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 INTRODUCTION
 GROWTH
 STRATEGIES
 PRODUCT – P’S
 SWOT ANALYSIS
 BCG AND CASH COW ANALYSIS
 MARKET ANALYSIS
 CUSTOMER ANALYSIS
 COMPETITOR ANALYSIS
 CURRENT TRENDS AND FUTURE PROSPECTS
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 29th november 1945 - import of 2 & 3 wheelers
from Italy’s Paiggio & Co.

 1959 – license

 1960 – technical collaboration with Paiggio –

Vespa

 Opening of first manufacturing facility at Akurdi

 Turnover – 72 Mn

 1975 – collaboration – Maharashtra Govt.

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 1981 – first motorcylce – old vespa design

 1984 – license to expand - 1000 acre plant at

Walnuj

 1986 – Kawasaki Heavy industries

 1988 – turnover 5528 mn

 1990 – Bajaj Sunny

 1998 – Rs 3.15 bn plant – 200 acre plot at

Chakan- Pune

 Estimated capacity – 2.5 million by 2000

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 3 ½ year agreement with Shiv Sena
controlled Bharatiya Kamgar Sena Union
Rs 2000 per month – productivity ,
commitment

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 Motorcycle segment dominates the two-wheeler
industry, contributing over 80% of the annual volumes

 The Indian motorcycle market is consolidated with three

key players - Hero Honda, Bajaj Auto and TVS Motors -
accounting for over 90% of the market volumes

 The industry has evolved into an oligopolistic industry

where product differentiation is a decisive variable

 Product life cycles have shortened resulting in frequent

upgrades and model launches.
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• The industry has grown at a CAGR of 14% p.a over the last 5
years,
with sales of 9 million vehicles in 2005-06

• Presently, India is
•2nd largest two wheeler market
•4th largest commercial vehicle market
•11th largest passenger car in the world and is expected to be the
7th largest market by 2016

• The industry has emerged as a key contributor to the Indian

economy
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 Chetak
 no electric ignition
 2 stroke engine
 High polluting

 Classic SL & Bravo

 Superior styling
 Improved suspension & braking system

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 The Spirit
Urban teenager

 2 speed scooterette
 Greater fuel efficiency
 More power

 The Legend
 150 cc scooter
 4 stroke engine
 Fuel efficient
 Met the emission norms

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 Teenagers

 Geographic penetration – rural, semi rural

and urban areas

 Middle class

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 Mid 1980’s
 Honda motor

 Suzuki & TVS group

 Yamaha

 Paiggio

 LML
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Strength Weakness

•High economies of scale
•Highly experienced management
•Product design and development
capabilities.
•Legacy of brand name
•Widespread distribution of network
•Competitive advantage
•Not employed the excess cash for long
•Centralized paternalistic management
style
•No collaboration with any foreign
players
•Not a global player in spite of huge
volume

Opportunities Threats

•Growing gearless, trendy scooters and •Threat of cheap imported motorcycles

scooterette market from China
•Lifestyle segments •Tough competition from foreign &
•Usage of R&D capabilities for new models domestic players.
•Untapped market above 180 cc in •The competition catches-up any new
motorcycles. innovation in no time.

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Stars: Question Mark:

Pulsar 150 & 180CC XCD

Discover
Pulsar 200 & 220CC

Cows: Dogs:

Discover 125CC •Platina

CT 100 •Avenger
•Kristal

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Introduction stage :
Firm seeks to build product
awareness
The product of BAL: pulsar
200&220cc, XCD and Discover 135cc
(Reason: potential for cash
generation)
Decline stage:
Decrease in demand
Competition from substitute products
and lack of new technologies
BAL product in this stage: Avenger
Platina
(Reason: low profit and unchanged
product)
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Growth stage:
Firm seeks to build brand
preference and increase market
share
BAL product at this stage: Bajaj
pulsar 150 & 180cc
(Reason :high demand and
provide good return to the
company)
Maturity stage:
The strong growth in sales diminishes
Competition may appear with similar
products
Primary objective : defend market
share while maximizing profit
BAL product in this stage: CT100 &
Bajaj Discover 125cc
(Reason: low growth due to low level
of innovation)
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There were various reasons for the shift:

1. India was undergoing a demographic change, with the

proportion of younger people in the population growing
significantly.

2. The economy was growing, which increased the disposable

incomes of the middle class

3. Many newer models of motorcycles, with improved designs

and modern technology had become available in the market.

Scooters were BAL's main products, and when market

preferences shifted to motorcycles, the company
was faced with declining sales and revenues.

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 The primary reason is that the Brand forgot the
customers.

 Marketing Myopia -The company failed to understand the

changing perception of the customers towards scooters.

 Rather than looking at the customers, the company

focused on influencing Government to block the opening
up of economy.

 Bajaj never did anything with the product

(For 40 years Chetak had the same look, same quality and
style)

 Bajaj never was serious about product development. The

R&D spent for a long time was a miniscule 1%.

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 The average cycle time for the new product development
was 4-5 years compared to 2-3 years of Japanese
competitors.

 There was nothing wrong with distribution and the pricing

was very reasonable

 The major problem was in the first P : Product.

 Bajaj never seriously looked at customer perception about

Chetak. The product had serious problems like starting
trouble and riding comfort

 The decline was directly related to neglect of this segment

over mileage, contemporary technology, and non-stop
excitement of launch of newer and newer models offered on
the motorcycles platform.

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 1985

 “ old wine in new bottle”

 Focus on marketing & distribution

 Scout for latest technology

 Announced 17 new models in 24 months

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 Collaboration
 Austria AVL – develop direct fuel injection
system – 2 stroke engines

 Australia’a Orbital Engine Co. - combustion

system

 Italy’s Cagiva Motor Co. - electric powered

scooters

 Tie ups – Toyko – scooterettes & mopeds

 Kawasaki Heavy industries – motorcycles

 Kubota for diesel engine

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 Unambigouous Bottom- up Approach

 Cost structure

 Platform process

 Backward integration

 Outsourcing

 Active assistance of suppliers in Joint

Venture
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 Cell manufacturing system

 Trim the number of vendors

 @ Manufacturing operation
 Evaluation of every task- time, quality,cost
 Target & tackle inefficiencies

 Low cost mass manufacturing

 Working smarter

 Doubled dealer network

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 Attractive finance scheme flat 9 %- Bajaj
Auto finance ltd – 26 branches – easy
payment and faster processing
 Process redesign
 Tooling modification

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 Premium end market

 Go green

 Well equipped R & D

 New technologies

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 Corporate identity

 Dealer development programme

 Standardisation & modernisation of dealer

network

 Assisting dealers – maximize returns

 Improved after sales efficiency

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 “Sales through service”

 Dealer conferences

 Modernize workshops

 Rigorous training

 Extensive servicing network & spare parts

delivery

 “Fast Track”

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