CHAPTER I OVERVIEW OF THE INDUSTRY

The two-wheeler industry in India has grown rapidly in the country since the announcement of the process of liberalization in 1991 by the Finance Minister Dr.Manmohan Singh, now Prime Minister of India. India is the second largest producer and manufacturer of two-wheelers in the world. Indian two-wheeler industry has got spectacular growth in the last few years. Indian two-wheeler industry had a small beginning in the early 50's. The Automobile Products of India (API) started manufacturing scooters in the country. Bikes are a major segment of Indian two wheeler industry. Indian companies are among the largest two-wheeler manufacturers in the world. Hero Honda and Bajaj Auto are two of the Indian companies that top the list of world companies manufacturing twowheelers. The two-wheeler market was opened to foreign companies in the mid 1980s. The openness of Indian market to foreign companies lead to the arrival of new models of twowheelers into India. Easy availability of loans from the banks, relatively low rate of interest and the discount of prices offered by the dealers and manufacturers lead to the increasing demand for two-wheeler vehicles in India, this lead to the strong growth of Indian automobile industry. The two-wheeler segment has played an important role in giving a push to the automobile industry in India. An overview of the two wheeler industry makes clear that the two wheelers are among the most sought after automobiles in India for some time and the trend is likely to stay for a while. The economic growth, need for better conveyance and gradually.

Improving road infrastructure coupled with better credit and financing options, has acted as a major catalyst in encouraging the growth and development of the two-wheeler segment in India. Further, the new and improved features on the two wheelers, their stylish and trendy looks and a rage with the country's youth who form a substantial influence in determining the consumer behavior have ensured that the two wheelers remain on top of the automobile industry's agenda in India. Some of the features that deserve attention in respect of the Indian two wheeler segment are as mentioned: The total sale of two wheelers in India has touched a figure of 7.86 million units by March 2009. The production of two wheelers in India is expected to reach a staggering 17.85 million units by 2011-12, more than double of the current production level. India is likely to export 1.39 million two-wheelers in 2011-12 compared with 590,000 in 2006-07. Hero Honda, Bajaj Auto and TVS Motor remain the leading players in terms of sales and popularity of their two wheelers.

SIGNIFICANCE TO THE ECONOMY

India represents one of the largest two-wheeler markets in the world, with an estimated size of 5.4 million units a year. India is the two-wheeler capital of Asia with an average of 27 two wheelers per 1000 peoples to compare to china 8 two-wheeler per 1000 people. Driven by a slew of new launches and a galloping 8.1% Q1 GDP growth leading to higher disposable incomes, Hero Honda Motors, Bajaj Auto and TVS Motor, which together constitute over 86% of the domestic two-wheeler market, have reported an average growth rate of 20%.

INTRODUCTION TO THE COMPANY

Hero Honda Motors Limited, based in Delhi, India, is the world's third largest manufacturer of motorcycles after Honda and Yamaha. Hero Honda is a joint venture that began in 1984 between the Hero Group of India and Honda of Japan. It has been the world's biggest manufacturer of 2-wheeled motorized vehicles since 2001, when it produced 1.3 million motorbikes in a single year. During the fiscal year 2008-09, the company has sold 3.28 million bikes and the net profit of the company stood at Rs.1281.7 crore, up 32% from the previous fiscal year. Hero Honda's Splendor is the world's largest selling motorcycle. Hero is the brand name used by the Munjal brothers in the year 1956 with the flagship company Hero Cycles. The company introduced new generation motorcycles that set industry benchmarks for fuel thrift and low emission. A legendary 'Fill it - Shut it - Forget it' campaign captured the imagination of commuters across India, and Hero Honda sold millions of bikes purely on the commitment of increased mileage. Hero Honda values its relationship with customers. Its unique CRM initiative Hero Honda Passport Program, one of the largest programs of this kind in the world, has over 3 million members on its roster. The program has not only helped Hero Honda understand its customers and deliver value at different price points, but has also created a loyal community of brand ambassadors.

Type Founded

Public company BSE:HEROHONDA M January 19, 1984 in Gurgaon, Haryana, India

Headquarters New Delhi, India Key people Brijmohan Lal Munjal (chair and founder) Toshiaki Nakagawa (joint managing director) Pawan Munjal (CEO) Automotive Motorcycles, Scooters U$ 2.8 billion www.Herohonda.com

Industry Products Revenue Website

CORPORATE SOCIAL RESPONSIBILITY An Integrated Rural Development Centre has been set up on 40 acres of land

along the Delhi-Jaipur Highway. The Centre-complete with wide approach roads, clean water, and education facilities for both adults and children-now nurtures a vibrant, educated and healthy community. Some of the other social responsibilities are Raman Munjal Memorial Hospital The Raman Munjal Sports Complex Vocational Training Centre Adult Literacy Mission Marriage of Underprivileged Girls Rural Health Care

PUBLIC RELATION PROGRAMMES

RIDE EDUCATION TIPS Pre Ride Inspection The customers should conduct pre-ride inspection before riding a two wheeler to enhance safety and riding comfort. Clean the two-wheeler body surface regularly to maintain the surface finish. Use specifically designed cleaning products only. Inspect customer motorcycle before start the engine. The items listed here will only take few minutes, and in the long run they can save time, expense, and possibly the customers life. Listed below are some of the few of the Tips to follow: 1. ENGINE OIL LEVEL 2. FUEL LEVEL 3. FRONT AND REAR BRAKES (DRUM TYPE) 4. TYRES 5. CLUTCH 6. DRIVE CHAIN 7. LIGHTS AND HORN: Check if the headlight, tail /stop light, turn signals, indicators and horn function properly. 8. REAR VIEW MIRROR: Ensure that the rear view mirror gives a good rear view when the customers are sitting on the motorcycle. 9. BATTERY RIDE SAFE THE HERO HONDA WAY

The Company goal is not only to sell bike, but to also help the customer every step of the way in making the right decisions. Assisting the customer in making the right judgments on the road, and helping them to choose the right helmet and other riding equipment that can not only help save your skin but possibly your life! As bike handling requires know-how, skill and rigorous mental conditioning, they have put together certain safety tips and suggestions that will enhance the customer riding comfort. Always remember - a good rider is a safe rider. BE A HERO HONDA GOOD RIDER As a socially responsible company the company urges the customer to join us in making this world a safer, healthier and more environment friendly place. The company likes to promote the three Es. 1. Engineering which is the right technology, specifically designed for Indian customer requirements, and road conditions. 2. Environment which is about ensuring that the high technology 4-stroke Hero Honda motorcycles continue to meet the most stringent pollution control norms at every level as they have since the very beginning. 3. Education which is about promoting comfortable and safe driving, through a wide dealer network and service centers; as well as in educating people on road safety, in association with the traffic police and the transport department. It is as part of the Hero Honda family that We Care to drive home the message of Road Safety and a Healthy Environment. Good riding practices will keep you healthy. Taking good care of bike will always keep your bike healthy. Here are simple steps to a healthy bike, healthy environment, and a healthy the entire customer:

Health and Environment Safety Facts and Information 6

Social Responsibility

CHAPTER 2 PROFILE OF GEM MOTORS

Gem Motors is the 3rd Hero Hondo Outlet in Coimbatore in the year 2000.It handles Hero Honda Motor Cycle Sales, Service and Safety. GEM Motors is functioning form in its own building, suited in 1672, Trichi road Coimbatore. It was started in the year of 2000. Total number of employees in the company is around 80. The three partners are Mr.Ravichandran, Mr.Raviselvam, and Mr.Manoharan. More than 8 years satisfaction of the customer the company proceeds with good sales and services to our customer successfully. COMPANY PROFILE Company Name : GEM Motors 1672, Trichi Road, Coimbatore- 641045. Managing Director : Mr. Ravichandran Managing Partner : Mr.Ravi Selvan, Mr. Manoharan. Bankers : Induslnd Bank, Fulltron cr.ltd, HDFC Finance.

MISSION GEM Motors mission is to strive for synergy between technology, systems and

human resources, to produce products and services that meet the quality, performance and price aspirations of its customers. At the same time maintain the highest standards of ethics and social responsibilities. Mutually beneficial relationship with all its stake holders. VISION GEM Motors vision is to build long lasting relationship with everyone (Customers, Workers & Vendors).

GROWTH Hero Honda experienced great growth throughout its early days. The Munjal family started a modest business of bicycle components. By 2002 Hero Group had sold 86 million bicycles producing 16000 bicycles a day. Now Hero Honda has an assembly line of nine different models of motorcycles available. It holds the record for most popular bike in the world by sales is Splendor model. Hero Honda Motors Limited was established in joint venture with Honda Motors of Japan in 1984, to manufacture motorcycles. It is currently the largest producer of Two Wheelers in the world. It sold 3 million bikes in the year 2005-2006. Recently it has also entered in scooter manufacturing, with its model PLEASURE mainly aimed at girls. HUNK is the latest offering from the HHML stable. KEY POLICIES

Hero Honda goal is not only to sell bike to a customer, but also to help customer in every step of the way in making your world a better place to live in. Besides its will to provide a high-quality service to all of its customers.

Hero Honda has been strongly committed not only to environmental conservation programmes but also expresses the increasingly inseparable balance between the economic concerns and the environmental and social issues faced by a business. A business must not grow at the expense of mankind and man's future but rather must serve mankind. "We must do something for the community from whose land we generate our wealth." A famous quote from the Worthy Chairman of Hero Honda Group Mr.Brijmohan Lall Munjal. ENVIRONMENT POLICY Hero Honda committed to demonstrate excellence in our environmental performance on a continual basis, as an intrinsic element of their corporate philosophy.

To achieve this the company commit to:

Integrate environmental attributes and cleaner production in all business processes and practices with specific consideration to substitution of hazardous chemicals, where viable and strengthen the greening of supply chain.

Continue product innovations to improve environmental compatibility. Institutionalize resource conservation, in particular, in the areas of oil, water, electrical energy, paints and chemicals.

Enhance environmental awareness of their employees and dealers / vendors, while promoting their involvement in ensuring sound environmental management. 9

 QUALITY POLICY Excellence in quality is the core value of Hero Honda's philosophy. They are committed at all levels to achieve high quality in whatever the company do, particularly in their products and services which will meet and exceed customer's growing aspirations through:

Innovation in products, processes and services. Continuous improvement in our total quality management systems. Teamwork and responsibility

SAFETY POLICY Hero Honda is committed to safety and health of its employees and other persons who may be affected by its operations. The Company believes that the safe work practices lead to better business performance, motivated workforce and higher productivity.

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ORGANISATION CHART
MANAGING DIRECTOR

GENERAL MANAGER

Purchase Department

Sales Department Marketing Department

Passport Department Finance Department

Service Department Stock Department

Accounts Department

Network Manager

Branch Manager

Finance Manager

Assistant Manager

Stock Manager

Assistant Sales Manager

Assistant Sales Manager

Floor Supervisor

Insurance Claim Supervisor

Team Leader

Team Leader

Mechanic

Mechanic

Sales Executive

Sales Executive

Sales Executive 11

Sales Executive

PRODUCT PROFILE
BIKES: Hero Honda CD Dawn Hero Honda CD Delux Hero Honda CD Delux (self) Hero Honda Splender NXG Hero Honda Splender NXG(self) Hero Honda Splender plus Hero Honda Passion plus Hero Honda Passion PRO(self) Hero Honda Glamour (self) Hero Honda Glamour-FI Hero Honda CBZ Extreme Hero Honda Hunk Hero Honda Karizma Hero Honda Pleasure Scooter

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HERO HONDA PASSION PLUS

Engine Displacement Max. Power Gear Box Clutch Max. Speed Frame Suspension (Front) Suspension (Rear ) Tyre Size (Front) Tyre Size (Rear ) Brakes (Front) Brakes (Rear) Final Drive Battery Ignition Starting Wheelbase

4-stroke, Single Cylinder, Air - Cooled OHC 97.2 cc 7.5 Ps at 8000 rpm 4 Speed Constant Mesh Multi-Plate Wet Type 85 Kmph. Tubular Double Cradle Telescopic Hydraulic Fork Swing Arm with 5 step adjustable hydraulic damper. 2.75 * 18- 4 PR /42 P 3.00*18-4/6 PR (130mm)/ Hydraulic Disc Type (Optional) Internal Expanding Shoes Type (130 mm) Roller Chain 12 V-2.5 Ah Electronic CDI Kick Starter 1235 mm HERO HONDA ACHIEVER

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Engine / Transmission Engine Displacement Max. Power Top Speed Acceleration Gears Tyre Tyre Size (Front) Tyre Size (Rear) Electricals Head light Brakes Brakes (Front) Brakes (Rear) Features Kerb Weight Colours Available 134 Kgs Red, Maroon, Yellow, Blue, Tahitian Blue, Black with Golden strip, Black with Grey strip, Silver, Violet Drum / Disc Drum Halogen Bulb 35 W / 35 W (Multi Reflector) 2.75 * 18- 42 P /4 PR 3.00*18-52 P/6 PR 4 Stroke, Single Cylinder, Air Cooled, 149.1cc 10 KW (13.4 Bhp) 101 kmph 0-60 in (5 seconds) 5 Gears

HERO HONDA SUPER SPLENDOR

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Specifications Engine / Transmission Engine Bore x Stroke Displacement Compression Ratio Max Power Torque Max Speed Clutch Final Drive Electricals Ignition Advanced Micro Processor Ignition system Head Light Starting Tyres Front Rear Brakes Front Drum Type Front Disc Type Rear Suspension Front Rear Dimensions Dimensions (LXWXH) 1995 X 735 X 1095 mm Telescopic Hydraulic Fork Swing Arm with Hydraulic Shock Absorbers Internal Expanding Type - 130 mm Dia Hydraulic Disc Type - 215 mm Dia (Optional Internal Expanding Type - 130 mm Dia 2.75 X 18 - 4 PR / 42P 2.75 X 18 - 6 PR / 48P 12V 35W Multi Reflector Halogen Bulb - AC Type Kick StartSelf Start (Optional) Digital - CDI Ignition (AMI) 4-Stroke OHC, Single Cylinder, Air Cooled 52.4 x 57.8 mm 124.7 cc 9.1: 1 6.72 Kw (9 BHP) @ 7000 rpm 10.35 Nm @ 4000 rpm 90 Kmph 4 - Speed Constant Mesh Roller Chain

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Wheel Base Ground Clearance Kerb Weight Frame Fuel Tank Capacity Colours Available

1265 mm 150 mm 117 Kg (Kick Version) 121 Kg (Self Version) Tubular Double Cradle 12 Ltrs. (Min) Black, Silver, Red, Blue, Maroon

HERO HONDA DAWN

Engine Cubic Capacity Max. Power Gear Box Ignition Front Brakes Rear Brakes Front Tyre

4 Stroke, Single Cylinder, Air Cooled 97.2cc 7.4 BHP @ 8000rpm 4 Speed CDI 130mm Drum 110mm Drum 2.75 X 18

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Rear Tyre Wheelbase Ground Clearance Dry Weight Tank Capacity

3.00 X 18 1230mm 160mm 114 Kg 10.5 Litres

HERO HONDA SUPER SPLENDOR

Specifications Engine / Transmission Engine Bore x Stroke Displacement Compression Ratio Max Power Torque Max Speed Clutch Final Drive Electricals 4-Stroke OHC, Single Cylinder, Air Cooled 52.4 x 57.8 mm 124.7 cc 9.1: 1 6.72 Kw (9 BHP) @ 7000 rpm 10.35 Nm @ 4000 rpm 90 Kmph 4 - Speed Constant Mesh Roller Chain

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Ignition Advanced Micro Processor Ignition system Head Light Starting Tyres Front Rear Brakes Front Drum Type Front Disc Type Rear Suspension Front Rear Dimensions Dimensions (LXWXH) Wheel Base Ground Clearance Kerb Weight Frame Fuel Tank Capacity Colours Available

Digital - CDI Ignition (AMI)

12V 35W Multi Reflector Halogen Bulb - AC Type Kick StartSelf Start (Optional) 2.75 X 18 - 4 PR / 42P 2.75 X 18 - 6 PR / 48P Internal Expanding Type - 130 mm Dia Hydraulic Disc Type - 215 mm Dia (Optional Internal Expanding Type - 130 mm Dia Telescopic Hydraulic Fork Swing Arm with Hydraulic Shock Absorbers 1995 X 735 X 1095 mm 1265 mm 150 mm 117 Kg (Kick Version) 121 Kg (Self Version) Tubular Double Cradle 12 Ltrs. (Min) Black, Silver, Red, Blue, Maroon

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CHAPTER 3 FUNCTIONAL DEPARTMENTS

PURCHASE DEPARTMENT The Purchase Department is engaged in the activity of making the order for stocks when the stock level reaches its minimum level. The stocks will be dispatched from the Hero Honda Head office either through truck or train. When the stock is sent through truck then it takes a maximum of 9 days to reach Gem Motors and when it is sent through train it takes a maximum of 20 days. In the process of executing the purchase order, a Purchase Invoice will be executed in which the engine number and the chase number will be checked upon. Once the stock is dispatched from the Head Office, GEM Motors can get the updates relating to quantity of stock dispatched, the time, the mode, the vehicle details and all other details from the company website using the net. Functions Buy a Bikes, Spares and Genuine parts from the Head Office Receive Invoice form and payments made to the Head Office Payment is done through HDFC & ICICI Bank Negotiate the delivery dates and other terms and conditions Send the copy of purchase order to the respective departmental heads and service managers.

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SALES DEPARTMENT The sales department is the most important department since it is the department which forms a link between the company and the customer. The business activity starts with this department by the sale of automobile and the relationship with the customer goes on forever by means of after sales service. The sales figure for the last year(2008 - 09) was 5424 bikes and the sales has seen a decline since the sales for the previous year(2007 - 08) was 6535 bikes. The average sales of bikes till the month of May is around 400 500 bikes. The reason for this slowdown in sales has been due to the recession and the global meltdown. PROCESS OF SALE: Reception Enquiry Interaction with the Sales Executives Demo - Vehicle Specification Price Details Test Ride Mode of Payment - Cash/Finance Arrangement Filling of Enquiry Form Filling of Booking form Selection of Model Registration 20

Delivery

RECEPTION ENQUIRY: The first step in the process of sale of an automobile begins at the reception desk. Here the receptionist gets to know the basic details from the customers and directs them to the concerned sales executives for the further dealings. INTERACTION WITH THE SALES EXECUTIVES: The Sales Executive interacts with the customers and tries to understand the needs and the requirements of the customers and then he provides them details accordingly. It is this interaction that the sales executives use as a first step in the process of creating a strong desire in the minds of the customers to buy. DEMO VEHICLE SPECIFICATION: To further create a strong impression and to smooth the progress of the buying decision of the customer, the sales executives give a clear demo of the product detailing all the technical aspects and other specifications of the product, which in turn gives a clear idea about the different bike specifications PRICE DETAILS: The final aspect that determines the buying decision of the customer is the price of the automobiles. The sales executives has to first know the price range acceptable to the customers and show those bikes that exclusively fit the price range of the customers. The price of the bikes ranges from (lowest price) to (highest price). TEST RIDE: This is merely an outcome of how effective the sales executive had been in the process of creating the desire. If the customers are very much convinced then the go

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ahead with the next step of going for a test ride of the automobile as the case may be and experience the pleasure of driving the vehicle.

MODE OF PAYMENT CASH/FINANCE ARRANGEMENT: Once the customers decide upon the vehicle to be purchased then the next aspect that is to be considered is the mode of payment, whether cash payment or loan option. Based on the mode chosen by the customers, the sales executives have to make the necessary arrangements. The executives should detail about the loan arrangements undertaken by them, the financial institutions with which they have tie up, the formalities and procedures to be complied with and the documents to be submitted by the customers FILLING OF ENQUIRY FORM: The customer is then given an enquiry form and asked to fill in the required details. FILLING OF BOOKING FORM: After the enquiry form, the customer is to fill the booking form, which is yet another confirmation of the purchase that is to be made by the customers. In this booking form the customer has to provide information about the model to be purchased, the colour, and all other information related to the automobile. SELECTION OF MODEL: Of the various models available the customer has to decide and then select the model which suits his specification. REGISTRATION:

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Once the model is selected the customer has to comply with the legal procedure of registering the vehicle and generally this facility is also facilitated by the Automobile dealers.

DELIVERY: The registered vehicle is then handed over to the customers with all the procedures being completed. The mode and the time of delivery will all be carried out as stated by the customers. SALES PERFORMANCE HERO HONDA REPORTS LEADERSHIP PERFORMANCE WITH 50 % NET PROFIT IN Q2, '08-09
DEFIES INDUSTRY TREND WITH TURNOVER (NET SALES & OTHER OPERATING INCOME), AT RS. 3202 CRORE; EBIDTA AT 13.58 PER CENT

Aug'06 Total Sales

Aug'07

FY 06-07 12,82,860

FY 07-08 12,63,254

2,15,076 2,40,875

Total turnover(Net sales & Other Operating income)Rs 3202 crores, growth of 35.6 per cent Net profit after tax at Rs 306.30 crores, growth of 50 per cent EBIDTA margin for the quarter 13.58 per cent Total sales for Q2 stands at 9,72,095 units, growth of 28.5 per cent Total sales for H1 stands at 18,66,349, growth of 19.7 per cent Over 55 per cent share in domestic motorcycle market Launches first-of-its kind music video to celebrate 25 years of Hero Honda

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PASSPORT DEPARTMENT Hero Honda values its relationship with customers. Its unique CRM initiative Hero Honda Passport Program, one of the largest programs of this kind in the world, has over 3 million members on its roster. The program has not only helped Hero Honda understand its customers and deliver value at different price points, but has also created a loyal community of brand ambassadors. This is one of unique facility provided by Hero Honda to provide additional facilities and to honor the long standing customers of the company. This is a distinguishing feature of Hero Honda as it is provided by no other automobile company. GEM Motors has a customer membership of 20,000 people in its passport department. HERO HONDA PASSPORT PROGRAMME The Hero Honda Passport Programme is a Customer Relationship Programme instituted specially for the customers. It gives a chance to understand and serve customers better. Upon enrolling for the programme, customer obtain a Hero Honda Passport, which entitles customer to a host of benefits, privileges and exclusive rewards. Customer also become eligible for the Hero Honda Winners of the Month, which could win customer a Hero Honda Splendor+, or a cash prize of Rs.40000! HERO HONDA PASSPORT The Hero Honda Passport is a personal identification document that would carry details such as customer photograph, name, address and signature.

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This document certifies customer membership to the Hero Honda Passport Programme. The Hero Honda Passport opens the door to a host of special offers that Hero Honda Motors Limited has in store for customer including attractive gifts, special invitations and discounts. The Hero Honda Passport is valid for a period for 3 years.

ELIGIBLE FOR THE HERO HONDA PASSWORD Any Hero Honda motorcycle owner or user is eligible for the Hero Honda

Passport. However, it is the actual user of the motorcycle, who derives maximum benefits from it. HOW TO APPLY FOR THE HERO HONDA PASSPORT Fill-in the Hero Honda Passport Application Form available at all Hero Honda authorized dealerships/workshops. Pay requisite enrolment fee, and attach two passport-sized photographs with the application form. Customers personalized Hero Honda Passport will be processed and delivered to customer by their dealer, within 4 weeks of applying. BENEFITS OF OWNING A HERO HONDA PASSPORT

Some of the Benefits are Instant Benefits

A one-year or three-year Free Accident Insurance cover worth Rs.1 lakh. Opportunity to participate in a national draw and win Rs.40000 in cash or Splendor+.

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Bike Related Benefits

Attractive gifts on reaching specific milestones. A Special gift on customer first transaction with Hero Honda dealership or an authorized service centre.

Opportunity to get a Bike service Certificate that may increase the resale value of their bike. A special 5% discount on the purchase of spares. Lifestyle Related Benefits

Chance to be invited to events such as movie shows, musical nights and carnivals. Exclusive discount offers from other brands of customer interest. Regular information through the Suhana Safar newsletter. PROCEDURE TO USE THE HERO HONDA PASSPORT Customer need to carry their Hero Honda Passport with them whenever they visit a Hero Honda authorized dealership/workshop. Every time customer do a transaction at a Hero Honda showroom/workshop, the dealer would reward points in to their Passport. Customers are eligible to accumulate points, against purchase of spares, accessories, service and by referring friends to purchase a Hero Honda motorcycle. Customer can win several gifts as their accumulate points swiftly. Also, customer points do not become zero after a gift collection and can keep collecting gifts as they reach a particular milestone.

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INSURANCE DEPARTMENT GEM Motors operates a separate Insurance department to assist the customers with all the Insurance formalities related to the bike. The Insurance Premium is to be paid every year and hence has to renewed every year by paying the required premium amount.The insurance activities of GEM Motors is entrusted to the National Insurance. Two-wheeler insurance policy is governed by the Indian Motor Tariff. Personal accident cover The motor insurance provides compulsory personal accident cover of Rs. 1 lakh for individual owner driver of the vehicle insured while traveling on, mounting or dismounting from the vehicle. Loss or damage to the vehicle The policy covers also against any loss or damage caused to the vehicle due to the following natural and man-made calamities. Natural Calamities - Fire, explosion, self-ignition or lightning, earthquake, flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost, landslide, rockslide.

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Man-made Calamities - Burglary, theft, riot, strike, malicious act, accident by external means, terrorist activity, any damage in transit by road, rail, inland waterway, lift, elevator or air.

Third party legal liability This protects against legal liability arising due to accidental damages for Any permanent injury/ death of a person. & Any damage caused to the property.

Sum insured The vehicles are insured at a fixed value called the Insureds Declared Value (IDV). IDV is calculated on the basis of the manufacturers listed selling price of the vehicle (plus the listed price of any accessories) after deducting the depreciation for every year as per the schedule provided by the Indian Motor Tariff. If the price of any electrical and / or electronic item installed in the vehicle is not included in the manufacturers listed selling price, then the actual value (after depreciation) of this item can be added to the sum insured over and above the IDV. Under this policy, you are not covered against: Normal wear, tear and general aging of the vehicle Depreciation or any consequential loss Mechanical/ electrical breakdown Wear and tear of consumables like tyres and tubes Vehicle being used otherwise than in accordance with limitations as to use Damage to/ by a person driving the vehicle without a valid license Damage to/ by a person driving the vehicle under the influence of drugs or liquor Loss/ damage due to war, mutiny or nuclear risk

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ACCOUNTS DEPARTMENT The accounts Department is headed by the Cashier and in entrusted with all the accounting activities of the business. The books of accounts are maintained. The accounts department is computerized and they use software packages to carry out the accounting work. One of the accounting packages used is Tally 7.2 and hence the accounting statements are maintained with high accuracy. To ensure correctness and fairness of the accounting details, the concerned internal auditors are auditing the books of accounts every 2 months.

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STOCK DEPARTMENT The stock department is concerned with maintaining the required amount of stocks to ensure uninterrupted flow of sales. The stock department has a minimum and a maximum stock level, which ensures that there in no under stocking or over stocking. The minimum stock level maintained by Gem Motors is 250. Every month the stock is replenished by making a purchase to the extent of 650. The monthly target for sales set by Gem Motors ranges between a minimum of 550 and a maximum of 700. The purchase activity has been at a slightly slower pace in the month of may for Gem Motors. It had made a purchase of only 350 stocks as against a usual 650 as the sales has been quite slow due to recession. When the stocks that are being sent from the Head Office is damaged, then the person concerned with stock keeping takes a picture of the damaged part and sends it to the Head Office. Then the Head Office will send their representative to do a survey of the vehicle and when approved by this person, the damage part will be sent back to the Head Office for replacement. COMPETITORS: The major competitor of Gem Motors is Suguna North & Suguna South.

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SUB DEALERS: The Gem Motors is extending its sales activity through its Sub dealers who are referred to as the Authorized Representative Dealers (ARD). Its Authorized Representative Dealers are Millennium Motors, Surya Auto Service and Annai Auto Service and are given a target of 50 each. The Gem Motors has a separate service point which carries out all the servicing activities and this activity is entrusted to KVS Auto Agency. The spare parts will all be acquired from the Hero Honda Head office.

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MARKETING DEPARTMENT The GEM Motors has well-developed marketing department and the main activity undertaken is Advertising. It uses various forms of advertising like boards, banners, leaflets and it also adopts the float mechanism, in which the vehicle is taken for a round in the van around the city to create awareness and to enable people to have a look at the vehicle. It also uses TV in which the ads are displayed as scrolls in the lower part of the screen. They in which they follow also undertake tele Marketing up is 4 times. The advertisement expenses come to around 50,000. The company has a tie up with the Deer Printing and AD Vision companies for all the printing activities relating to banners, boards and leaflets.

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HUMAN RESOURSE DEPARTMENT The people are selected through the normal recruiting process and every member selected is given training for 1 month along with a stipend of Rs.3500. Every sales person has given a target of 100 vehicles and if the person is able to sell above the prescribed target of 100 then he gets Rs.50 as incentive for every extra vehicle sold. And when the sales person sells any of the premium segment vehicles having 150cc like Hunk or Karizma, then he Rs.250 as incentive for each vehicle sold. The incentives act as motivational factors for the employees to perform better. On other basis, the employees are given various benefits. One such benefit is, when the employee meets with a accident in the course of his employment, then the employee will be provided salary for the period he is been hospitalized and his medical expenses will be taken care by providing advance to the extent of Rs.10,000. This advance will be deducted from his salary in equal monthly installments of Rs.500 or Rs.1000 as the case may be. The personnel department is entrusted with the task of managing the Human Resource of the company. All the decision relating to the employees, recruitment, training, holidays, the duties and the responsibilities of the employees, the benefits to be provided them are all decided by the Personnel Department. The different Category of employees in the personnel Department are assigned various jobs according to their designation and thus the duties and responsibilities all differ accordingly. The staffs are entitled only to government holidays, whereas the employees under the service category are entitled to only half-day leave every week.

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RESPONSIBILITIES: To achieve Customer Satisfaction. To develop long-standing relationship with the customers. To address the problems of customers immediately and to provide them with proper solutions. DISADVANTAGES OF EMPLOYEE WORKINGS: Fixed working timings Get a break only for one day in a month.

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SERVICE & MAINTAINANCE DEPARTMENT The service is one of the main departments as it is concerned with providing better and additional service to the customers. This department is aimed at providing exclusive service, which ensures satisfaction of the customers and ultimately results in achieving customer loyalty. The service is provided by two means free service and paid service. WARRANTY POLICY Scope of Warranty Hero Honda Motors Limited warrants all its twowheelers manufactured /assembled in Dharuhera, Gurgaon and Haridwar Plants, distributed in India and sold through its Authorised dealers to be free, under normal use and condition, from any defect both in material and workmanship, subject to the following terms and conditions. Terms and Conditions 1. All Hero Honda two-wheelers are warranted for a certain period specified in terms of time and kms from the date of purchase, whichever term gets satisfied earlier. 2. It is mandatory for the customer to avail all free and paid services as per the recommended schedule to be eligible for the warranty benefits. 3. If a defect is observed in any Hero Honda two-wheeler, Hero Honda's only obligation/liability is to repair or replace those parts which is/are considered to be the cause of malfunction free of charge of both labour and material, when Hero Honda acknowledges that such malfunction has not come out of misuse or 35

improper handling etc. such defective two-wheeler should be brought to the nearest Hero Honda dealer/authorised service centre by the owner for necessary inspection and subsequent repairs.

Limitations of Warranty

The warranty shall not apply:

If any of the free services or subsequent paid service is not availed as per the recommended service schedule given in the owner's manual. To normal wear and tear components like bulbs, electrical wiring, filters, spark plugs, clutch plates, brake shoes, fasteners, shims, washers, oil seals, gaskets, rubber parts, plastic components, chain and sprockets and in case of wheel rim misalignment or bend.

If there is any damage due to modification or fitting of accessories other than the ones recommended by Hero Honda. If the two-wheeler has been used in any competitive events like track races. If there is any damage to the painted surface due to industrial pollution or other extraneous factors. If there is any damaged caused due to usage of improper oil/grease, non genuine parts. For maintenance repairs required due to misuse while driving or due to adulteration of oil, petrol or due to bad road conditions. For consumables like oil, grease etc. used during free services or used during warranty repairs. If any part of the vehicle is repaired by unauthorized persons/workshops etc. Warranty on Proprietary Items Warranty on proprietary items like tyres, tubes & battery etc. will be directly

handled by the respective Original Equipment Manufacturers (OEMs).

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SERVICE & MAINTENANCE SCHEDULE The company constant Endeavour is to support the company's mandate of providing highest level of customer satisfaction by taking good care of their two-wheeler service and maintenance through the company vast network of more than 2100 committed Dealers and Service outlets spread across the country. Having two-wheeler serviced at an authorised workshop ensures highest standards of service quality and reliability. FREE SERVICE The free service can be availed for 6 times but all this 6 services have to availed within at time span of 1 year, after the period for free service is over. The period at which the vehicle is to serviced is determined on the basis of the kilometers the vehicle is run. The various service points on the basis of the kilometers run is as follows: First Service Second Service 500 to 700 2500 to 2700 Oil service will also be rendered No oil service

Third Service 5000 to 5500 Oil service Fourth Service 7000 to 7500 No oil service Fifth Service 9000 to 9500 Oil service Sixth Service 11000 to11500 No oil service The free service can be availed 2 months once if the required kilometers are run. PAID SERVICE

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After the period of free service is over, then any service that is been availed will be paid service only. The company follows Tele Marketing in which the customers will be called 2 months once and will be given a Service Reminder. After the service is been rendered, the feedback of the customers as to the service rendered will be got through telephones. If in case of accidents, the customers can get insurance facility for which the damage has to be determined. In the process of determining the value of damage, 80% will be considered as depreciation for the metal parts and 50% depreciation for the plastic items and thus the value will be arrived after adjusting for depreciation. The Engines has a warranty for a period of 2 years. Service Schedule Hero Honda offers free services on all its two-wheelers. The customer should avail these services within the stipulated conditions of time period or km range, whichever condition gets satisfied earlier from the date of purchase. After the completion of free services or its validity period must continue availing paid services as per the recommended service schedule. Maintenance Schedule Proper care and maintenance are paramount for trouble free operation and optimum performance of their two-wheeler.

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FINANCE DEPARTMENT The fund transfer facility is carried out through the two major banks HDFC & ICICI. As far the payment is concerned, the dealers have to make the payment within 15 days from the date on which the vehicles are being dispatched from the Head Office. If a delay is made in payment, then the dealers will be charged interest at a rate of 2 to 3% as the case may be. The truck can carry up to a maximum of 55 vehicles or up to a value of Rs.18,00,000 whichever is higher. A constant check will be made over the payment matters and if there is any delay then the necessary corrective measures will be taken. LOAN FACILITY

When the customers cannot make cash payment, then they will be provided with Loan facility and the payment will be made in Installments, which is referred to as Equal Monthly Installments (EMI). When the payment is made through cheque, then it will be processed through the Electronic Clearing Service. To avail the Loan facility the following documents are required: Address Proof Identity Proof Photos Cheque Leaf EB Bill if own house Gas bill- if rented house Past 3 months Bank statement

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Generally 70% of the total vehicle amount can be availed as loan. But in certain cases when the person is of high credit worthiness then the loan can be availed to the extent of 85% of the amount.

CASH PURCHASE

If the vehicle is purchased on a cash basis, then not much formality are involved. The customers will have to make the payment along with the following documents: Address Proof 4 Photos Customer Signature PAST 5 YEAR PERFORMANCE

As can be seen from the table below, the company the sales as well as the profits have increased enormously. The company net sale has shown a CAGR of 27% and net profits have shown a CAGR of 39% led by its motorcycle led dominance. The operating margin of the company has improved by 290 basis point to 16.8%.
(Rs m) Motor Cycles sold (m) Net sales Other income Total revenues Operating profit Depreciation PBIT Interest PBT Extraordinary Items Tax Net Profit Operating profit margin Net profit margin Number of shares (m) FY00 0.76 FY01 1.03 FY02 1.43 FY03 1.68 FY04 2.07 58,324 1,681 60,005 9,801 733 9,068 17 10,732 (7) 3,441 7,283 16.8% 12.5% 199.7

22,464 31,687 44,654 51,017 204 221 767 956

22,668 31,907 45,422 51,973 3,070 347 2,724 47 2,880 -34 925 4,285 443 3,843 25 4,038 -268 1,301 6,807 510 6,297 15 7,049 -105 2,315 8,636 580 8,056 17 8,995 (149) 3,038

1,921 2,469 4,629 5,808 13.7% 13.5% 15.2% 16.9% 8.6% 39.9 7.8% 10.4% 11.4% 199.7 199.7 199.7

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Face Value (Rs) DPS (Rs) EPS (Rs) Fully Diluted EPS (Rs)

10.0 10.0 48.1 9.6

2.0 3.0 12.4 12.4

2.0 17.0 23.2 23.2

2.0 18.0 29.1 29.1

2.0 20.0 36.5 36.5

CHAPTER 4 SWOT ANALYSIS OF GEM MOTORS

Strengths Ability to understand customers needs and wants Recognized and established brand name Effective advertising capability

Weaknesses Shift in consumer preference. R&D is not close to the Hero manufacturing plant Hero is weak in the joint venture because Honda Motor Company has so much power

Opportunities Expansion of target market (include women) To become Indias leader in the scooter market

Threats Unavailability of spare parts & after sales service. Honda Motorcycles and Scooters India can take away market share and cause joint venture to go sour. Bajaj Motors is a strong competitor.

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CHAPTER 5 OBSERVATIONS & CONCLUSION

The company has established good Brand name and occupies dominant position in the market. It has a Strong Marketing Department. It has a Broad Local Knowledge, which helps to understand he needs of the customer. The Company frequently upgrades to latest Technology. IMPLEMENTING CHANGES Management introduced new ideas coupled with improved terms of agreement for their joint venture Two primary goals in mind of the company are Continuing their success & Maintaining their existing market. NEW TACTICS Establishing a more proactive marketing department Expanding the distribution network

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CONCLUSION
This summer internship training in GEM Motors was highly fruitful and all days of the training were very much interesting and I gained lot of practical focus. I have been engaged in many interesting works in various departments in the company. My experience there was very useful. They have lot of Department Functions in the company like Organization Structure, Administration activities, day-to-day activities, Sales Process, Accounting, Stock Details, Marketing etc. Finally I conclude that the period of study of the summer internship training taught me a lot.

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