Feb 24, 2011

6 Profits that Indian 2 Wheeler Makers made in 2010-11, Q3

So how much profit (after tax) did our "desi" two wheeler manufacturers make in the 3rd financial quarter (Oct-Dec) 2010-11..??

Everyone knows that Hero Honda is the "numero uno" in India when it comes to total sales of 2 wheelers. But more sales do not always mean the most profits.

As obvious from the data/graph posted below, it is Bajaj Auto which still remains the most profitable 2 wheeler maker of India even in Quarter 3 of the financial year 2010-11.

The profits of Hero Honda has in fact dipped 20% when compared to the same period of the previous financial year. On the other hand Bajaj Auto has registered an increase in 40% in terms of profitability over the same period.

TVS motor has too shown a two fold increase in its profits over the last financial year. But the overall profit of TVS still remains low when compared to the two Indian giants Hero Honda and Bajaj Auto Ltd.

Why is the profit of Bajaj higher than that of Hero Honda?

According to me the reasons for a higher profit margin for Bajaj Auto are:

    [1] The major contribution of sales for Bajaj Auto comes from the more profitable "Pulsar" & "Discover" branded motorcycles

    [2] Bajaj Auto is the highest exporter of 2 wheeler from India

    [3] Bajaj Auto also has a major presence in the 3 wheeler space

    [4] Lower expense in the form of TV Ads/Promotions compared to Hero Honda and TVS Motor


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This is to remind that the Views or Opinions in the blog are entirely mine unless explicitly stated. The Views and Opinions published in this blog should in no way be related to any other person or organization associated -- directly or indirectly -- with me.


Anonymous said...

Good Morning! Hero Honda brought the shares owned by HONDA this year! FYI

S.P - Biker Next Door said...

Good Afternoon,

Hero have not bought Honda shares from their pocket. They are "still" looking out for financial institutions to fund the deal.


S.P - Biker Next Door said...

@Anon above,

Read this: Hero Honda gets FIPB nod to raise Rs 4,500 cr for JV stake buy

Good Day

Anonymous said...

bajaj rocks!!!

Gunawan MS said...

Bajaj long term strategy has paid off quite handsomely for them, concentrating on the more profitable segment. It has gone synchronously with India's rising economy and income, allowing people to move up the ladder in choosing their 2 wheeler transportation, from mere dull commuters to a real performing & comforting sportbikes. Ofcourse, they have anticipated it further, by developing affordable small/city car for people who can afford it, which were getting aplenty in today's India.

Anil Anupam Mohanty said...

Some companies believe in figures and some in margin.
At the end of the both bajaj and hero honda(it still sells 1.5 times the bajaj) are making good money but with different strategies.
I believe both hero and bajaj are established players and will continue to be at each others neck for long.

As far as profit is concerned, I guess the higher segment produces more profit.
Bajaj shares lots of components with bikes in different categories, cost saving and good profit.
For example : speedo console. All pulsars carry the same console. Hero honda , even hunk and cbzx have different console inspite of being pretty similar.

Just an opinion though !

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