I NTERNATIONAL M ARKETING P ROJECT P ROPOSAL

Submitted to: Prof. Neelam Kinra

Submitted By: Group 4, Section B Aditi Roy (PGP26260) Anil Digvijay (PGP26263) Loveleen (PGP26285) Mayank Mohan (PGP26289) Rajat Verma (PGP26301) Saumya Singh (PGP26309) Type the author name]
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TWO WHEELER EXPORTS TO SOUTH AFRICA

We have chosen to study an Indian firm exporting two wheelers to South Africa. The 50-million-units-ayear global two-wheeler market is dominated by Japanese brands like Honda, Suzuki, Yamaha and Kawasaki in the $1,000-$3,000 mid-market. The Chinese dominate the bottom of the pyramid. Chinese bikes, sold for $1,000 or less, often cost $300-$400. These prices are much lesser than what is offered by their Indian and Japanese counterparts. However, the following opportunities are seen to exist for an Indian two wheeler exporter in the South African market: There are major markets for two-wheelers in Africa where Japanese brands have not made inroads however; Chinese brands have a significant presence in the African markets. ` Indian two-wheelers fare better in quality and reliability than Chinese counterparts, and are also 30 per cent cheaper than Japanese bikes. Thus they can offer a significant value proposition. Africa is a growing market accounting for 4 million unit sales a year. The low penetration of the two-wheeler segment in Africa also presents a lucrative market for an Indian exporter. However in Africa, distribution is the key and customers dont demand much service. If you have a good distributor and the product is available, you can tap into it quickly.

INDIAN TWO WHEELER INDUSTRY

The Indian automotive industry consists of five segments: commercial vehicles; multi-utility vehicles & passenger cars; two-wheelers; three-wheelers; and tractors. The two-wheeler sales have witnessed a spectacular growth trend since the mid-nineties. Two wheeler exports from India have also shown a significant growth. Although most Indian firms have forayed on their own into target export markets there have been instances of tie-ups with local technology and distribution partners. Some of the major exporters in the two wheeler segments have been Bajaj Auto and Honda Motors. Major two wheeler exports from India FY2000 FY2001 FY2002 FY2003 FY2004 CAGR (FY200004) Scooters 20,188 25,625 41,339 44,174 28332 56,880 18,971 30116 53148 27.4

Motorcycles 35,295 Mopeds Total 27,754 83,237

126122 187287 51.4 23330 24234 -3.3

111,138 104183 179568 264669 33.5

SOUTH AFRICA
Region: Sub-Saharan Africa Population: 49,320,150 (2010) Below are select highlights for South Africa South Africa is ranked 34th out of 183 economies in Doing Business 2011, slightly lower than its last years ranking. Enterprise Surveys (2007) identified Crime, Theft & Disorder, Electricity and Access to Finance as the top 3 constraints on firm investment in South Africa. Among the firms surveyed, 76.38% of them reported paying for security, compared to 61.66% in the region, and 57.11% for all countries surveyed. Over thirty percent (30.09%) of firms surveyed have a line of credit or loans from financial institutions, compared to 22.67% for the region and 34.88% for all countries surveyed. As regards to Lack of Electricity, firms in South Africa reported 2.05 power outages in a typical month, much lower than the regional average (10.45). Several industry sectors covered by the Investing Across Sectors indicators are subject to statutory foreign equity ownership restrictions in South Africa. According to the Economist Intelligence Unit, real GDP growth will quicken from 2.8% in 2010 to 3.7% in 2011 and 4.8% in 2012, helped by stronger external demand and looser fiscal policy. Growth will ebb in 2013-15 because of persistent structural constraints. South Africas economic freedom score is 62.7, making its economy the 74th freest in the 2011 Index. Its score is 0.1 point lower than last year, primarily due to worsened scores in freedom from corruption and labor freedom. South Africa is ranked 5th out of 46 countries in the Sub-Saharan Africa region, and its overall score is higher than the world average. The South African economy benefits from relatively good levels of trade freedom, business freedom, and financial freedom. The regulatory environment encourages competitiveness and flexibility. Continuing integration into global commerce has led to notable increases in productivity. Monetary stability is relatively good, but the government influences prices through regulation, state-owned enterprises, and other support programs. Public debt is expected to rise beyond its current level of around 27 percent of GDP as public investment expands. The lack of regulatory transparency still hinders investment. The legal environment is inefficient but relatively free from political interference and the threat of expropriation. Income category: Upper middle income GNI per capita (US$): 5,770

REFERENCES
1. 2. http://rru.worldbank.org/BESnapshots/South%20Africa/default.aspx http://www.fadaweb.com/two_wheeler_industry.htm

3. http://www.business-standard.com/india/news/new-arena-for-2-wheeler-firms/420613/