Bajaj Auto Ltd.

: Overtaken in the Indian

Auto Market Segment
BY:
Yogesh Varyani
Vikas Mishra
Vishal Bhardwaj
Shaili Sirohi
Puneet Mathur

INTRODUCTION
In the mid -1940s,BAL started as an important of two and
three-wheelers .in the early 1960s,BAL ,in collaboration with
piaggo ,started manufacturing vespa brand scooters at its
plant near Pune , Maharashtra.
In 1970s,BAL started manufacturing scooters under the Bajaj
brand.
Bals first scooter model under the Bajaj brand was
introduced in 1972.(Chetak)
In the late 1990s the Indian two wheeler market witnessed a
shift in consumer preferences.
In 2005-06 scooter sales in the Indian market were around 1
million units annually and consisted predominantly of
gearless scooters. In early 2006 BAL announced that it would
launch two new models of gearless scooters in 2006-07.

3 Jan 2006 Bajaj auto limited slams brakes on chetak

In North India, for more than two or three decades,

marriages did not happened without a Chetak .
It was a compulsory Dowry item

"Like Volkswagen Beetle,

the product (Bajaj Chetak) had lost its relevance."1
- Rajiv Bajaj, MD, Bajaj Auto Ltd., in January 2006

At the peak of popularity the waiting

period was 10-12 years
Bajaj ad
campaign 1989

Bajaj Auto Ltd.(BAL) 2010

Bajaj is India's second largest motorcycle maker,
smaller than Hero Motorcorp, but larger than TVS
Motor Co. Ltd.
Bajaj Auto, is ranked as the worlds fourth largest
two- and three- wheeler manufacturer.
The company is well known for their R&D, product
development, process engineering and low-cost
manufacturing skills.
Bajaj stopped production of scooter
Planning to launch 4 wheeler by 2012

Oct 2010 sales Data For Domestic Market

Others
8%
Pulsar
28%

3w
16%

Discover
48%

BAJAJS Record of FY 2011, comparing

FY10 and FY09
Particulars

FY 2011

April ~ March
2010

April ~ March 2009

MOTORCYCLES

3,387,043

2,506,749

1,907,853

TOTAL 2
WHEELERS

3,823,927

2,511,600

1,919,625

Bajaj and its competitors

Bajaj ad of today

 Bajaj lite

 Discover

 Pulsar

 platina

BAL & the Indian Two-Wheeler

Market.

1950s -1980s: "License Raj .

Domestic market protected-Govt.restriction.
1950s-Automobile Products of India(API).
Other players:
Enfield(Bullet),Escorts(Rajdoot),Jawa(Yezdi).
1960s:Govt.relaxation to domestic companies.
1970s: BAL manufacture scooters under the "Bajaj
Brand.
Scooter were more preferred to motorcycles.2-wheelers
demand increased due to inefficient transport system, the
Chetak & the Super launched.

Contd
It act as Sellers Market like other consumer goods &
customers had to wait for many years for delivery.(10-12
yrs for Bajaj Chetak).
It plays a major role in dowry in India.
1970s-1980s-Govt. introduced MRTP Act & FERA.
Indian
manufacturing motorcycles were not fuel
efficient, results low sell.
GoI changed several policies in 1970s & early 1980s to
give impetus to auto industry.
Focus on :modernization, technology upgradations,&
healthy competitions in domestic market.

Motorcycle segment
Joint Venture: Foreign players had only option)
Many players like Honda,Suzuki,Yamaha had joint ventures
with Indian companies.
The foreign players came with latest technology, efficient
production system etc that enhance the quality of the motorcycle
in India .
Soon new models come with new style, advanced technology &
fuel efficient.
Scooter segment
LML entered into joint venture with Piaggio in 1982 , to
produce Vespa, sold well in 1980s-1990s after Chetak.
1984:The Kinetic tied up with Honda ,introduced new models ,
new features like self start & automatic gear transmissions.
1980-1990s :BAL dominate by Chetak & Super model with their
values for money appeal durability, versatility, low
maintenance,avaliablity of spare parts ,etc.Hamara Bajaj add
campaign.

The Turning Point:

In 1991 & 1992 overall sales of two wheelers declined by 15% &

8% respectively because of a recession in the Indian two wheeler

market
The scooter segment was the largest sub-segment in the two
wheeler market with 42% share (in terms of unit sales) followed by
motorcycles (37%) & mopeds (21%)
However, in 1990, the pattern of demand changed & motorcycles
became the fastest growing segment
Motorcycles were preferred to scooters in the rural areas because of
poor road conditions
Demographic changes Increasing proportion of younger people in
the overall population

Cont..

Lower interest rates on vehicle loans made motorcycles more

affordable
Sales of motorcycles surpassed that of scooters for the first
time in 1999 (with Hero Honda SPLENDOR)
In 1999-2000 scooter sales fell by around 75,000 units, while
motorcycle sales increased by more than 400,000 units
BAL had volumes falling 40% year-on-year as scooters were
80% of their total business
In 2000 Bharat Stage II, a new set of emission norms, came
into effect. It was for petrol two-stroke engines & it gave a
blow to BAL, which primarily sold two-wheelers with twostroke engines

BAL FIGHTS BACK

Category

FY 2001

FY 2000

Growth (%)

Geared Scooters

426,334

757,714

-43.7

Un Geared Scooters

78,892

69,726

13.1

Mopeds

121,238

176,961

-31.5

Motorcycles

427,088

254,847

67.6

Total two-wheelers

1,053,552

1,259,248

-16.3

Failed to anticipate consumer response.

Poor research.
BAL increased its production of motorcycles by 67.6% in 2001
even as the production of scooters fell by44%
By 2001, the company was manufacturing as many
motorcycles as geared scooters.

Does stopping the production of

scooter right?

To know this we should know the current sales

figure

Present scooter market

During 2009-10, scooter sales in the domestic market stood at
14,62,507 units compared to 11,48,007 units in the previous
fiscal, up 27.40 percent.
New players has entered
In this segment as
Mahindra and Mahindra
has Launched its scooters

Bajaj plans to re-launch scooters

Two-wheeler major Bajaj Auto Ltd, which
discontinued production of its only ungeared scooter
Wave, will re-enter the segment with a set of
ungeared scooters ranging from 75-125 cc in the first
quarter of next fiscal. Bajaj Auto managing director
Rajiv Bajaj confirmed to FE the company's move to
launch ungeared scooters. Analysts say Bajaj is also
working on a 150 cc-ungeared scooter.
Financial Express
25 August,2011

Bajaj auto ltd. Strategic management

During license Raj

Bajaj auto ltd. Strategic

management

Today

The Flying

Conclusion
To be in market just having a brand name is
not enough, one should look to the changing
customer preference.
The most important factor is one should
update with the changing technology else the
product will phase out.

 Major Competitors of Bajaj today

Hero Motocorp

 Hero Honda CD dawn

HSMI

HMSI

TVS 2 wheelers

Mahindra 2 wheelers

YAMAHA

Thank you..