2010

BAJAJ AUTO LTD

International Academy of Management & Entrepreneurship

Manjri Varu PGPM/0911/021 2009-2011

Bajaj Auto Ltd.

A JOURNEY FROM HAMARA BAJAJ TO DISTINCTLY AHEAD

EXECUTIVE SUMMARY
The Bajaj Group was founded in 1926 by Jamnalal Bajaj and now consists of 27 companies. In 1945, Jamnalal Bajaj had formed M/s Bachraj Trading Corporation Private Limited, the flagship company, to sell imported two-wheelers and three-wheelers. The company acquired a license from the government in 1959 to manufacture these vehicles and went public the next year. By 1977, the company saw its plant rolling out 100,000 vehicles in a single year. In another nine years, Bajaj Auto could produce 500,000 vehicles in a year. The present Chairman of the Bajaj group, Rahul Bajaj, took charge of the business in 1965. He was the first licensee of the Indian make of the Italian Vespa scooter. Japanese and Italian scooter companies began entering the Indian market in the early 1980s. Although some boasted superior technology and flashier brands, Bajaj Auto had built up several advantages in the previous decades. Its customers liked the durability of the product and the ready availability of maintenance; the company's distributors permeated the country. By 1994-95, Bajaj was racing to beat Honda, Suzuki and Kawasaki in the two-wheeler segment internationally. By 1997, Bajaj faced tough competition in the domestic market and its market share stood at 40.5%. Under the leadership of Rahul Bajaj, the turnover of Bajaj Auto has gone up from Rs.72 million to Rs.46.16 billion (USD 936 million), its product portfolio has expanded from one to many and the brand has found a global market. Bajaj as a brand is well-known across several countries in Latin America, Africa, Middle East, South and South East Asia.The company has a network of 498 dealers and over 1,500 authorised service centers and 162 exclusive three-wheeler dealers spread across the country. Bajaj has identified a segment of customers called 'Probikers', who are knowledgeable about motorbikes and appreciative of contemporary
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technology. They are trendsetters and very choosy about what they ride. Hence, Probikers need to be addressed in a meaningful way that goes beyond the product. Bajaj Auto is in the process of setting up a chain of retail stores across the country exclusively for high-end, performance bikes. These stores are called Bajaj Probiking". Fifty two such stores have been opened across India. Catering to demand in this sector requires a strong and effective distribution network as consumers are more demanding and expect delivery on time. Early delivery is a cause of delight for customers. With such vast global and Indian rural presence, designing an efficient distribution system becomes a complex task even for a company like Bajaj Auto. Lot of time and effort goes into designing a strategy based efficient distribution system.

Two Wheeler Industry: An Overview

The Indian two-wheeler industry has witnessed spectacular growth in the last few years. The market dynamics of the industry has substantially changed with a majority of the customers preferring bikes to scooters and mopeds. This is primarily due to better fuel efficiencies, dynamics, looks and longer product lives of motorcycles. The motorcycle segment constitutes about 81.5% of the two wheeler market in India1. It also contributes to three-fourths of the total exports in the two wheeler industry. Exhibit 1 shows that Bajaj is the second largest player in this segment after Hero Honda.

Exhibit 1. Market Shares of the major players in the two wheeler market segment

The industry exhibits some degree of collusive behaviour and thus represents an oligopolistic form of market structure. Product and brand
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differentiation are seen as the primary means of sustaining competitive advantage. In order to sustain brand equity, players spend large percentages of their revenues in advertising and brand building activities. The supply and distribution networks are decisive factors in staying competitive and normally need a huge capital investment. The two wheeler industry is capital intensive with large fixed cost requirements and new model introductions mandatory at frequent intervals in order to sustain the demand. This involves substantial design and R&D costs. Such high fixed costs can be offset only by achieving economies of scale. Moreover, developing a distribution channel is extremely difficult in a country like India. Therefore, it is difficult for a new player to enter this industry.

INTRODUCTION
Bajaj Auto is a major Indian automobile manufacturer started by a Rajasthani merchant. It is world's fourth largest manufacturer of twowheelers and India's second largest two wheeler manufacturer and the world's 4th largest two- and three-wheeler maker. It is based in Pune, Maharashtra, with plants in Akurdi and Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttaranchal. Bajaj Auto makes and exports motor scooters, motorcycles and the auto rickshaw. The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1946. Over the last decade, the company has successfully changed its image from a scooter manufacturer to a two wheeler manufacturer. Its product range encompasses scooterettes, scooters and motorcycles. Its real growth in numbers has come in the last four years after successful introduction of a few models in the motorcycle segment. The company, headed by Rahul Bajaj, is worth more than US$1.5 billion. Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading Corporation Private Limited. It started off by selling imported two- and three-wheelers in India. In 1959, it obtained license from the Government of India to manufacture two- and three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977, it managed to produce and sell 100,000 vehicles in a single financial year. In 1985, it started producing at Waluj in Aurangabad. In 1986, it managed to produce and sell 500,000 vehicles in a single financial year. In 1995, it rolled out its ten millionth vehicle and produced and sold 1 million vehicles in a year.
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Bajaj has grown operations in 50 countries by creating a line of valuefor-money bikes targeted to the different preferences of entry-level buyers.

NATURE OF THE BUSINESS

Bajaj Auto Ltd. is the largest exporter of two and three wheelers. With Kawasaki Heavy Industries of Japan, Bajaj manufactures state-of-the-art range of two-wheelers. The brand, Pulsar is continually dominating the Indian motorcycle market in the premium segment. Its Discover DTSi is also a successful bike on Indian roads. The Bajaj Group is amongst the top 10 business houses in India. Its footprint stretches over a wide range of industries, spanning automobiles (two-wheelers and three-wheelers), home appliances, lighting, iron and steel, insurance, travel and finance. Bajaj Auto, the flagship company of the Bajaj group, manufacturers twowheelers and three-wheelers scooters. The company manufactures and markets scooters, motorcycles, passenger carriers and goods carriers. Bajaj Auto also trades spare parts and accessories. The company has distribution network in 50 countries and presence in India, Sri Lanka, Colombia, Bangladesh, Mexico, Central America, Peru and Egypt. It is headquartered in Pune, India. BAL has two main objectives: To cater the market needs of transportation by providing 2 wheeler and 3 wheeler vehicles and to produce the catalogue products to cater to the changing market requirements. Bajaj Auto Limited makes scooters for commuters. The company manufactures and sells small motorcycles, scooters, and three-wheeler vehicles. Motorcycle and scooter models include Avenger, Discover, Kristal, Platina, and Pulsar. The three-wheelers are used for both passenger transportation and light delivery. Bajaj's technology partner, Kawasaki Heavy Industries, has helped the company bring a number of bikes to the Indian market -- including the Kawasaki Bajaj Eliminator -- India's first heavy cruiser. Nearly 3 million units of Bajaj's products are annually distributed to more than 50 countries. Bajaj Auto was founded in 1945.

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BACKWARD ANALYSIS
Founded in 1926, at the height of India's movement for independence from the British, the group has an illustrious history. The integrity, dedication, resourcefulness and determination to succeed which are characteristic of the group today, are often traced back to its birth during those days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the group, was a close confidant and disciple of Mahatma Gandhi. In fact, Gandhiji had adopted him as his son. This close relationship and his deep involvement in the independence movement did not leave Jamnalal Bajaj with much time to spend on his newly launched business venture. His son, Kamalnayan Bajaj, then 27, took over the reins of business in 1942. He too was close to Gandhiji and it was only after Independence in 1947, that he was able to give his full attention to the business. Kamalnayan Bajaj not only consolidated the group, but also diversified into various manufacturing activities. The present Chairman of the group, Rahul Bajaj, took charge of the business in 1965. Under his leadership, the turnover of the Bajaj Auto the flagship company has gone up from Rs.72 million to Rs.46.16 billion (USD 936 million),its product portfolio has expanded from one to and the brand has found a global market. He is one of India's most distinguished business leaders and internationally respected for his business acumen and entrepreneurial spirit.

COMPANY FLASHBACK
'Inspiring Confidence,' the tagline, has build up confidence, through excitement engineering, not only to domestic consumers but also internationally. Established just eight decades back in 1926 by Jamnalal Bajaj, the company has been vested with India's largest exporter of two and three wheelers, 196,710 units in 2004-05, a great 26 per cent jump over the previous year. Bajaj Auto Ltd. sales have increased by approximately 21 per cent in the year 2004-05, which exceeds Rs 65.4 billion, a record in the history of the company. The gross operating profit stands at Rs. 9.3 billion, again a record. The profits after tax of the BAL are close to Rs. 7.7 billion, and the pre-tax return on operating capital is at an impressive 80 per cent. The strength of the company is its quality products, excellence in
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engineering and design, and its ability to delight the customers. The Pulsar, introduced in November 2004, is continually dominating the premium segment of the motorcycle market, helping to maintain the market superiority. Discover DTSi, one more successful bike on Indian roads, is in the 'value' segment of the motorcycle market. It incorporates a high degree of power with fuel efficiency of a 100 cc motorcycle. BAL is committed to prevention of pollution, continual improvement of environment performance and compliance with all environmental legislation and regulations. They always believe in providing the customer 'value for money' and keeps a special eye upon quality, safety, productivity, cost and delivery.

COMPANY PROFILE
Bajaj Auto Ltd. is the largest exporter of two and three wheelers. With Kawasaki Heavy Industries of Japan, Bajaj manufactures state-of-the-art range of two-wheelers. The brand, Pulsar is continually dominating the Indian motorcycle market in the premium segment. Its Discover DTSi is also a successful bike on Indian roads.

MANAGEMENT
Rahul Bajaj Madhur Bajaj Rajiv Bajaj Sanjiv Bajaj Pradeep Shrivastava Rakesh Sharma R C Maheshwari S Sridhar Abraham Joseph Eric Vas C P Tripathi Kevin Dsa K Srinivas N H Hingorani S Ravikumar Chairman Vice Chairman Managing Director Executive Director President (Engineering) CEO (International Business) CEO (Commercial Vehicles CEO (Two Wheelers) President (Research & Development) President (New Projects) Vice President (Corporate) Vice President (Finance) Vice President (Human Resources) Vice President (Commercial) Vice President (Business Development)

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QUICK FACTS
Founder Year of Establishment Industry Business Group Presence Jamnalal Bajaj 1926 Automotive - Two & Three Wheelers The Bajaj Group Distribution network covers 50 countries. Dominant presence in Sri Lanka, Bangladesh, Columbia, Guatemala, Peru, Egypt, Iran and Indonesia. Kawasaki Heavy Industries of Japan Akurdi Pune - 411035 India Tel.: +(91)-(20)-27472851 Fax: +(91)-(20)-27473398

Joint Venture Registered & Head Office

Awards & Accolades

Product Bajaj Discover 135 Pulsar Award Bike of the Year 2009 Ranked First in 'TOP 30 AUTOMOBILE BRANDS OF INDIA' Bike of the Year 2008 Bike of the Year 2008 Award for motorcycle up to 125cc 2008 Bike of the Year 2008 Bike of the Year 2008 Award Body NDTV Profit Car India and Bike India Awards 4Ps Power Brand Awards

XCD 125 DTS-Si XCD 125 DTS-Si XCD 125 DTS-Si Pulsar 220 DTS-Fi Pulsar 220 DTS-Fi
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Business Standard Motoring CNBC-TV18 Auto car Auto Awards NDTV Profit Car India and Bike India Awards Overdrive NDTV Profit Car India

Pulsar 220 DTS-Fi

IMOTY Award-Indian Motorcycle of the Year 2007 Bike of the year 2007 Man of the year 2005 Man of the year 2005 Motorcycle Total Customer Satisfaction Study 2005 Bike of the Year 2005 Indigenous Design of the Year Bike of the Year 2004

Pulsar DTS-Fi Mr. Rajiv Bajaj Mr. Rajiv Bajaj Bajaj CT 100

and Bike India Awards All Auto MagsOverdrive, Auto Car, BS, Bike Top Gear CNBC-TV18 Auto car Auto Awards Auto car Professiona Bike India TNS Automotive

Bajaj Discover DTS-i Bajaj Discover DTS-i Bajaj Wind 125

Overdrive Overdrive

Business Standard Motoring Bajaj Wind 125 Two Wheeler of the CNBC AUTOCAR Year 2004 AUTOAWARDS 2004 Bajaj Pulsar DTS-i Bike of the Year 2004 ICICI Bank Overdrive Awards 2004 DTS-i Technology Auto Tech of the Year ICICI Bank Overdrive 2004 Awards 2004 BAJAJ AUTO Bike Maker of the Year ICICI Bank Overdrive 2004 Awards 2004 Bajaj Boxer AT KTEC BBC World Wheels BBC World Wheels Award for Best Two Wheeler under Rs.30,000/Bajaj Pulsar 150 DTS-i BBC World Wheels BBC World Wheels Award for Best Two Wheeler between Rs.45,000/to Rs.55,000/ Bajaj Pulsar 180 DTS-i BBC World Wheels BBC World Wheels Award for Best Two Wheeler between Rs.55,000 /-to Rs.70,000/Bajaj Pulsar 180 DTS-i BBC World Wheels BBC World Wheels
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Bajaj Pulsar

Bajaj Pulsar Bajaj Pulsar Bajaj Pulsar Bajaj Eliminator Bajaj Eliminator

Viewers Choice Two Wheeler of Year 2003 Motorcycle Total Customer Satisfaction Study 2003 Bike of the Year 2003 Bike of the Year 2002 Most Exciting Bike of the Year2002 Bike of the Year 2002 Most Exciting Bike of the Year2001

NFO Automotive

ICICI Bank OVERDRIVE Awards 2003 Business Standard Motoring Overdrive Overdrive Overdrive

GROUP OF COMPANIES
Bajaj Auto Ltd. Bajaj Holdings & Investment Ltd. Bajaj Finserv Ltd. Bajaj Allianz General Insurance Company Ltd. Bajaj Allianz Life Insurance Co. Ltd Bajaj Financial Solutions Ltd. Bajaj Auto Finance Ltd. Bajaj Allianz Financial Distributors Ltd. Bajaj Auto Holdings Ltd. P T Bajaj Auto Indonesia (PTBAI) Bajaj Auto International Holdings BV Bajaj Electricals Ltd. Hind Lamps Ltd. Bajaj Ventures Ltd. Mukand Ltd. Mukand Engineers Ltd. Mukand International Ltd. Bajaj Sevashram Pvt. Ltd. Jamnalal Sons Pvt. Ltd. Rahul Securities Pvt Ltd

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Shekhar Holdings Pvt Ltd Madhur Securities Pvt Ltd Niraj Holdings Pvt Ltd Shishir Holdings Pvt Ltd Kamalnayan Investments & Trading Pvt Ltd Sanraj Nayan Investments Pvt. Ltd. Hercules Hoists Ltd. Hind Musafir Agency Pvt. Ltd. Bajaj International Pvt. Ltd. Bachhraj Factories Pvt. Ltd. Baroda Industries Pvt. Ltd. Jeevan Ltd. Bachhraj & Co Pvt Ltd The Hindustan Housing Co. Ltd.

MISSION AND VISION STATEMENT

MISSION
Focus on value based manufacturing Fostering team work & enhancing the capability of the team Continual Improvement Total elimination of wastes Pollution free & safe environment

VISION
To attain World Class Excellency by demonstrating Value added products to customers

OBJECTIVE

Bajaj Limited is to cater the market needs of transportation by providing 2 wheeler and 3 wheeler vehicles. BALW has been producing the catalogue products to cater to the changing market requirements. Based on the customer feedback, improvements are being made continuously in the existing products. To catapult Bajaj Auto as the countrys largest automobile company.

GOAL

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CULTURES AND VALUES

BRAND IDENTITY Brand is the visual expression of our thoughts and actions. It conveys to everyone our intention to constantly inspire confidence. Our customers are the primary audience for our brand. Indeed, our Brand Identity is shaped as much by their belief in Bajaj as it is by our own vision. Everything they do must always reinforce the distinctiveness and the power of their brand. They can do this by living their brand essence and by continuously seeking to enhance their customers' experience. In doing so, they ensure a special place for themselves in the hearts and the minds of customers. BRAND ESSENCE Brand Essence is the soul of their brand. Their brand essence encapsulates their mission at Bajaj. It is the singular representation of terms of endearment with their customers. It provides the basis on which they grow profitably in the market. Their Brand Essence is Excitement. Bajaj strives to inspire confidence through excitement engineering. Blending together youthful creativity and competitive technology to exceed the spoken and the implicit expectations of customers. By exploring the unknown and thereby stretching themselves towards tomorrow, today. BRAND VALUES They live their brand by values of Learning, Innovation, Perfection, Speed and Transparency. Bajaj will constantly inspire confidence through excitement engineering. Learning: Learning is how they ensure proactivity. It is a value that embraces knowledge as the platform for building well informed, reasoned, and decisive actions. Innovation: Innovation is how they create the future. It is a value that provokes them to reach beyond the obvious in pursuit of that which exceeds the ordinary.
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 Perfection: Perfection is how they set new standards. It is a value that exhibits their determination to excel by endeavouring to establish new benchmarks all the time. Speed: Speed is how they convey clear conviction. It is a value that keeps them sharply responsive, mirroring our commitment towards their goals and processes. Transparency: Transparency is how they characterise themselves. It is a value that makes them worthy of credibility through integrity, of trust through sensitivity and of loyalty through interdependence.

ORGANISATIONAL STRUCTURE
India's premier automotive company, has unveiled a focused organizational restructuring for the Auto business. With this restructuring, the existing business roles and responsibilities at the company has been strengthened and enhanced to ensure greater operational empowerment and effective management. The five pillars of this new structure, called strategic units, are,

R&D Engineering Two-wheeler business unit Commercial vehicles business unit and International business unit

Sanjiv Bajaj said that they are trying to make the organisational structure more responsive. They have brought down the number of layers between the chief executive officer (CEO) and the shop-floor level to four, which is in line with existing standards. They are further looking at cutting down on one more layers in the organisational structure. This re-organisation, according to him, is a reflection of the changing market structure and dynamics. Bajaj Auto Ltd also plans to invest in marketing, sales and the R&D side. BAL had recently announced a voluntary retirement scheme for middlelevel management covering around 400-500 people of which 170 odd, opted for the VRS. BAL has previously stated that it intends to bring down its workforce level to 10,000 from its current 13,000 odd levels.

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Interestingly, the countrys other major two-wheeler manufacturer Hero Honda has also embarked on a manpower rationalisation drive at the top level. The aim is to induct fresh competencies at the senior level.

BAJAJ: THE TURNING POINT

The early 1990s saw a recession in the Indian two-wheeler market. Overall sales of two wheelers declined by 15% in 1991 and 8% in 1992. This period saw a steep rise in fuel prices which resulted in consumers placing greater emphasis on fuel efficiency when purchasing a new two wheeler. However, even as late as 1997-98, the scooter segment was the largest sub segment in the two wheeler market. Scooters, with 42% of the market (in terms of unit sales), were followed by motorcycles (37%), and mopeds (21%).

BAJAJ FIGHTS BACK

By the end of FY2000, the numbers clearly indicated that consumer preference had shifted firmly towards motorcycles with four-stroke engines and industry watchers predicted that this trend would continue. Geared scooter sales registered a fall of 41% in 2001. The market has shifted to motorcycles. We will have to follow the trend, says Venu Srinivasan. BAL realised though rather belatedly, that it would have to cater to the changing consumer tastes and preferences, if it had to survive. Rajiv, who later agreed that BAL had been slow in reading the demand pattern said that the company had failed to anticipate consumer behaviour.

THE FALL OF AN ICON HAMARA BAJAJ

Ad campaign helped Bajaj position CHETAK:
A geared model-scooter occupying near iconic status. In January 2006, BAL announced that it had stopped production of Chetak. With this announcement, BAL closed a major chapter in its history. Rajiv said that it was a history he would like to forget. His
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company has lived too long on nostalgia... holding on to anything from the past is a sign of weakness.

Change in Communication Strategy

DISTINCTLY AHEAD

INSPIRING CONFIDENCE

HAMARA BAJAJ

INSPIRING CONFIDENCE
Bajaj Launched a series of motorcycle in an attempt to capture market share.In 2001, BAL showed slice of life situations of new age India.Analyst felt that by 2004, BALs image had undergone considerable change. But In spite of changing its focus & strategy from scooters to motorcycles BAL - MD felt that:

"Like Volkswagen Beetle, the product (Bajaj Chetak) had lost its relevance." "We believe it is not good enough to be better, it is important to be distinct. This Lead to the strategy of

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DISTINCTLY AHEAD

BAL announced new corporate strategy in mid 2007. Its USP Styling & Technology. Bajaj repositioned itself aggressive & fast-paced. Their new strategy Distinctly Ahead focused on 3-core values: Innovation, Speed & Perfection. The ad featured pay-off line, Alag Andaaz, Alag hai Khoj, Rakhe Aage, Hamari Soch. Bajaj launched Bajaj Pulsar flagship brand- based on this strategy.

BCG MATRIX FOR BAJAJ

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SWOT ANALYSIS
STRENGTH WEAKNESS High economies of scale. Hasn't employed the High economies of excess cash for long. scope. Centralized paternalistic Legacy of brand name. management style. Not a Widespread distribution global player in spite of network. huge volumes. No collaboration with any of the foreign players. OPPORTUNITIES The growing gearless trendy scooters and scooterette market. Can use the existing R&D capabilities for new models. Can invest and grow the life style segments. THREATS The competition catchesup any new innovation in no time. Threat of cheap imported motorcycles from China. Tough competition faced by foreign as well as domestic players.

PRODUCT PROFILE
Two-wheelers: domestic The domestic two-wheeler market is dominated by motorcycles. Its growth in 2006-07 needs to be viewed in two clearly distinct phases. For thefirst three quarters of the year, the two-wheelers witnessed very healthy growth, and it was a part of the continuing growth story of the previous few years. In the last three months of the year, however, overall market growth slackened considerably largely due to steadily rising interest rates and constraints on credit growth due to actions taken by the Reserve Bank of India, banks and financial institutions to control non-food credit. However, this credit squeeze is, at worst, a short term phenomenon. The fact is that over the last four years, India has achieved a compound annual GDP growth rate well in excess of 8 per cent - something that is expected to continue over the future. Over the last decade, household incomes have increased significantly in urban as well rural India and,

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with it, consumer spends - especially on non-food items and durables. Two-wheeler penetration still remains very low by any standard. Therefore, the longer term story for two-wheeler is an extremely good one, where the country is bound to see healthy double-digit market expansion in the years to come. In 2006-07, the industrys overall sales of two wheelers grew by 12 per cent from 7.57 million to 8.47 million units. Motorcycles sales grew by 14 per cent from 6.2 million to 7.1 million. The share of motorcycles in the two-wheelers segment for the industry as a whole increased from 82 per cent in 2005-06 to 84 per cent in 2006-07. Chart A depicts the industry sale of two-wheelers over the years. Chart A: Industrys sale of Two-Wheelers

Motorcycles
Bajaj Autos sale of motorcycles by volume grew by 24.4 per cent in 2006-07 - which was significantly greater than that of the industry. Consequently, the Company has continued to increase its market share in motorcycles, which stands at 33.5 per cent in 2006-07, compared to 30.8 per cent in 2005-06. Table 1 gives the data for the last five years. As in the previous year, this Management Discussion and Analysis analyses the performance of Bajaj within different broad segments of the motorcycle industry: 1. The high performance segment: This includes motorcycles in the engine class of 150 cc and above. Bajaj Auto competes here with the Pulsar range and Avenger DTS-i.

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2. The 125 cc segment: Bajaj Auto competes in this category with Discover DTS-i 125 and the recently launched Discover DTS-i 135. 3. The 100 cc segment: Here, Bajaj Auto competes with the Discover 110, Platina and the CT-100.

Chart B : depicts industry-wise sales across these three segments Chart B: The Market Segment for Motorcycles

The High Performance Segment ( 150cc)

With several variants of its Pulsar DTS-i and the Avenger DTS-i, Bajaj Auto has a dominating share (61%) in this segment. In 2006-07, the Pulsar DTS-i (the 150 cc and 180 cc models) was upgraded with sportier looks and industry-first features like digital speedometer console, LED tail lamps and self cancelling direction indicators. Despite launches by the competition, Bajaj continues its domination in this category due to these and other product initiatives. It is a case of being Distinctly Ahead
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- the Pulsar range effectively sets the benchmark for the rest of the industry to follow. Some other initiatives include a new variant, the Pulsar 200 DTS-i, which was launched in January 2007 entirely through Bajaj Autos own Probiking showrooms. It has been received very well by the consumers. Yet another upgrade, the Pulsar 220 DTS-Fi, was pilot launched in April 2007. The Pulsar DTS-Fi (fuel injection) sets a new benchmark in the high performance segment with a fuel injected engine and features like projector headlamp, clip on handle bars and rear disc brake. Due to these upgrades and new launches, sale of the Pulsar range has grown to 40,000 vehicles per month - an increase of 24 per cent over last year.

The 125cc Segment

Bajaj Auto is the pioneer in this segment through its Discover DTS-i. Its success has spawned a host of introductions from competitors. Despite heightened competition, Bajaj Autos share in this segment has grown, and stands at 32 per cent with a volume growth of 28 per cent in 200607 over last year. To create greater play in this space, a newer version of the Discover DTS-i with a 135 cc engine has been launched in April 2007. This, along with a styling upgrade on the existing 125 cc Discover DTS-i, is expected to continue the Companys momentum in this growing segment. Bajaj Auto will demonstrate what Distinctly Ahead means with the introduction of an all-new engine platform in the second quarter of 2007-08. This will be a model that has great style as well as a robust design; it will show how customers can enjoy low emissions at low costs; and demonstrate that there can be both good performan ce and great fuel economy.

100cc Segment
Although the largest segment in the motorcycle market, it has been falling in percentage terms over the last few years. Moreover, it has been beset with intense competition from all players, accompanied by aggressive pricing initiatives and promotions. It is no secret that with heightened price sensitivity and competition, this segment is becoming increasingly commoditised. While the domestic 100 cc segment accounts for 41 per cent of the companys motorcycle sales (numbers) it contributes less than a quarter of the Companys revenues. Hence,
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reduced margins here affect Bajaj Auto far less than the competition, for which this is a more dominant play. However, Bajaj Auto will continue to aggressively play in this segment and expand both markets as well as its market share. Equally, at the top end of the 100 cc space, it will encourage consumers to migrate to the 125 cc and 135 cc Discover DTS-i and even the Pulsar 150 cc variants. This migration to higher value is expected to intensify with the Companys launch of new motorcycles in the upper end.

Other Two-Wheelers
With motorcycles accounting for 84 per cent of the two-wheeler market, most of the other segments like geared scooters, mopeds and step-thrus have shrunk during 2006-07. Sale of geared scooter for the industry has fallen by 47 per cent, from 198,600 in 2005-06 to 104,000 in 2006-07. The un-geared segment has registered a growth of 11 per cent, from 791,676 in 2005-06 to 878,829 in 2006-07. Bajaj Auto introduced its un-geared Kristal DTS-i towards the end of the year. This vehicle has scored well on customer satisfaction and, within three months, has recorded an average monthly volume of 2,700 vehicles.

Three-Wheelers
Domestic demand for autorickshaws is being driven by the regulatory need to replace earlier vehicles with clean fuel models. In earlier years, Delhi, Mumbai and Ahmedabad had legislated in favour of CNG/LPG vehicles. 2006-07 saw the addition of a number of cities, including Hyderabad, Bangalore, Chennai, Lucknow, Kanpur, Agra, Kolkata, Gurgaon, Faridabad and Ghaziabad. Bajaj Autos sales in these cities contributed significantly to its growth in the small passenger segment. The large diesel passenger autorickshaw segment has been enjoying fairly rapid growth. Bajaj Auto is in this space with its model, the Mega which has been upgraded in the current year, and has been well received in the market. The Company will also be launching a CNG-based Mega in the second quarter of 2007-08, and looks forward to a more aggressive presence in this market in 2007-08. The sub-1 ton cargo segment also has shown a robust growth at 15 per cent, and Bajaj Auto has grown in line with the industry, with its market
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share remaining at a little over 26 per cent. Like the Mega, the Company has launched the CNG version of its cargo vehicle in cities where diesel vehicles are now banned. Table 2 : Three-wheeler sales and share of Bajaj Auto (in numbers)

In its efforts at being Distinctly Ahead, Bajaj Auto has introduced a first of its kind two-stroke digital direct injection three-wheeler, which offers customers 30 per cent higher fuel efficiency and superior operating performance. Moreover, the Company has been able to de-risk the vagaries of the domestic market by having around 45 per cent of its total three-wheeler sales in 2006-07 coming from exports - up from 30 per cent in the previous year.

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MARKET SHARE
Mkt share Motorcycle/Stepthrou's 2008-09
Bajaj Auto
44% 24% 6% 18%

Hero Honda TVS Yam aha

8%

Mkt share 3-wheelers 2008-09

2% 15% 9% 70% 4%

Atul Auto Bajaj Auto Bajaj tempo

M&M
Piaggio vehicles

Mkt share Scooter/Scooterette 200809

25% 39% 17% 19% scooters/scooterette 6000000 moped motorcycle/step-throu's

Bajaj Auto HMS TVS Others

4000000 2000000
0 FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03

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COMPETITORS
Last Price Market Cap. (Rs. cr.) 33,951.87 Sales Turnover 12,356.88 Net Profit Total Assets 3,879.24

Hero Honda

1,700.25

1,281.76

Bajaj Auto 1,712.35 TVS Motor LML Kinetic Motor 65.90

24,774.88 1,565.41

8,810.36 3,736.67

656.48 31.08

3,439.69 1,719.11

9.55 25.15

78.30 53.00

167.77 15.70

-51.62 97.61

-26.48 -5.18

Bajaj Auto V/s Hero Honda

Comparison
Attributes P/E Ratio EPS NET PROFIT MARGIN(%) LAST DIVIDEND (%) RETURN ON AVG. EQUITY GROSS PROFIT MARGIN(%) Bajaj Auto 31.74 45.39 7.40 220 38.92 11.06 Hero Honda 25.75 64.18 10.30 1000 33.72 12.75

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DISTRIBUTION NETWORK
Bajaj Auto is restructuring its marketing and distribution network to address the different requirements of the urban and rural markets. The company has recently launched its high-end bike dealership Probiking and is now in the process of categorising its existing 479 dealership network into urban and rural dealerships. Rajiv Bajaj, MD, Bajaj Auto said, Besides Probiking, which is our channel for high-end bikes, we will split the rest of the two-wheeler dealer network into rural and urban. This is being done to cater to the different needs of the rural and urban customer in terms of product, infrastructure, working capital, financing and servicing. As competition hots up in the Indian motorcycle industry, Bajaj Auto Ltd and TVS Motor Company are chalking out aggressive marketing plans to race ahead in this sector. In a bid to regain its leadership position, Bajaj Auto is planning to expand its distribution network to reach out to a wider target audience. Likewise, TVS Motor Company is all set to extend the number of its dealership and service centres in the near future. Clearly, Bajaj Auto and TVS Motor are shifting gears. On Bajaj Autos distribution strategy, says Bajaj Auto vice-president (business & product development) RL Ravichandran: We plan to expand our dealership network and service centres to improve our penetration into smaller towns across the country. In fact, we plan to increase the number of dealerships and service centres by 20 to 25 per cent. With this move, we will be able to cover towns with a population of two to three lakh. Incidentally, the company is all set to unveil its entry-level motorcycle called BYK this month. Priced at Rs 30,000, BYK is positioned as a stylish bike targeted at the entry-level audience. Ogilvy & Mather India will be designing the communication strategy for the new bike from the Bajaj stable. As part of its offline promotion strategy, the company recently hosted the Bajaj Boxer Indian Telly Awards 2002 on Star Plus to promote its Bajaj Boxer range.

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POSITIONING STRATEGIES
Ever since losing its leadership position, BAL was trying out new strategies including use of new technology and new marketing communication campaigns. For instance, in the early 2000s it started focusing more on the motorcycle market with new product launches, complemented by new communication campaigns to inject vibrancy into the Bajaj brand. The ad spots launched in late 2001 showed 'slice of life' situations of "new age"India. Analysts felt that by 2004, BAL's image had undergone considerable change in the mind of the target audience. BAL reinforced this through another campaign called 'Inspiring Confidence' that year. In addition to bringing change in its products and creating brands that inspired confidence, BAL wanted its products to be 'distinctly ahead' in the wake of growing competition in the intensely competitive automobile market. BAL's new corporate strategy announced in mid 2007, 'Disinctly Ahead', was aimed at embedding these changes in the collective consciousness of the company. It was aimed at offering consumers products that were unique and at the forefront compared to its competitors. The 'Distinctly Ahead' strategy focused on three core values - innovation, speed, and perfection. Commenting on its new strategy, Rajiv Bajaj, Managing Director, BAL, said, "We believe it is not good enough to be better, it is important to be distinct. That is a filter that we apply to everything we do - be it product development, manufacturing processes or communication development. Our flagship brand Pulsar is the strongest evidence of this philosophy. It is only a differentiated offering that customers see value in and aspire for."3 The company launched a 'Distinctly Ahead' communication campaign, created by ad agency Lowe, to signify its new aggressive and fast paced image. The ad showed a 220 Pulsar DTS-Fi morphing into several 220 Pulsars as they raced with each other. The ad featured the pay-off line, "Alag Andaaz, Alag hai Khoj, Rakhe Aage, Hamari Soch"and a background
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theme music that was a much peppier version of the original 'Hamara Bajaj' theme music. Through this, the company sought to communicate that BAL lays down its own standards and principles and believes in competing with itself. Bajaj Auto's new brand strategy in motorcycles paid off well with the company on course to recording its best year ever in terms of profitability and market share. Its market share, which was barely 17 per cent a year ago, has increased since to 35 per cent today. We have more than doubled our market share in a year and would be at our highest level by the end of this quarter, Mr Rajiv Bajaj, Managing Director, told Business Line. The confidence stems from the fact that there are still three months to go for the recently launched Pulsar 135 to consolidate itself in the market and start clocking volumes. Bajaj Auto has targeted a monthly output of 100,000 Pulsars by end-March 2010 and believes the new 135cc will play a key role in achieving this goal. At present, the Pulsar 150, 180 and 220 versions together account for around 60,000 units each month. Discover on track The Discover is on track with its targeted monthly numbers of 100,000 units. This has been spurred largely by the new 100cc version which is doing over 70,000 units a month with the Discover 135 making up the balance. Bajaj Auto's comeback script this fiscal began with the launch of the new Pulsar in the first quarter followed by the 100cc Discover in the second and the 135cc Pulsar in the third. No new launches have been scheduled in the January-March period but the first quarter of 2010-11 is likely to see another new motorcycle making its debut. While Mr Bajaj did not comment on what this vehicle was likely to be, market grapevine suggests that it could be a new Discover version which is keeping in line with the company's focus on these two brands (the Pulsar being the other) as key growth drivers. We have reinvented our marketing strategy and this has been validated by the growth in market share thanks to the Pulsar and Discover. The key lies in specialisation especially when it means addressing a bigger market, Mr Bajaj said.

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Had the company been present only in a couple of States in India, Mr Bajaj averred, it would have had an array of products in the two-wheeler space. On the other hand, the product portfolio would have been trimmed to scooters and motorcycles for a bigger canvas like India, and narrowed down even further to only motorcycles for the global arena. This is precisely what Bajaj Auto has done today given that its international business is an important part of its overall strategy. Sacrifice is a key part of strategy and is essential to its success. Hence, our scooters had to make way for motorcycles, Mr Bajaj said, referring to the reaction across the country to his recent statement on exiting the scooter segment. Brand positioning Similarly, the company also learnt that divergence was another important part of its focus on specialisation, with the Discover clearly positioned for the commuter segment and the Pulsar as the sporty' option. The features, therefore, had to be exclusive for each brand in terms of looks and ride while ensuring profitability. From Bajaj Auto's point of view, the commuter and sporty segments are the backbone of India's motorcycle market. And even while it has bikes to offer from the KTM and Kawasaki stable, these largely remain in the niche category as off-road and on-road performers translating into limited numbers. As Mr Bajaj said, an effective strategy was finally about strong brand positioning at the front-end while keeping things simpler at the back-end comprising design, manufacturing and development.

MARKET SPEND

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The above graph shows the market spend for Bajaj Auto. It has taken the data for three years to see the trend in the spending. As seen from the graph, the expenditure for forwarding, freight and packaging has been increasing over the years and especially for the year 2008-09. This may be due to the fact that in the last 2 years: Bajaj sales from the export market increased by 31% whereas the domesticsales fell by around 23%. Hence, the transportation costs etc. shoot up due to the exports. Bajaj focused more on executive and premium bikes which are transported in small lot sizes and the packaging etc are more sophisticated thus resulting in high forwarding, freight and packaging costs. The advertising costs for the year have sharply fallen in the year 200809. It is mainly due to the recession that the company has cut down on these costs. The major saving was done on the print ads and hoardings. The sales promotion expenses have fallen in year 2007-08 and again increased in year 2008-09. The increase in year 2008-09 is because Bajaj has forayed into premium bikes, which is a new segment in India, and was backed by heavy sales promotions to boost the sales.

The above graph shows the percentage breakup of the three components. The highest cost is the forwarding, freight and packaging, followed by advertising expenditure and sales promotion expenditure. The graph shows the advertising and sales & expenditure costs as a percentage of sales.
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From the above graph it can clearly make out that Bajaj Auto relies more on its sales& distribution. Hence, it can be safely concluded that Bajaj Auto focuses more on the push factor for its sale.

GLOBAL PRESENCE OF BAJAJ

Bajaj Auto continues to be Indias largest exporter of two and three wheelers. During 2008-09, the company exported 772,519 two and three-wheelers recording a growth of 25 percent over 2007-08.Exports now constitute 37 percent in terms of volume and 35 percent in value of net sales. The company currently exports to over 30 countries in Latin America, Africa, the Middle-East, South and South-East Asia. Bajaj Auto has a dominant presence in the countries of Sri Lanka, Columbia, Bangladesh, Central America, Peru and Egypt, and is looking to increase its share in the African market. The company has commissioned an assembly unit in Nigeria with the help of its distributor, to cater to the growing demand in the African markets. It already has an assembly plant in Indonesia and is looking at setting up a plant in Manaus, a Free Trade Zone, in Brazil by 2010-11, after delaying the decision for six years. A distributor of Bajaj Auto has a plant in Egypt. They are also planning to set up plants at Columbia and Iran.

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CORE COMPETENCIES
Bajaj Auto is one of the oldest and the second largest two wheeler manufacutrer in India. In addition to coping with fierce competition from other players in the two wheeler segment, it also has to protect its market share from the impending onslaught of low price small cars such as Tata Nano. Holding on to its postion in such a challenging market environment requires innovative strategies and deep understanding of consumers needs. Bajaj Auto, sitting on surplus funds of over Rs 7,000 crore, was inundated with offers to diversify from telecommunications and power generation to software but stuck to core business of automobiles. Mr Bajaj said that any company, which wants to survive, must have quality and service orientation. The automotive sector was in its death throes with some of the major American automotive manufacturers on the verge of bankruptcy, he said. There are several reasons why Bajaj should concentrate on its core segment, i.e. greater than 125cc segment. With the introduction of DTS-i and DTS-Fi technology, Bajaj Auto Limited has led the way in pioneering technology along with style. The Profitability Pyramid in Exhibit 4 shows that the margin is very low in the sub-125cc segment but volumes are high. BAL wants to shift users from 100, 115cc segment to 125cc and higher. Thus Bajaj not only wants
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to play on the margins but also wants to increase the market share of 125cc bikes. With its recent launch of XCD 125cc, it has brought in competition for its own 100cc model, Platina by delivering a bike that is better in all respects (including fuel efficiency).

Thus, we conclude that Bajaj wants to make a slow departure from 100cc segment. It has already stopped production of the Discover 125 and will continue production of the Platina until the demand for the 100cc remains. It has priced the XCD between the Platina and the Discover and in the future, would ideally wish to project the XCD 125 as its base model.

SUPPLY CHAIN MANAGEMENT

Vendors
Bajaj Auto has a consolidated base of 180 vendors supplying components to all Bajaj Autos plants. A large number of vendors are located either near Pune or Aurangabad. Those that are far are encouraged to tie up with third party logistics providers, who along with local vendors supply multiple deliveries daily to Chakan & Waluj plant. Bajaj Auto has extended the TPM (Total Preventive Maintenance) to vendor as well. Around 60% by value of Bajaj vehicle is outsourced. Virtually no components are imported & 70% of Bajaj Autos requirements are sourced from within the state of Maharashtra. To improve quality, Bajaj Auto has also begun actively assisting its suppliers in finalizing joint ventures with counterparts in Japan, Italy, Taiwan & Spain.

Dealers-

Bajaj Auto has a network of 422 dealers and over 1,300 authorized service centers. The company plans to increase the number of dealers to 500 by this financial year. A large number of these new dealerships are planned in semi-urban & rural areas. During the financial year 2007-08, the company extended BASS (Bajaj Auto Service Standard) to standardize the workshops of 250 dealers & 50 authorized service centers. These programmers included a uniform
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external & internal look. This initiative has improved work hygiene, promoted consistent & better service quality, & greater productivity. Faster turnaround of serviced vehicles coupled with higher spare parts sales in converting such workshops into independent profit centers for the dealers.

Management of Global Supply Chain

With operations spanning to such vast geographies, managing a supply chain globally becomes more and more complex. In countries where Bajaj perceives a strong market potential, they establish a tie up with one major industrial establishment eager to invest in the project. This investment may include setting up strategic manufacturing or assembly units, apart from a well-established nation-wide network for marketing, distribution and after sales services. These investors who form alliances with Bajaj Auto are termed as Business Partners. Bajaj Auto offers a number of services to its business partners. They include: Training in sales, service and spare parts management based on the Bajaj distribution system. Active support for setting up manufacturing facilities overseas including transfer of technical know-how. Assistance in setting up an assembly plant for assembly of vehicles from complete knocked down (CKD) kits. Selecting of machinery and equipment and training of technical personnel, all in a phased manner as required by the regulations in the recipient country. Active support in setting nation-wide dealer network, also involving identification and recommending suitable partner who would assist the distributor in Business growth.

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FINANCIAL ANALYSIS OF BAJAJ AUTO

Liquidity and Solvency ratios This ratio suggests the short-term liquidity position of the firm. The following ratios are to be calculated. (i) Current Ratio.

Analysis:-Current ratio is higher in 2009 as compared to 2008. There is decreased all current assets except other receivables which increased in 2009. The net current assets increased by Rs.238.62 cr. in 2009 and at same time current liabilities increased by Rs.200.9 cr. in 2009. It means Bajaj Auto Ltd., has sufficient current assets to pay current liabilities. Short term solvency of the company is satisfactory. (ii) Acid Test Ratio.

Analysis:-We have seen that the company had a higher current ratio in 2009 and was able to meet its short term obligations as compared to 2008. Where as the quick ratio identifies the role played by the inventories in this context. Therefore the ratio shows that in year 2009 it has increased as compared to 2008 due to the fact that the quick assets is increased by Rs.164.14 cr. only and current liabilities have increased by Rs.583.12 cr. The company is able to meet its short term obligations.

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(iii) Debt Equity Ratio

Analysis:This ratio says that both year 2008 and 2009 as same. In 2009 increased debt by Rs.236 cr. That is increased in Debenture, Long Term loan, Redeemable Preference shares. And equity means Equity share capita, Preference shares other than redeemable, Reserves and surplus, Losses and Fictitious assets increased by Rs.282.1 cr. in 2009 tear. (iv) Inventory Turnover Ratio.

Analysis:The inventory turnover ratio in the year 2008 was 28.19 which indicate that 28.19 times in a year the inventory of the firm is converted into receivables or cash. However, in 2009, the inventory turnover ratio slightly decreased to 27.47. This was due to the fact that the Bajaj Auto Ltd. in 2009 invested more then 0.72 times the inventory in 2008. (v) Fixed assets Turnover.

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Analysis:According to the calculations above the productivity of fixed assets in year 2009 is not better than it was in previous years. In 2008, it was 1.79% and now it has been slightly decreased to 1.51%. This change was brought about by decreased in total sales by Rs.126.98 cr., where as the fixed assets increased only by Rs.845.84 cr.

Recent News on Bajaj Auto

Bajaj-Renault-Nissan to drive small car (ULC) Bajaj Auto has redrafted its bike strategy for this fiscal that will see the Pulsar and Discover act as the key growth drivers. The script goes according to plan, it has have set ourselves a target of 200,000 units from both brands by March 2010. Bajaj Auto and the Renault-Nissan Alliance to build the car code- named ULC with wholesale price range starting from 2500 USD. All this is part of a renewed thrust by the company to focus on two key requirements of the market which, over the years, have pretty much remained constant for either fuel-efficient commuter bikes or sporty, powerful products. The Discover has now been positioned to fulfill the former need in a segment where Hero Honda reigns supreme while the Pulsar has established itself in the sporty slot, with monthly sales of over 40,000 units.

Bajaj Auto Ltd has announced that the company may launch a small car in the year 2010 in India. The second largest two wheeler maker in India will enter the small car segment in partnership with French car giant Renault and Nissan. The small car prototype was unveiled today and the company wants to promote the vehicle as economical and affordable car.

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The Bajaj Autos car will be expensive as it will meet safety and emission norms. The standard version will come with an air conditioner.

Bajaj Auto Ltd = 50 per cent

Bajaj Auto, which is yet to sign a joint venture agreement with its partners, Renault and Nissan. The ULC project was conceived as a threeway alliance where Bajaj would hold 50 per cent equity.

Renault = 25 per cent Nissan = 25 per cent

The ULC project was conceived as a three-way alliance where Renault would hold 25 per cent equity. The ULC project was conceived as a three-way alliance where Nissaan would hold 25 per cent equity.

Bajaj Auto, which is yet to sign a joint venture agreement with its partners, Renault and Nissan. The ULC project was conceived as a threeway alliance where Bajaj would hold 50 per cent equity with Renault and Nissan accounting for 25 per cent each. Bajaj-Renault-Nissan will miss its 2011 deadline on its ultra-low-cost car project. Bajaj Auto managing director Rajiv Bajaj has ordered that the work done so far on the project be scrapped and has demanded major modifications on design, positioning and other details, according to a person familiar with the development.

Bajaj Auto Launches RE600 Cargo Vehicle

Bajaj Autos R&D team has created this unique product to deliver the highest mileage and lowest operating costs in the commercial 3-wheeler category. RE600 offers best in class mileage which is at least 5 km per liter of diesel more than other vehicles. It has a robust solid construction and comes at an attractive price point which makes for the lowest cost of ownership. RE600 is priced at Rs.1, 03,686. The RE 600 is being launched phase wise across the country from September 2009 onwards. Advantage of RE600: The RE 600 is specially conceived and developed for cargo movement in congested cities & towns.

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 It has the lowest turning radius for high maneuverability even on narrow roads, has twin front suspension. A spacious cabin for comfortable long hrs of drive. It has high torque for quick pick-up even with heavy loads and has ease of frequent and quick start-stop cycles. Making it the best suited vehicle for in-city operations. The RE 600 has thus created a new category in the small commercial vehicle segment.

Bajaj Auto to launch Kawasaki Ninja:

The Ninja 250R is considered to be an entry-level sports bike manufactured by Japanese two-wheeler maker Kawasaki. The motorcycle would be priced between Rs 1.50 lakh and Rs 2 lakh in India. Till the mid of this year, four models of Kawasaki Ninja 250, sports roadster ER-6n, super sports bike Ninja ZX6R. Ninja model is the most popular model in US, Europe and Japan. Bollywood star John Abraham had used this bike showing some unbelieving stunts in super-duper hit movie Dhoom. Since then these bikes became the dream bikes for many sports bike lovers. Ninja-250 is a very powerful bike containing an eight-valve DOHC, liquid-cooled 250cc fuel injection engine that develops 30bhp of peak power with attached a six-speed gearbox. It generates 30 PS at 10,500 rpm. Its 6-speed transmission makes it a versatile performer. Kawasaki is Bajajs reliable technical partner since mid 80s and promised to assist Bajaj in all technical aspects with providing the necessary service training and parts back-up while Bajaj auto will handle the distribution and marketing department.

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Bajaj to stop scooter production, focus on motorcycles

The jingle promised that it would stay with us for today and tomorrow as a Strong Symbol of a Strong India, and two generations grew up humming the tune. But finally when the India of the license-permit raj gets to take its seat at the global high table, the Scoters that got us there is fading away. Bajaj Auto announced on Wednesday that it is exiting the scooter segment altogether, bringing the curtains down on its iconic product line. The company had stopped making the Chetak, once the worlds largest selling scooter, almost three years ago, and according to its MD Rajeev Bajaj, it will stop production of its non-starter Kristal series by end of the current fiscal. This is a definite watershed moment, because its almost like detaching ourselves from what constitutes middle class India, and the set of values that constituted middle class India, says Santosh Desai, MD and CEO of Future Brands and a marketing and advertising expert.

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Recommendations
The impression of Bajaj in the minds of the public is that it is a moped & athree-wheeler company, & it is a very orthodox & unhappening image in the minds of the youth. It should use a powerful brand ambassador & individual whom the youth can relate with. It should aggressively market itself as a motorcycle company & move from its traditional mindset (Rahul Bajaj had once stated that he had only one department in his company the dispatch department & that he did not require a marketing department.) Bajaj should aggressively push sales of higher margin products & launch new products in niche segments. Bajaj should also try & push for tie-ups & Joint Ventures in foreign market & try & increase its export base. (E.g. Tata Motors tie-up with Rover for marketing of India & Joint Venture with Senegal government for manufacturing trucks & commercial vehicles.) Bajaj should look for possible mergers & acquisitions. (E.g. Maharashtra Scooters) & try & improve its distribution network & provide it with products in niche segments & help increase production capacity & provide economies of scale. Increase its dealer network to tap rural growing markets by going in for tie-ups & offering better margins to dealers. The key to Bajaj real success lies in Research & development. How it is able to use value analysis & value engineering by adding new features to its existing product line & how it is able to come out with new product for different niche markets. Analysis of different alternatives like outsourcing, inhouse, purchase & tie-up should be evaluated.

BIBLIOGRAPHY
WWW.GOOGLE.COM WWW.BAJAJAUTO.COM WWW.DOCSTOC.COM WWW.MONEYCONTROL.COM

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