Copy and pasAutomobile is one of the largest industries in global market.

Being the leader in product and process technologies in the manufacturing sector, it has been recognized as one of the drivers of economic growth. During the last decade, well directed efforts ha ve been made to provide a new look to the automobile policy for realizing the sector's f ull potential for the economy. Aggressive marketing by the auto finance companies ha ve also played a significant role in boosting automobile demand, especially from th e population in the middle income group. A Nations economy is well known from its transport system. For instant and rapid growth in economy, a well-developed and well-networked transportation system is essential. As India's transport network is developing at a fast pace, Indian Aut omobile Industry is growing too. Also, the Automobile industry has strong backward and f orward linkages and hence provides employment to a large section of the population. Thu s the role of Automobile Industry is very essential in Indian economy. Various types o f vehicles are manufactured by the Automobile Industry. Indian Automobile Industry includes the manufacturing of trucks, buses, passenger cars, defence vehicles, t wowheelers. The two-wheeler manufacturing is dominated by companies like TVS, Honda Motorcycle & Scooter India (Pvt.) Ltd., Hero Honda, Yamaha, Bajaj, etc. The automobile industry in the country is one of the key sectors of the economy in terms of the employment opportunities that it offers. The industry directly employs cl ose to around 0.2 million people and indirectly employs around 10 million people. The prospects of the industry also has a bearing on the auto-component industry whic h is also a major sector in the Indian economy directly employing 0.25 million people . All is not well with the automobile industry the world over currently with the s lowdown that has gripped most of the major economies of the world. The gap between the manufacturing capacity volume and the assembly volume is growing by the day and has worried the manufacturers. This state of affairs has triggered a lot of cutthroa t competition and consolidation in the industry. Cost reduction initiatives have c ome to be the in thing in the global industry today. Towards this direction, many automobi le factories are being closed down. The Indian automobile industry is a stark contrast to the global industry due to many of the characteristics, which are peculiar to India. The Indian automobile industry is very small in comparison to the global industry. Except for two wheelers and tractors segments, the Indian industry cannot boast of big volumes vis--vis global numbers OVERVIEW OF TWO WHEELER SECTOR Two Wheeler Industry The Indian two wheeler contributes the largest volumes amongst all the segments in automobile industry. Though the segment can be broadly categorized into 3 subseg

ments viz.; scooters, motorcycles and mopeds; some categories introduced in the market are a combination of two or more segments e.g. scooterettes and step-thru 's . In the last four to five years, the two-wheeler market has witnessed a marked shift towards motorcycles at the expense of scooters. In the rural areas, consumers have come to prefer sturdier bikes to withstand the bad road conditions. In the process the s hare of motorcycle segment has grown from 48% to 58%, the share of scooters declined drastically from 33% to 25% , while that of mopeds declined by 2% from 19% to 17 % during the year 2000-01. The Euro emission norms effective from April 2000 led t o the existing players in the two- stroke segment to install catalytic converters. All the new models are now being replaced by 4-stroke motorcycles. Excise duty on motorcycle s has been reduced from 32% to 24%, resulting in price reduction, which has aided in propelling the demand for motorcycles. Within the two-wheeler industry, motorcycle segment grew at a phenomenally high rate of 35% as against a deceleration of 3% for scooters and 27% for mopeds. In fact, motorcycle has been taking away the share of scooters and mopeds in a 4.3 millio n two-wheeler market and surging ahead with its market share of 68%. The increasin g demand from semi-urban and rural segments may have caused this positive shift towards motorcycles. Also, easy credit coupled with low interest rate regime, constrained personal transport, increasing income levels in middle class and hig her aspirations of young people all seem to be the factors responsible for such high growth in two-wheelers. The growth in two-wheelers has been robust enough to counter th e slow down and other factors constraining the overall business activity in the co untry. Also, rationalization of excise duty in the Union Budget 2002-03 had a positive impact on the demand for motorcycles. We also expect the motorcycles to continue to lea d the two-wheeler segment like in all other Asian countries. Available forecasts sugge st that this trend would continue for another couple of years and the industry would rec ord nearly double-digit average annual growth up to 2006. During the year, there have been important developments in two-wheeler industry. The competition has strengthened though there are hardly any new entrants into the industry. There is an increasing emphasis on price and this has led to cost cutt ing efforts all across the industry, thereby, making the customer an ultimate benefi ciary. The trend also saw introduction of new motorcycles with capacity ranging from 10 0 to 180cc bikes. We anticipate that many more new models will be launched during the year and provide customers plenty of choice at competitive prices. Businesses cannot consistently grow at 25-30 per cent. Each business has a tende

ncy to taper and plateau after attaining a particular size. An annual growth rate of 10-12 per cent over a period of time is extremely healthy. The TCS study rankings are conducted at the motorcycle segment-level to provide comparisons among similar groups of motorcycles. Motorcycles ranking highest in their respective segments for TCS are: Hero Honda CD100 SS (best standard motorcycle segment); Hero Honda Splendor (best executive motorcycle segment); Bajaj Pulsar (best premium motorcycle segment); and Royal Enfield Bullet Electra (best cruise r motorcycle segment). "The relatively low score for the premium segment indicates that most manufacturers have fallen short of meeting the high expectations of these b uyers," states Mr. Lochan. "Bajaj Pulsar is one exception with segment-leading ratings a cross all aspects of ownership experience, particularly on areas related to vehicle st yling."te to create a document