INDUSTRY OVERVIEW

The Automotive Industry is a wide range of companies and organizations involved in

the design, development, manufacturing, marketing, and selling of motor vehicles.[1] It is one of the
world's most important economic sectors by revenue. The automotive industry does not include
industries dedicated to the maintenance of automobiles following delivery to the end-user, such
as automobile repair shops and motor fuel filling stations.
The term automotive was created from Greek autos (self), and Latin motives (of motion) to
represent any form of self-powered vehicle. This term was proposed by SAE member Elmer Sperry.

The automotive industry began in the 1890s with hundreds of manufacturers that pioneered
the horseless carriage. For many decades, the United States led the world in total automobile
production. In 1929 before the Great Depression, the world had 32,028,500 automobiles in use, and
the U.S. automobile industry produced over 90% of them. At that time the U.S. had one car per 4.87
persons.
After World War II, the U.S. produced about 75 percent of world's auto production. In 1980, the
U.S. was overtaken by Japan and became world's leader again in 1994. In 2006, Japan narrowly
passed the U.S. in production and held this rank until 2009, when China took the top spot with 13.8
million units. With 19.3 million units manufactured in 2012, China almost doubled the U.S.
production, with 10.3 million units, while Japan was in third place with 9.9 million units. [4] From
1970 (140 models) over 1998 (260 models) to 2012 (684 models), the number of automobile
models in the U.S. has grown exponentially.

COMPANY INFORMATION

Hero MotoCorp Limited is the Worlds single largest two-wheeler motorcycle company. The
company is engaged in the manufacture of two wheelers motorcycles and its parts. The company
has three manufacturing facilities namely Dharuhera, Gurgaon at Haryana and Haridwar at
Uttarakhand.
The company offers a range of bikes starting from CD Dawn, CD Deluxe, Splendor Plus, Splendor
NXG, Passion and Passion Pro. The 125 cubic centimeter segment offers Glamour, Super Splendor
and Glamour F1. It also has an offering called Achiever in 135 cubic centimeter segment. In the 150
cubic centimeter and above the company offers brands like Hunk, CBZ X-treme, Karizma and the
Karizma ZMR. It also offers a 100 cubic centimeter scooter, Pleasure.
Hero MotoCorp Limited was incorporated in the year 1984 with the name Hero Honda Motors Ltd.
The company was established as a joint venture company between Honda Motor Company of Japan
and Hero Group. In the year 1983, they signed a joint collaboration agreement and formed the
company. The joint venture between Indias Hero Group and Honda Motor Company, Japan has not
only created the worlds single largest two wheeler company but also one of the most successful
joint ventures worldwide.
In the year 1985, the company commenced their commercial production at Dharuhera plant in
Haryana and introduced their first motorcycle, CD 100 in the market. In the year 1989, they
launched the new motorcycle model, Sleek in the market and in the year 1991, they introduced new
motorcycle model, CD 100 SS in the market. In the year 1995, the company introduced their
extraordinary product, Splendor in the market.
In the year 1997, the company inaugurated their second manufacturing facility at Gurgaon in
Haryana. Also, they introduced new motorcycle model, Street in the market. In the year 1999, they
launched Hero Honda CBZ, the first 150cc motorcycle in the Indian two wheeler industry. In the
year 2001, the company introduced new models, Passion and Joy in the market. In the next year,
they introduced new models, Dawn and Ambition in the market.

HISTORY
Hero Honda started its operations in 1984 as a joint venture between Hero Cycles
(sometimes called Hero Group, not to be confused with the Hero Group food
company of Switzerland) of India and Honda of Japan. In 2010, when Honda decided
to move out of the joint venture, Hero Group bought the shares held by Honda.
Subsequently, in August 2011 the company was renamed Hero MotoCorp with a new
corporateidentity.
In June 2012, Hero MotoCorp approved a proposal to merge the investment arm of its
parent Hero Investment Pvt. Ltd. with the automaker. The decision comes 18 months
after its split from Hero Honda.
"Hero" is the brand name used by the Munjal brothers for their flagship company,
Hero Cycles Ltd. A joint venture between the Hero Group and Honda Motor
Company was established in 1984 as the Hero Honda Motors Limited at Dharuhera,
India. Munjal family and Honda group both owned 26% stake in the Company.
During the 1980s, the company introduced motorcycles that were popular in India for
their fuel economy and low cost. A popular advertising campaign based on the slogan
'Fill it Shut it Forget it' that emphasised the motorcycle's fuel efficiency helped the
company grow at a double-digit pace since inception. In 2001, the company became
the largest two-wheeler manufacturing company in India and globally. It maintains
global industry leadership to date. The technology in the bikes of Hero Motocorp
(earlier Hero Honda) for almost 26 years (19842010) has come from the Japanese
counterpart Honda.

COMPNAY PROFILE
Name of company
Type
Industry
Founded
Founder
Headquarters

Hero motor cop

Public company
Automotive
January 19, 1984
Dr. Brijmohan Lall Munjal
New Delhi, India
Dr. Brijmohan Lall Munjal
(Chairman Emeritus)

Key people
Pawan Munjal (Chairman, MD &
CEO)

VISION & MISSION

At Hero Motors, we are committed to give our best and achieve the highest standards
in Performance, Quality, Systems, Care and Relationships. And then we want to beat
these high standards and go furtherbecause anything that can be done can be done
better.

PRODUCTS AND SERVICES

Product Variety includes the types of product which a company produces. They may
before the same consumers or for different consumers. in other words , the different
products may satisfy similar needs or different needs for e.g. a company
manufacturing soap for both these product satisfy the same needs e.g. cleaning etc.
There for the company will have to all write its marketing strategy in order to reach
this segment of consumers. The product variety of Hero is as follows.

Sr. No.
1
2
3
4
5

PRODUCTS
CBZ
Passion Pro
Splender
Karizma
Impulse

KARIZMA
WHERE ONE JOURNEY ENDS ANOTHER STARTS.
Unleash the power - its not just a bike that stuns people with its looks. Its a mean
machine with an engine that throws a power of 19.2 BHP, capable of taking you
to every imaginable place.

SWOT AYNALYSIS

STRENGTHS

WEAKNESSES

1. Huge brand equity and one of the

biggest players in the two wheelers
Indian

market
in

every

segment

3. Excellent distribution, over 3000

dealerships

2.High imports for its spare parts i.e. over

30%imports

2. Excellent R&D, and wide variety of

products

1. Absence in the premium bike segment

and

service

3. Most of the products have similar

features

and

low

on

design

and

innovation

centres

4. Good advertising and excellent

rebranding from Hero Honda to Hero
Moto Corp

OPPORTUNITIES

THREATS

1.Two-wheeler segment is one of the 1. Strong competition from Indian as well

most

growing

industries as

international

brands

2.Export of bikes is limited i.e. untapped 2. Dependence on government policies

international markets

and

rising

fuel

prices

3. Better public transport will affect twowheeler sales

LITERATURE REVIEW
[1] A COMPARISON OF FINANCIAL PERFORMANCE OF COMMERCIAL
BANKS: SUVITA JHA

Abstract: The objective of this study was to compare the financial performance

of different ownership structured commercial banks in Nepal based on their

financial characteristics and identify the determinants of performance exposed by
the financial ratios, which were based on CAMEL Model. Eighteen commercial
banks for the period 2005 to 2010 were financially analyzed. In addition,
econometric model (multivariate regression analysis) by formulating two
regression models was used to estimate the impact of capital adequacy ratio, nonperforming loan ratio, interest expenses to total loan, net interest margin ratio and
credit to deposit ratio on the financial profitability namely return on assets and
return on equity of these banks. The results show that public sector banks are
significantly less efficient than their counterpart are; however domestic private
banks are equally efficient to foreign-owned (joint venture) banks.
[2] A STUDY ON FINANCIAL PERFORMANCE OF ASHOK LEYLAND
LIMITED AT CHENNAI
Abstract: Financial is regarded as the life blood of a business enterprise. In the

modern oriented economy, finance is one of the basic foundations of all kinds of
economics activities .Finance statements are prepared primary for decision
-making .They play a dominant role in setting the frame work and managerial
conclusion and can be drawn from these statements is of immense use in decisionmaking through analysis and interpretation of financial statements .As said earlier
finance is said to be life blood of any business Every business under taking needs
finance for its smooth working .it has to raise funds from the cheapest and risky
source to utilize this in most effective manner . So every company will be
interested in knowing its financial performance. The project entitled Financial
performance analysis of Ashok Leyland company Ltd '' throw light on overall
financial performance of the company .

[3] A COMPARATIVE STUDY OF FINANCIAL PERFORMANCE OF

SAIL AND TATA STEEL LTD
Abstract: Efficient management of finance is very important for the success of an
enterprise. Term financial performance is very dynamic term. The subject matter

of financial performance has been changing very rapidly. In present time greater
importance is given to financial performance. So, here an attempt is made by me
to compare the financial performance of the selected units i.e. Steel Authority of
India and TATA STEEL LTD. While analyzing the financial performance of the
selected units, we include the analysis of working capital and analysis of
profitability
A STUDY ON FINANCIAL PERFORMANCE ANALYSIS OF SPINNING
MILLS- S.SATHYA*, DR.R.UMARANI
ABSTRACT Financial Analysis is the process of identifying the financial
strengths and weaknesses of the firm by properly establishing relationships
between the items of the Balance Sheet and the Profit and Loss Account. The
project work is an outcome of A study on financial performance analysis of
spinning mills of Coimbatore city. The study was carried out for the period of
five years (2010-14) to analyze the financial performance of the company and the
5 companies are Lakshmi Mills, Bannari Amman Spinning Mill, Sri Ramakrishna
Spinning Mill, Kpr Spinning Mill and Super Spinning Mill are taken for study.
The research design of the study is descriptive research design and secondary data
was collected from the published websites of organization for the research. The
tools used for analysis is comparative ratio analysis of the balance sheet. Suitable
ratios were framed and calculated to know the financial performance of the
company. The findings from the analysis were discussed in detail and suggestions
for corrective actions like maintain good solvency in order to meet short term and
long term obligations were given wherever applicable.

EFFICIENCY RATIOS AND COMMUNITY BANK PERFORMANCE

ABSTRACT This study develops a multivariate discriminate model to
differentiate between low efficiency and high efficiency community banks (less
than $1 billion in total assets) based upon the efficiency ratio, a commonly used

financial performance measure that relates non-interest expenses to total operating

income. The model includes proxies for the banking regulatory CAMELS rating
variables including: the equity capital to total asset ratio, net charge-offs to loans,
salaries to average assets, return on average assets, the liquidity ratio and the one
year GAP ratio. The discriminate model is tested using data for 2006, 2007 and
2008. This includes periods of high performance as well as deteriorating industry
conditions associated with the current financial crisis. The models classification
accuracy ranges from approximately 88% to 96% for both original and crossvalidation datasets.

BACKGROUND OF STUDY

The word Performance is derived from the word parfourmen, which means to do,
to carry out or to render. It refers the act of performing; execution,

accomplishment, fulfilment, etc. In border sense, performance refers to the

accomplishment of a given task measured against preset standards of accuracy,
completeness, cost, and speed. In other words, it refers to the degree to which an
achievement is being or has been accomplished. In the words of Frich Kohlar The
performance is a general term applied to a part or to all the conducts of activities of an
organization over a period of time often with reference to past or projected cost
efficiency, management responsibility or accountability or the like. Thus, not just the
presentation, but the quality of results achieved refers to the performance.
Performance is used to indicate firms success, conditions, and compliance. Financial
performance refers to the act of performing financial activity. In broader sense,
financial performance refers to the degree to which financial objectives being or has
been accomplished. It is the process of measuring the results of a firm's policies and
operations in monetary terms. It is used to measure firm's overall financial health over
a given period of time and can also be used to compare similar firms across the same
industry or to compare industries or sectors in aggregation.

Financial analysts often assess firm's production and productivity performance,

profitability performance, liquidity performance, working capital performance, fixed
assets performance, fund flow performance and social performance. However in the
present study financial health of GSRTC is measured from the following perspectives:
1. Working capital Analysis
2. Financial structure Analysis

RESEARCH PRBOLEM
A research problem in general refers to some difficulty which a researcher experience
the context of either a theoretical or practical situation or wants to obtain a solution
for the same

Our research problem is the A STUDY ON FINANCIAL PERFOMANCE OF

HERO MOTO CROP LTD '' over the year.

RESEARCH OBJECTIVES
The objective of research is to discover answers to question through the application of
scientific procedures. The main ain of the research is to find out the truth which is

hidden

and

which

has

not

been

discovered

as

OTHER OBJECTIVE
* To find out financial performance of NAVNIT HERO MOTO CROP
* To study the position of the company with the help of the horizontal analysis
* To study the trend of the company's financial position.

yet.

RESEARCH METHODOLOGY
Methodology is the systematic, theoretical analysis of the methods applied to a field
of study. It comprises the theoretical analysis of the body of methods and principles
associated with a branch of knowledge.

Research design
The research design is the conceptual structure within which research is conducted; it
constitutes the blue print for the collection, measurement and analysis of data. The
research design provides the back bone structure of the study; it supports the study
and holds it together. The research design refers to the research overall plan for
answering the research question or testing the research hypotheses.
Research design is:

A framework for the research plan of action.

A master plan that specifies the methods and procedures for collecting and
analyzing the needed information.

A strategy for hoe the data will be collected

TYPES OF RESEARCH DESIGN

[1] Exploratory Research:-

Exploratory research is conducted to provide a better understanding of a situation. It

isnt designed to come up with final answers or decisions. Through exploratory
research, researchers hope to produce hypotheses about what is going on in a
situation. Explorative research studies are also termed as formulate research studies.
Provides insights into & comprehension of the problem situation confronting the
researcher. It is used when the problem is to be defined more precisely.
[2] Descriptive Research:Descriptive research is very common in business and other aspects of life. In fact,
most of the marketing research youve heard about or participated in can be
categorized as descriptive research. With a descriptive research design we are usually
trying to describe some group of people or other entities. A type of conclusive
research that has as its major objective the description of something usually market
characteristics or functions.
[3] Causal Research:Everyone is familiar with the general notion of causality, the idea that one thing leads
to the occurrence of another. The scientific notion of causality is quite complex,
however; scientists tell us that it is impossible to prove that one thing causes another.
In this research we are using a Descriptive Research Design.

SOURECES OF DATA
Collection of the data is an essential part of the whole project work, only the data
collection is not sufficient but to analyzed and interprets and presents them in
meaning full manner.
Primary research is defined as factual, firsthand accounts of the study written by a
person who was part of the study. The methods vary on how researchers run an
experiment or study, but it typically follows the scientific method. One way you can
think of primary research is that it is typically original research.
Secondary research is defined as an analysis and interpretation of primary research.
The method of writing secondary research is to collect primary research that is
relevant to a writing topic and interpret what the primary research found. For instance,
secondary research often takes the form of the results from two or more primary
research articles and explains what the two separate findings are telling us. Or, the
author may have a specific topic to write about and will find many pieces of primary
research and use them as information in their next article or textbook chapter.
In this research we use have Secondary sources of data to collecting
informations.

DATA COLLECTION METHOD

Data collection is the process of gathering and measuring information on variables of
interest, in an established systematic fashion that enables one to answer stated
research questions, test hypotheses, and evaluate outcomes.
We have used personal data of Navnit Hero motor crop ( financial statement)