1

FY10 TOTAL Total 2Wh's UNITS 3 Wh's Total Units Motorcycles 2,506,791 2,511,643 340,937 2,852,580 FY10 Domestic Total 2Wh's Units 3 Wh's Total Units Motorcycles 1,781,768 1,785,528 176,050 1,961,578 FY10 Export Total 2Wh's Units 3 Wh's Total Units Motorcycles 725,023 726,115 164,887 891,002

FY09 1,907,853 1,919,625 274,529 2,194,154 FY09 1,276,470 1,286,162 135,473 1,421,635 FY09 631,383 633,463 139,056 772,519

Gr. 31% 31% 24% 30% Gr. 40% 39% 30% 38% Gr. 15% 15% 19% 15%
2

Domestic motorcycle market

Units Bajaj Total H1 Gr. H2 Gr. 744,000 -5% 3,521,000 15% 1,038,000 109% 2,781,000 23% 3,819,000 38%

Others 2,777,000 22%

Market share for motorcycles in domestic market improved from 21% in H1 / FY10 to 27% in H2 / FY10

Financial Results ( Rs. in crores )

Particulars Net Sales Other operating Income Total Income Expenditure Material ( net ) Employee cost Other expenditure Total expenditure EBITDA % Interest Depreciation Operating Profit % Other income ( net ) Exceptional items : Expenditure incured on VRS Loss on derivative hedging instruments Profit before tax Tax Profit after tax Earnings per share 183 -22 2411 708 1703 117.7 183 22 958 302 656 45.2 160% 152% 8055 400 874 9329 2592 21.7 6 136 2450 20.6 122 2572 6449 354 805 7608 1202 13.6 21 130 1051 11.9 112 1163 121% 133% 23% 116% FY10 11509 412 11921 FY09 8437 373 8810 35% Growth

M at er ial co st Qt r Q1 Q2 Q3 Q4 F ull year % 66.2 66.2 68.5 69.3 6 7.7

Ot her exp end it ur e Qt r Q1 Q2 Q3 Q4 F ull year % 9.5 8.1 6.7 5.3 7.2

EB IT D A Qt r Q1 Q2 Q3 Q4 F ull year % 19.5 22.0 22.0 22.9 2 1.7

3

Summarized Cash flow

Rs. in crores Cash and cash equivalents Opening balance Closing balance Net change during the year Earned from operations and treasury Outflow : CAPEX Investments : PTBAI & KTM Income tax Dividend Working capital and others Total outflow Net change 117 83 700 372 (872) 400 2330
4

FY09

933 3263 2330 2730

MOTORCYCLES

INDEX
Industry Analysis and Projections Category Projections Bajaj Performance Brand Strategy New Initiatives and Outlook for the Yr 2010-11

INDUSTRY ANALYSIS AND PROJECTIONS

* 7

INDUSTRY 15 year Trend Forecast for next 3 years Growth Drivers

INDIAN MOTORCYCLE INDUSTRY (DOMESTIC + EXPORTS)

Motorcycle Industry Volumes (Yearly Total)
9,000,000

Yearly Total
8446591

8,000,000

7091545
7,000,000

6201389
6,000,000

6544649

6805366

5217995

5,000,000

4,000,000

4312751 3756409

3,000,000

2861061 2033147 1612895 1176779 802266 913956

96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10

2,000,000

1,000,000

DOMESTIC MOTORCYCLE INDUSTRY

Yearly Total
8000000 50%

46%
7000000

7340417
40%

6586443
6000000

34% 5826678 24% 15% 21% 4725996 13%

10%

5826816 5756927 26%

30%

5000000

23%
20%

4000000

3898751 3396409

3000000

2537061
2000000

1%

0%

1733147 1396895
1000000 -10%

-13%
-20% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Volume

Growth

Y-O-Y
10

MOTORCYCLE DOMESTIC INDUSTRY PROJECTIONS

12000000 10000000

Yearly Total
10,476,596 (13%)

9,259,922 (14%)
8000000

8,140,816 (11%) 7,340,417 6,586,443

6000000

5,826,678 5,756,927 4,725,996

5,826,816

4000000

3,898,751 3,396,409

2000000

2,537,061 1,733,147 1,396,895

0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

11

GROWTH DRIVERS (YR 2010-11)

GDP
8.5%

Consumer Confidence
55% are Rural
Crop Production (expected was 260 MT vs Actual near to 230 MT) MSP (Major Crops Y-O-Y)
Sugarcane (33% hike) Paddy (11%) Wheat (8%)

Rain (Quantity, Time and Spread)

45% are Urban and Semi Urban

Salary rises

12

CATEGORY PROJECTIONS

13

CATEGORY SHARE PROJECTIONS

80%

61%
60%

64%

55%

59% 59%

56%

65%

Commuter Deluxe
49% 48%

52%

44%
40%

43% 36% 33%

44%

38% 31% 25%

Commuter Standard

20%

19% 10% 12% 14% 17%

19% 16%

6% 2%
0% FY 2001-02 Fy 2002-03

8%

8%

9%

Sports
FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

Commuter Std

Commuter Deluxe

Sports

14

CATEGORY VOLUME PROJECTIONS (MA)

Segment Volumes
500000

440961
400000

Commuter Deluxe 391656 299110

300000

286476 234738 179196 129166 208899 199079 214524 172275 117391 102713 4036 109109 17987 26901 32698 43663 55568 209422

271616

200000

Commuter Standard 150622 120184 59500 67714 Sports 118263 108544 102449 128896

100000

0 FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

Commuter Std

Commuter Deluxe

Sports

15

BAJAJ PERFORMANCE

16

BAL PERFORMANCE Overall Category Wise

17

OVERALL (MA)
Overall
750000 35.0%

31% 30%
600000

30% 551467

29% 487008

611679

30.0%

23.0%
450000

24%

24% 492925 481738 353190 404052

24% 22%

25.0%

20.0%

306293
300000 15.0%

235916
150000

10.0%

137587 54292 72164 85303

0.0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 BAL FY 2006-07 MS% FY 2007-08 FY 2008-09 FY 2009-10

120807

145578

173242 106369

148479

5.0%

Industry

18

COMMUTER STANDARD (MA)

Commuter Standard
250000 50%

44%
200000

214524 209422 38% 36% 39% 38%

45% 40% 35%

40%

41%

33%
150000

172275 150622 30%

30%

117391 109109
100000

118560 25% 120184 76178 78135 81245 57066 45169

15% 10% 20%

102713

50000

44583 41411 39050

35506
0 FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 Industry FY 2005-06 BAL FY 2006-07 MS% FY 2007-08 FY 2008-09 FY 2009-10

5% 0%

19

COMMUTER DELUXE (MA)

Commuter Deluxe
500000 25%

400000

20% 18% 15%

390892

20%

17% 299110 286476 271616 11%

15%

300000

208899
200000

11% 199079

234738
10%

9%

179196 10% 7%

100000

129166 35978 12269 21343 21448 56131 48148 32374 66366

5%

11867
FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 Industry FY 2005-06 BAL FY 2006-07 MS% FY 2007-08 FY 2008-09 FY 2009-10

0%

20

SPORTS (MA)
Sports
150000 100%

93%
90%

85%
80%

72% 102447
100000

71%

65% 54% 67714 59500 43%

70% 60% 50%

46%
40% 30%

50000

55568 25% 26901 17987 24910 4036 15312 1014

FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 Industry FY 2005-06 BAL FY 2006-07 MS% FY 2007-08 FY 2008-09 FY 2009-10

43663 32698 31465 23181 35865 32373 28825

46607
20% 10% 0%

21

PORTFOLIO COMPOSITION
90.0% 80.0%

76%
70.0%

76%

Discover + Pulsar
60.0%

62% 54%

63% 54% 46% 37% 53% 47%

59% 58%

50.0%

46%
40.0%

42% 38% 41%

Platina + CT 100
24%

30.0%

24%
20.0%

10.0%

0.0% FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 Discover + Pulsar FY 2008-09 FY 2009-10

Platina + CT100

22

BRAND STRATEGY

23

TWO BROAD MOTORCYCLE SEGMENTS

Commuter
Share of the Market Target Group Geography Available Offerings 83% of the Market Middle age, Middle class Semi-Urban , Rural Frugal, utility and value offerings

Sports
17% of the Market

Youth Mainly urban Premium, stylish and feature rich bikes with loads of excitement value

24

BRAND STRATEGY

Commuter : Discover Sports : Pulsar

25

DISCOVER ATTACK STRATEGY

26

Bajaj Idea
To upgrade the commuters to experience Bigger & Sportier bikes.

27

Two step upgradation plan

Upgrade 1 : Feature upgradation Discover 100 Upgrade 2 : Experience upgradation Discover 150

28

Upgrade 1 : Feature Up-gradation

29

FEATURE UP-GRADATION :DISCOVER 100

30

THE CONSUMERS WERE EXCITED.

Making new High

VOLUME

MONTH

6 Lacs Discovers sold in record time of 250 days. The Fastest growing bike ever.
31

REASONS BEHIND SUCCESS OF DISCOVER 100

DTS-Si Engine On-road mileage of 80 Kmpl Long Wheelbase Nitrox Suspension 5 Speed Gear Box Electric Start

All these at a price of Rs. 41736 : An unbeatable value for money

32

Attains new milestone in April 10 Discover becomes The 2nd largest selling brand

33

And now.

Upgrade 2 : Experience Up-gradation

34

EXPERIENCE UP-GRADATION : DISCOVER 150

35

DISCOVER 150 : EXCITEMENT PER LITRE

145 cc DTS-i Engine On-road mileage of 65 Kmpl Disk Brake Dark Tone Sporty Graphics Wider Rear Tyres

All these at a price of Rs. 46000 (Ex-showroom Delhi)

36

PERFORMANCE CHECK AGAINST KEY COMPETITION

Discover 150 Engine CC Max Power [Ps @ rpm] Max Torque [Nm @ rpm] Wider tires Gears Price (Ex showroom Delhi) 144.8cc 13.0 @ 7500 12.75 @ 5500 Yes 5 Shine 124.6cc 10.4 @ 7500 10.78 @ 5500 No 4 Passion Pro 97.2cc 7.8 @ 7500 8.04 @ 4500 No 4 Glamour 124.7cc 9.0 bhp @ 7000 10.35 Nm @ 4000 rpm No 4

Rs 50,787/Rs 44,800/Rs 48,250 /Rs 46,000/Elect. Start + Alloy Elect. Start + Alloy Elect. Start + Alloy Elect. Start + Alloy wheel + Disc wheel + Disc wheel + Drum wheel + Disc brake brake brake brake
37

PULSAR DEFENSE STRATEGY

38

PULSAR : DEFENSE STRATEGY

Up the Benchmark
Fastest Indian : Top Speed 145 km/hr Pulsar Stunt Mania

Expand the Category

Pulsar 135 LS

39

PULSAR VOLUME
70000

65002
60000

63353 61687

52022
50000

55022 49437

41663
40000

44349 39214 38013

35328
30000

38194 24233

20000

10000

0 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10

40

MAJOR INITIATIVES AND OUTLOOK FOR YEAR 2010 11

41

MAJOR INITIATIVES
Actions 1. New Products Discover 100 Pulsar 135 LS Platina 125 Discover 150 2. Quality Oil Frequency Reduction (From 5000 Km to 10000 Km) Service Frequency Reduction (From 2500 Km to 5000 Km) 3. Network Dealers Expansion (10% increase) Secondary network Quality up gradation (RSOs to ASCs) 4. Brand Twin Brand Strategy

2009-10 a a a

2010-11

a a a a a a a a

Pulsar

a a a

a a a
42

Discover 5. Customer Finance (Direct Cash Collection) 850 ASCs offer DCC model

OUTLOOK FOR YR 2010 11

Industry Estimated to grow at 11% to 15% Discover 150 will further grow our Commuter Segment market share Pulsar market share will continue to be 50% + Discover - Pulsar proportion will continue to grow in Bajaj Domestic Portfolio

43

COMMERCIAL VEHICLE BUSINESS

44

Growth Drivers & characteristics - SCV Industry

SCV Industry
9.00 8.00 7.00 3.01

Growth at 13%
CAGR Drivers GDP growth, Hub & Spoke model, Poor public transport, Replacement triggered by availability of alt. fuel
No of Veh (Lacs)

6.00 5.00 4.00 3.00 2.00 1.00 0.00 Cargo Pass 2.50 2.54 2.99 1.44 1.96 5.36 3.33 3.50 3.97 2.33 3.05 2.94 2.34

2003-04 1.44 2.50

2004-05 1.96 2.54

2005-06 2.33 2.99

2006-07 3.05 Year 3.33

2007-08 2.94 3.50

2008-09 2.34 3.97

2009-10 3.01 5.36

4Wh 45%

3Wh 55%

Passenger Growth at 15% CAGR Primarily a rural people mover Long trip distance

Cargo Growth at 30% CAGR Versatile vehicle suitable for both intra and inter city

Passenger Growth at 13% CAGR Growth driven by diesel/Incity passenger

Cargo De-Growth at -3% CAGR Affected by launch of a more versatile vehicle

45%

55%

81%

19%
45

COMMERCIAL VEHICLE BUSINESS

Principal application of 3 wheelers/Like

There are three distinctly different applications, currently needing different value propositions and catering to distinctly different customer segments and hence needing different strategies
Segment In-city Primary uses Home-OfficeHome Shopping School children Home-Railway station/AirportHome Stage coach Fuel used Petrol/LPG/CNG BAL position Leader about 90% market share Forecast 3yr CAGR 10%

Rural

Diesel

23% market share

11%

Cargo

Wholesaler to retailer Retailer to end user Distribution

Diesel/ CNG

Marginal presence

-6%

COMMERCIAL VEHICLE BUSINESS

46

In city
Non - AC AC

Rs / Km

Call Taxi

1.5

2.5

3.5

4.5

5.5

6.5

7.5

8.5

9.5 10 10.5 11 11.5 12 12.5 13 13.5 14 14.5 15

Auto rickshaws offer an economical transportation to people They make a good value proposition to all stake holders
Attractiveness to operators/users Attractiveness to transport and city planners Attractiveness to Environmentalists

COMMERCIAL VEHICLE BUSINESS

47

In city (cont)
Opportunities
Heavy traffic congestion on city roads. Greater realization of the need for sectoral reforms among policy planners. Growth of population Growth of cities Resource limitation in expanding bus fleet and/ or providing other means of mass transport. CNG availability in more cities towns leading to a huge replacement/Fresh demand.

BAL Plans
Set & raise industry standards of excellence in products, service, quality and innovation Wider product range RE 145 family, RE 205 family (07 products) Investment in technology development and emission management --- GDI, CNG and LPG versions optimized for use with alternate fuels and not merely tuned to run on alternate fuels Cutting down on dead weight further by optimized engineering and use of alternate materials.

COMMERCIAL VEHICLE BUSINESS

48

Rural -- Current vehicle usage

Magic 14 + No of Pass. Carried (avg) Jeeps

12

RE 445 L Ape

Jeeps Magic

RE 445 L
10 8 6 RE 445 D Ape Magic RE 445 M Ape

RE 145/205 <10

<20

30 Trip Distance

40

>60

Small 3WH are used for distances < 10 KMs & upto 8 passengers Larger 3+1 3WH are used upto 30 KMs lead & upto 12 passengers Magic/jeeps is for longer leads (40 60 Kms)
COMMERCIAL VEHICLE BUSINESS
49

Rural Passenger
In suburban and rural areas 3W are primarily used as substitutes for buses. They thrive because of very poor public transport (Poor Frequency Impatience?) and on shorter trip distances. They carry from 6-15 passengers. Availability of passenger per trip decreasing as population of 3w increasing They compete with host of substitute products doing the same thing i.e. act as substitute for buses eg. jeeps etc. Success here in future would depend on providing a vehicle with right space for, keeping costs low, best fuel efficiency reasonable revenue to give highest earnings under the given operating conditions.

COMMERCIAL VEHICLE BUSINESS

50

Rural (cont)
Opportunities
Inability of State Governments to provide the required number of buses Lack of political will to privatize public transport and free up fares Increasing number of three wheelers on these routes bringing down load availability from 10-12 to 6-8 people for 80% of the trips. Lack of connectivity from villages to highways leading to a need for feeder vehicles.

BAL Plan
Use the RE equity to gain leading market share over a two year time frame. Developed and launched LPG/CNG versions of RE445M products to be ready when environmental concerns spread to upcountry markets.

COMMERCIAL VEHICLE BUSINESS

51

BAL Marketing plans Brand and Identity

RE to stand for MORE ( Product portfolio upgraded/created new, First to meet Emission norms effective 1st april )
More mileage More space More earnings More comfort More service points More customer facilitation

Beginning FY 11 we will building the brand RE so customers start associating it with MORE of all they seek. New CI

COMMERCIAL VEHICLE BUSINESS

52

Marketing plans -- Access

An expansion of network being implemented
2009-10 Dealers Dealer branches Sales outlets ASCs/CSTs 152 327 265 384 2010-11 183 403 329 630

COMMERCIAL VEHICLE BUSINESS

53

Marketing plans -- Financing

A sharp focus on making competitive finance options available to our customers
2009-10 Nationalized Banks Dealer funding (No. of dealers) 25% 10 2010-11 35% 20

COMMERCIAL VEHICLE BUSINESS

54

The CNG boon

Rapid progress in in the CNG Pipeline. Over 100 City Gas Distribution (CGD) contracts awarded and under implementation. Huge replacement potential BAL best placed to exploit the huge replacement demand that would inevitably be created

CGD contracts awarded

COMMERCIAL VEHICLE BUSINESS

55

BALs view of the future of 3W passenger business

3W passenger business will grow at a healthy rate 3W passenger vehicles will play a significant role in people movement in both In-city and rural segments Growth will be triggered and sustained due to following favorable factors:
Emission concerns will force policy makers to acknowledge and recognize the favorable emission values, more specifically the green house gases, of the Autorickshaw. There is no substitute for a cheap and economical mode of transport in a heavily layered socio-economic structure as in India. Heavy traffic congestion and the lack of resources and space for roads in most Indian cities will force city and traffic planners to relook at strategy for urban mobility, Public transport like metro trains and buses to be supplemented by last mile transportation mode like 3w..

COMMERCIAL VEHICLE BUSINESS

56

Summary of BALs medium term strategy for CV business

We will stay focused as specialist on the passenger segment. We see this product category continuing to play a significant role in people movement both in Cities/towns and short distance inter-town because of the values and compulsions enumerated earlier. We intend to continue our domination of In-city segment In the rural passenger movement, we intend to gain significant market share through a combination of product and marketing initiatives. Making finance available at competitive interest rates

COMMERCIAL VEHICLE BUSINESS

57

AN IDEA WHICH PROVIDED MOBILITY TO INDIA WILL NOW ALSO GREEN INDIA!!

CLEAN MACHINE

THANK YOU
COMMERCIAL VEHICLE BUSINESS
58

International Business

59

Volume Trends
1,000,000 900,000 800,000 700,000 600,000 Volumes

Overall CAGR- 37% CAGR-26%

CAGR-38%
500,000 400,000 300,000 200,000 100,000 0 2002-03 MCY CV TTL 53,366 40,875 94,241 2003-04 90,210 65,797 156,007 2004-05 130,949 65,767 196,716 2005-06 174,923 75,447 250,370 2006-07 301,775 140,645 442,420 2007-08 482,030 136,315 618,345 2008-09 633,463 139,056 772,519 2009-10 726,115 164,887 891,002

60

FY 10 Performance
Region Wise Product Wise
38%

9% Africa & ME LAmerica 51% S Asia SE Asia 15% 23%

19% Boxer Discover Pulsar M/C Others CV 8% 12%

25%

Category M/C CV Total

2009-10 726,115 164,887 891,002

Growth 14.6% 18.6% 15.3%

61

Addressed Markets
Region Wise Competition Wise

6% 18% 37%
AFRICA Middle East LA

18%

15%

Bajaj Chinese Japanese

20% 19%

SE ASIA SOUTH ASIA

67%

Africa & ME Contribute 56% of the market

Chinese motorcycle has 67% of the world market

62

Note: China/ Non EU /Brazil/Pakistan markets have not been included

International Business Approach

Africa
Deeper penetration through exclusive sales network Ensure after sales reach and repairability Build Boxer brand Develop new markets for CV

Asia
Defend high shares. Drive growth through penetration in Bangladesh Indonesia : rejig portfolio with Pulsar 135. Reposition Pulsar brand.

Latam
Focus on Pulsar and Discover brands Selectively strengthen routes to market

Invest in last point capability Develop strategies for larger new markets
63

Thank you

No part of this presentation is to be circulated, quoted, or reproduced for any distribution without prior written approval from Bajaj Auto Limited, Mumbai-Pune Road, Akurdi, Pune-411 035, India. Certain part of this presentation describing estimates, objectives and projections may be a forward looking statement within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied. This material was used by Bajaj Auto Limited during an oral presentation; it is not a complete record of the discussion.
64