man Mohan Singh.

Previously, there were only a lot of bicycle models open in the country. At this moment,
India is the second greatest producer of bicycles on earth. It stays next just too Chinese and
the Japanese, the extent that the amount of bicycles made and the ideas of bicycles
independently. In the year 2005-2006, the yearly formation of bicycles in India stayed at
around 7600801 units.

The pattern of owning bikes is because of an assortment of actualities unconventional to the

nation. One of the main elements is poor open transport in numerous pieces of India.
Furthermore, bikes offer a lot of comfort and versatility for the Indian family.

Bajaj auto started exchanging imported Vespa two wheelers in 1948. Then Automobile
Products of India (API) initiated creation of motorcycles in the mid 50's. Before 1958, API as
well as Royal Enfield were in the spotlight for producing motorcycles. Be that as it may,
Bajaj marked a specialized cooperation in 1960 with Piaggio of Italy to deliver Bajaj
Scooters. This arrangement lapsed in 1971.

The state of cruiser producers was the same. Before the 1980's, lastly just only three
noteworthy cruiser makers specifically Royal Enfield, Rajdoot and Escorts. Motorcycle retail
was established to remote producers in the 1980's. The business, paved way for a smooth ride
previously, confronted furious remote challenge. Bike organizations like the Yamaha, Honda,
and Kawasaki, set up shop in India in a joint effort with different Indian bike organizations.
Organizations like Escorts, Rajdoot and confronted gigantic challenge from littler 100cc
Japanese innovation motorcycle. Bikes produced by Hero Honda, one of the leading
producers of four stroke motorcycles, has achieved huge prominence.

The adjustment in the administration's approach acquiring to contamination quality standards

and in this scenario, Kyoto understanding envisioned elimination of two stroke bikes
manufacturing. As of now there are around 10 bike makers in the nation, they being Hero,
Bajaj, Mahindra, Honda, Indus, Yamaha, TVS, Suzuki, Royal Enfield, and Kinetic.

The most recent pattern in the bike stream is presentation of electric based worked
automobiles from a scope of producers, for example, Hero. They are revived from supporting
family electric base focuses. The main weakness found was speed, and it is confined to
almost 25 mph.

In the present days, the market ids full of higher technology based motorcycle. People are
more aware about the mileage of the motorcycle, some class of consumers are not even
bothered about the mileage, as they are looking forward to buy 1000cc motorbike, or as
called as superbike, having greater power. With the invention of DTSi, Bajaj turns out to be a
spectator in the bike market world.

Domestic Motorcycle Sales - FY 2023

Others; 12%

Hero MotoCorp; 32%

Royal Enfield; 8%

TVS; 14%

Honda; 27%
Bajaj Auto; 16%

Hero MotoCorp Honda Bajaj Auto TVS Royal Enfield Others

Porter Five Force Model

 Bargaining
power of
suppliers

Threat of
New
Industry Threat of
Entrants Rivalry Substitutes

Bargaining
Power of
buyers

THREAT OF NEW ENTRANTS

It is expensive and difficult for new entrants/brands to enter the auto mobile industry which is
because of the large investment required in today's market scenario.

Initially, a quite huge investment will be required to set up the manufacturing facilities,
distribution network and to hire skilled staff. Another major difficulty is the level of
competition from the brands already existing in the market. As many new brands comes up
with an innovative and different bikes in the market the chances to capture a market share is
strong. While the law does not cause any barriers for new entrants, but the brand image and
reputation are the major challenges faced new players. Brand image is the most important
competitive advantage for the existing brands in the market. Any new brand will have to
focus on engineering and quality of the product.

Getting access to raw material can be easy but then achieving economies of scale difficult for
small players. Hence the threat of new entrants in the royal Enfield is strong in nature.

BARGAINING POWER OF SUPPLIERS

The bargaining power of suppliers in the auto mobile industry is high as most of the players
operate in small scale. Only few of them are significant in size. The threat of forward
integration is minimum from the suppliers for the reasons discussed in the first category.
These suppliers do not have to operate as per the rules set by the brands. The suppliers hold
immense share because the raw material is available in large quantity and switching from one
supplier to another supplier is difficult for them. In this way, the bargaining power of
suppliers is considerably high. As royal Enfield operates at large scale, the resultant
bargaining power of suppliers is moderate in nature.

BARGAINING POWER OF BUYERS

A large part of the buyers are the small individual buyers that buy single type of bikes.
However, there are corporations and government agencies that buy fleets of cables. Such
buyers are in a position to bargain for lower prices. Whether small or large buyers cannot
easily switch to a new brand. From the buyers point of view there are big expenses involved
in switching to another brand from the target brand. The buyers are price sensitive mostly and
would switch to another brand that offers lower prices. None of the buyers, neither big
corporations nor small buyers pose a

threat of backward integration.

Based on the overview the bargaining power of buyers is moderately strong. Brands focus on
improving customer loyalty through design, quality and by offering competitive prices. This
is for Buyers in Cable Industry. Bargaining power can be high due large size of Buyers or lot
of options due to multiple suppliers etc.

THREAT OF SUBSTITUTES
None of the other alternatives can provide the kind of accessibility and convenience that a
bike does. So, the threat of substitutes is weakened. There is some level of threat from the
substitute products, mostly as all of them are large scale producers, where daily commuters
may find it cheaper and easier to use due to better mileage. Due to reliability and reputation
of Royal Enfield, the threat of substitutes is weak in the market.

COMPETITIVE RIVALRY IN THE INDUSTRY

The numbers of valued and persuading brands are low and the difficulties in exiting the
industry are very high. As per the situation of the market any brand wanting/trying to leave
the market would have to face very large losses and damage to the brand value. The level of
customer loyalty is high and while the industry is large, it has matured. This intensifies the
competition or market share. Different brands have targeted different market segments but
still there is overlap in the target market. Brands competition is based on various factors such
as price, design, quality, technology, customer safety etc. Due to larger competition and
largescale industry competition, the rivalry for royal Enfield is high.

Conclusion

Initially, a quite huge investment will be required to set up the manufacturing facilities,
distribution network and to hire skilled staff so its difficult for new players to enter in this
sector. The level of customer loyalty is high and while the industry is large, it has matured.
This intensifies the competition or market share. Thus competitive rivalry in the industry is
strong.

FORECASTING INDUSTRY ATTRACTIVENESS

Two wheelers have been around for more than 150 years, but it's only within recent years that
we've noticed the scary Environmental ramifications of the automotive industry. You've got
to wonder: will the market for motor vehicles survive with all this tension
As a general trend, individuals around the world are earning more and more money every
year. This means they have more money to spend on luxury items such as electronics and, of
course, automobiles! It comes as no surprise, then, that demand for motor cycles is surely
growing. This is especially true in developing regions such as some African states where
recent economic developments have only now made it possible for poorer households to
afford their own motor vehicles. Ultimately, this growing demand for motor vehicles means
that more bikes will be sold, and the automotive industry will become even more profitable
for its participants. This is the result of Growing Disposable Incomes

There's no doubt that, from a sociocultural perspective, the popularity of riding and the biking
culture is growing. It's becoming commonplace for individuals around the world to own one
or more motor cycle; in fact, owning one or more motor cycle is already the norm in
developed countries such as the United States, Canada, and much of the European Union.
Part of this is a cultural phenomenon: it's not like many of us can't get away with bicycles and
buses, but instead we choose to ride motor cycles simply because that's what is expected of
us. The biking culture is growing to a greater extent.

Indian customers are highly discerning, educated and well informed. They are price sensitive
and put a lot of emphasis on value for money and the biggest Technological shift impacting
the motor cycle industry is the advance of Electric bike technology. With some automotive
brand such as Hero, Bajaj, TVS already offering nearly completely autonomous motor cycles,
there is a huge change to the way we commute on the horizon. This isn't necessarily a good or
bad thing for the motorcycle industry, but it may mean that manufacturers of conventional
bikes have to change their business strategy to stay relevant. Electric Bikes are the
transformational development.

Aside from the advent of electric bikes, another big Technological advancement in the
automotive industry is, generally speaking, the safety of motor vehicles. It was only in the
1980s that wearing seat belts became a requirement; similarly, it took lower-end automotive
brands until the early 2000s to begin rolling out airbags across their models. Not only are
standards improving across the industry, but so is the underlying technology. Most recently,
automotive manufacturers have begun introducing emergency brake assist systems to their
vehicles, ABS, CBS Vehicle stability control in bikes vastly reducing the likelihood of front end
collisions.