Market Analysis of Two Wheeler Industry

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Submitted By bhavna
Words 343
Pages 2
Market Analysis of Two Wheeler Industry

Blockade Entry and Exit
The entry of competitors in two wheeler industry is limited as is case from the very few players in the two wheeler segment. Various reasons can be responsible for the same:
High Capital Investment- Huge initial capital investment in building, plant and equipment is required which acts as a deterrent for new players from entering the market. Also the existing players find it tough to leave the market as they have already invested a huge amount. Fixed Assets as per 2011 data | Hero MotoCorp | Bajaj | TVS | Yamaha | (in Rs. crores) | 4205.42 | 1552 | 982.78 | |

Customer loyalty - Large incumbent firms may have existing customers loyal to established products. The presence of established strong brands within a market can be a barrier to entry in this caseaphs .
Below Graphs show the demand & supply of the four major players for last two years:
Demand of four dominant players:

Supply of four dominant players:

We can see the demand and supply for the two-wheelers of the four dominant players has been on the rise. So the customers have broadly retained their loyalty to the brand.
Distributor agreements - Exclusive agreements with key distributors or retailers can make it difficult for other manufacturers to enter the industry.
Economy of scale - Large, experienced firms can generally produce goods at lower costs than small, inexperienced firms. So the new firms find it tough to make their space in the market and compete with the already established players. However, cost advantages can sometimes be quickly reversed by advances in technology.
The Dominant players in India in two wheeler segment as per 2011-2012 data: Thus we see the no. of players are very few due to restrained entry/exit.

Imperfect dissemination of Information
As is clear from the chart…...

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