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INDEX Chapter 1 NAME Company history Origins Completion in 1990 End of licence raj New toola in 1990 Product

duct profile and performance Motorcycles Three wheelers Overall performance Financial analysis Strategic analysis 3 Mission vision and values Logo Swot Porter five forces model Managerial style 9 10 12 14 PAGE NO 3 4 4 5 6 financial 8

18 19 20 21 23 24 25 26

Business streategy Other strategic issue Supply chain analysis Value chain Subsidiary Spare part division CORPORATE RESPONSIBILITY THE FUTURE RECOMMENDATIONS BIBLIOGRAPHY

27 28 30 31 SOCIAL 32 AND 36 41

5 6 7

CHAPTER ONE COMPANY HISTORY ORIGINS COMPETITION IN 1980 END OF LICENSE RAJ NEW TOOLS OF 1990S PRODUCT REVAMP IN 2000S

BAJAJ FINANCE HISRORY

Bajaj Auto Finance Ltd. (BAFL) was incorporated as a Private Limited Company on 25th March, 1987. It became a deemed Public Limited Company by virtue of Section 43(A) of the Companies Act, 1956 w.e.f., 20th October, 1987. Initially BAFL was promoted by erstwhile Bajaj Auto Limited and Bajaj Auto Holdings Limited. Bajaj Auto Limited is the largest manufacturer of two and three wheelers in the country and Bajaj Auto Holdings Limited is an investment company and is a wholly owned subsidiary company of Bajaj Holdings & Investment Limited. As per the Scheme of Demerger of erstwhile Bajaj Auto Limited, the shareholding of Bajaj Auto Limited in BAFL has been vested with Bajaj Finserv Limited. BAFL is an NBFC registered with RBI and authorised to accept public deposits. Consequent to the re-classification of NBFCs by RBI, BAFL has been re-classified as an Asset Finance Company (Deposit Taking). BAFL is engaged primarily in the business of financing of two wheelers, consumer durables, personal computers, personal loans etc. BAFL made a Public Issue of Equity Shares in 1994 and its Equity Shares are listed on Bombay Stock Exchange Limited and National Stock Exchange of India Limited.

BAFL made a Preferential Issue of Equity Shares to the Promoters and a few foreign corporate bodies and also warrants to the Promoters in 2006. BAFL made a Rights Issue of Equity Shares and Non-Convertible Debentures with detachable warrants to the existing shareholders in 200607. The present Paid-up Capital of the Company is Rs.365,960,760/BAFL has its headquarters at Pune and has more than 50 branches spread across the country ABOUT BAJAJ FINANCE

Bajaj Auto Finance Limited was incorporated on March 25, 1987 as Bajaj Auto Finance Private Limited got converted into a public limited Company w.e.f. September 24, 1988 The company is registered with the RBI as a Non Banking Finance Company (NBFC) with effect from March 5, 1998

The Company primarily deals in the financing consumer durables, personal and small business loans, loan against property, loan against shares

The Company achieved its highest ever disbursals of Rs.26,313 million under its various financing schemes, during the year 2006-2007

Network of over 6,000 Bajaj Auto and consumer durable dealerships and over 50 branch offices throughout the country to handle all the requirements of our customers

Trust and loyalty of over 40 lakh satisfied customers across the country Highest Credit Rating of FAAA/Stable from CRISIL for Fixed Deposits P1+ rating from CRISIL for Short-Term Debt Programme AA+/Stable from CRISIL and LAA+ from ICRA for Long-Term Debt Programme

CERDIT RATINGS:

Highest Credit Rating of FAAA/Stable from CRISIL for Fixed Deposits P1+ rating from CRISIL for Short-Term Debt Programme

AA+/Stable from CRISIL and LAA+ from ICRA for Long-Term Debt Programme

MANAGEMENT TEAM:

RAJEEV JAIN: CEO Rajeev JAIN is a Management graduate by profession and has 15 years of experience in consumer lending industry. He comes with an experience of managing diverse consumer lending business viz. auto loans, durable loans, personal loans and credit cards. In his previous assignments he has worked for over four years with GE and eight years with American Express. He Joins Bajaj Auto Finance Ltd from AIG, where He was Deputy CEO of its consumer finance business. DEEPAK GUPTA (CHIEF HR)

Deepak has an overall experience of 19 years in Financial Services, ITES and Manufacturing industry. Deepak has strength in areas like Strategy & Structure, People Policies, Employee relations, Talent management, Employee engagement, Performance measurement practices, Compensation, Rewards and Training & Development. Deepak joins us from SREI Infrastructure finance, where he was Group Sr. Vice President and Head of Human Resources. He was responsible for organization development, and HR effectiveness across the employee eco cycle i.e. spanning across Talent attraction, Performance Management, Compensation, Rewards & variable pay, Policies, Employee services, Leadership development and Productivity. Prior to that, he worked with Company like CRISIL, ENAM Financial, CEAT Financial Services and Reliance Industries Limited. Deepak will be responsible for driving People strategy for the organization and in making Bajaj Finance an employer of Choice. He will also be responsible for the Administration function in the company

DEEPAK REDDY: HEAD OF PERSONAL AND SMALL BUSINESS LOANS

Deepak is a management graduate with over 14 years of experience in distributing Financial Services & Consumer Durables. He joins us from American Express, where he held various positions in its Personal Loans & Consumer Card businesses over the last 9 years. He was Director - Sales (Consumer Cards) in his previous assignment there. Prior to American Express, Deepak has worked with Standard Chartered in Auto Loans business and also with Onida distributing durables for the first four years of his career. DEVANG MODY: BUSINESS HEAD SALES FINANCE, CROSS SELL AND INSURANCE

Devang is a Chartered Accountant by education and has experience in consulting and financial services. He joins us from AIG, where he worked as Vice President Business Development & CRM, Consumer Finance Business. Prior to that, he worked with GE Money for over 8 years in various assignments in Six Sigma,
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Sales Finance, Cross Sell and Personal Loans. Earlier, he has spent 5 years in consulting with firms like E&Y. Sales Finance is a strategic and high growth business for Bajaj Finance. Devang is responsible for profitably growing our leadership position in Sales finance.

PANKAJ THADANI: CHIEF FINANCIAL OFFICER

Pankaj joined BAFL in 2006 and has an experience of 24 years in financing, financial accounting, cost accounting, tax and systems. He is a Mathematics Graduate and is a Chartered Accountant by profession. He joined BAFL from an equity research company called Corporate Database. His previous assignments were with Bajaj Auto Limited, Eischer and Mico Bosch. RAKESH BHATT: CHIEF INFORMATION OFFICER

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Rakesh has an overall experience of 16 years in finance & technology industry. He has played several leadership roles encompassing CIO responsibilities, IT product management and delivery. Rakesh joins us from AIG Consumer Finance (India) where he was Vice President and Head Technology. Prior to that, he worked with 3i Infotech Ltd for 5 years with assignments in IT product management and development, product marketing and pre-sales support. Earlier, he had worked for Reliance Industries and GE Money. VIVEK LIKHITE: CHIEF CREDIT AND OPERATIONS

Vivek joined BAFL in 2007. He is a Chartered Financial Analyst and holds a Cost Accountant degree from ICWAI. He has an experience of 20 years in strategic planning, process management, operations management, accounts, funds management, budgeting and MIS. He has worked with Larsen & Turbo Ltd for eight years. His last assignment was with TATA Motor Finance before joining BAFL.

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GURUMEET KAUR: CHIEF RISK OFFICER

Gurmeet is a management graduate with over 16 years of experience in financial services and airline industry. She joins us from Future Money where she was the Chief Risk Officer and is credited for successful implementation of Risk policies and underwriting structure for Consumer Durables, Personal and Business loans and Loan against properties, implementation of state of art loan origination, repayment management and collections system. In her role as Chief Risk Officer at Bajaj Finance, Gurmeet is responsible for creating a proactive risk policy framework, strengthening our existing collections strategy, strengthening the existing loan origination platform, creating a world class data warehouse & analytics platform and reinforcing our fraud control strategy. CODE OF CONDUCT: CODE OF CONDUCT FOR DIRECTORS AND MEMBERS OF SENIOR MANAGEMENT Preface This code of conduct shall apply to the Directors and members of the Senior
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Management of Bajaj Auto Finance Limited (referred to hereinafter as BAFL or the Company). For this code, members of the Senior Management (hereinafter referred to as `Senior Managers) shall mean those personnel of the Company, who are members of the core management team, but shall exclude the Managing / Whole-time Directors. Directors and Senior Managers shall observe the highest standards of ethical conduct and integrity and shall work to the best of their ability and judgement. Directors and Senior Managers shall be governed by the rules and regulations of the Company as are made applicable to them from time to time. Directors and Senior Managers shall affirm compliance with this code on an annual basis as at the end of each financial year. Code of conduct : 1. Directors and Senior Managers shall ensure that they use the Companys assets, properties and services for official purposes only or as per the terms of appointment. 2. Directors and Senior Managers shall not receive directly or indirectly any benefit from the Companys business associates, which is intended or can be perceived as being given to gain favour for dealing with the Company. 3. Directors and Senior Managers shall ensure the security of all confidential information available to them in the course of their duties. 4. No Director or Senior Manager, other than the designated spokespersons shall engage with any member of press and media in matters concerning the Company. In such cases, they should direct the request to the designated spokespersons.
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5. Directors and Senior Managers shall not engage in any material business relationship or activity, which conflicts with their duties towards the Company. 6. Senior Managers shall not, without the prior approval of the Managing Director of the Company, accept employment or a position of responsibility with any organisation for remuneration or otherwise. In case of Whole-time Directors, such prior approval must be obtained from the Board of Directors of the Company. 7. Directors and Senior Managers shall declare information about their relatives (spouse, children and parents) employed in the Company.

PRODUCTS: BUSINESS LOANS CONSUMER DURABLE LOANS IT PRODUCT LOANS LOAN AGAINST PROPERTY LOAN AGAINST SHARES TWO WHEELER LOANS
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INSURANCE SERVICES

Business Loans Features Our Business Loans are unsecured loan which can be availed for your business use without providing security or guarantors. Business Loans could be taken for your business expansion, consolidating liability, repaying existing loans or any other immediate business requirement. Bajaj Finance Business loans are offered from Rs.3 lacs to Rs.30 lacs which can be repaid in 12 - 36 monthly installments. Bajaj Finance Business Loans comes with the following unique features: 1. Free Personal Accident Insurance of up to Rs 5 lacs

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2. Prompt Repayment Benefits 3. No Foreclosure Charges Benefits Only Bajaj Finance Business Loans comes with the following exclusive benefits: 1. Free Personal Accident Insurance of up to Rs 5 lacs - In case of untoward incident you would be covered with a personal accident insurance up to Rs 5 lacs. 2. Prompt Repayment Benefit - You get refund of 50% of the processing fee charged if you clear all your monthly installment on time. 3. Nil Foreclosure Charges -If you want to repay your loan, please go ahead, we do not charge any foreclosure charges if the loan is closed after repaying 6 monthly installments. Eligibility

Entities Partnerships, Private limited and closely held limited companies.

Documents Professionals Application form 1 Photograph Identity Details Residence Details Signature verification from
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Businessmen Yes Yes Yes Yes Yes

Yes Yes Yes Yes Yes

Bank Degree Certificate & Certificate of Practice Repayment Track record Income Details No* IT Returns & Balance Sheet & P/L Account statement for the last 2 years Bank Account Statements For the last 6 months Yes IT Returns & Balance Sheet & P/L Account statement for the last 2 years For the last 6 months Yes No

Processing Fees 2% of the loan amount Prepayment Charges


6% of the principal outstanding amount if the loan is closed within 6 months 5% of the principal outstanding amount if the loan is closed after 6 months

EMI bounce charges Rs 500 for every bounce Penal Interest 2.15% p.m Consumer Durable Loans Features Bajaj Finance, the sole organized financier in the market offering Consumer Durable loans offers you Dreams on EMI, with 0% finance options also available. CD loans are EMI loans for Consumer Durable items like Washing Machines, Refrigerators, Color TV's, LCD's etc. These CD loans come at a very reasonable
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price, with a very simple process. You can just walk into one of our Dealer partner showrooms and avail of this facility for the item of your choice. Loans are available for amounts more than Rs.7500. Multiple Credit programs are also available to suit your fitment. Benefits 1. 0% finance options available (for select schemes). 2. Simple process with minimum documentation. 3. On the spot approvals with fastest processing. 4. Flexible repayment options. 5. ECS clearing, reducing hassle of arranging cheques. 6. Extended Warranty available.

Eligibility

If you are a Salaried person your age should be between


o

21 years to 60 years.

If you are Self Employed your age should be between


o

21 years to 65 years.

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Documents Self Employed Y Y Y Y N Y N

Salaried Id Proof Residence Proof 3 Cheques 1. Credit Card front side photocopy 2. Visiting Card & Employee Id proof 3. Photocopy of RC book (Not applicable for vehicles registered after 2004 & commercial cars) 4. PPF Account Statement.
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Y Y Y Y Y Y Y

Credit Program Specific Documents (Any 1 of the following):

5. Bajaj Finance existing loan Repayment Schedule (subject to not later than 18 months old) 6. Any other Bank/NBFC Repayment Schedule 7. Latest Original Post Paid mobile bill 8. Insurance Premium Receipt 9. Salary Slip

Y Y Y Y Y

Y Y Y Y N

FEES & CHARGES: As per schemes selected by Customer

IT Product Loans Features Bajaj Finance, the sole organized financier in the market offering IT Product loans, offers your Dream Desktop/Laptop on EMI, with 0% options also available. These IT Product loans come at a very reasonable price, with a very simple process. You can just walk into one of our Dealer partner showrooms and avail of

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this facility for the item of your choice. PC loans are available up to 100% of the product price. Loans are available for amounts above Rs. 20000. Benefits 1. 0% finance options available (for select schemes). 2. Simple process with minimum documentation. 3. On the spot approvals with fastest processing. 4. Flexible repayment options. 5. ECS clearing, reducing hassle of arranging cheques. 6. Extended Warranty available. Eligibility

If you are a Salaried person your age should be between


o

21 years to 60 years.

If you are Self Employed your age should be between


o

21 years to 65 years.

Documents Self Employed Y Y Y

Salaried Id Proof Residence Proof 3 Cheques


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Y Y Y

Credit Program Specific Documents (Any 1 of the following): 1. Credit Card front side photocopy 2. Visiting Card & Emp. Id proof 3. Photocopy of RC book (Not applicable for vehicles registered after 2004 & commercial cars) 5. Bajaj Finance existing loan Repayment Schedule (subject to not later than 18 months old) 6. Any other Bank/NBFC Repayment Schedule 9. Salary Slip Y Y Y Y Y Y Y N Y Y Y N

Loan against Property: Features Loan Against Property is a Loan facility which a person or an entity avails by keeping property as a collateral. Bajaj Finance offers Loan Against Property for all your business and personal needs - whether you need money for your business expansion, working capital, loan consolidation, marriage in the family, childrens education or any other need you may have. The loans are available up to Rs.12.5 Crores and can be paid back over a comfortable term up to 15 years. We offer you a wide range of products to choose from: 1. Loan Against Residential Property
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2. Loan Against Commercial Property 3. Loan for Purchase of Commercial Property 4. Loan Against Plot 5. Lease Rental Discounting To meet the needs of all our customer we bring you a complete suite of programs that are tailor made to your requirements, you can avail a loan under any of the following programs:

Normal Income Program: You can avail loan basis your financial statements. Debt Consolidator: If you have multiple loans running and want to consolidate to one single EMI this has been designed just for you. There is also a flexibility of availing additional loan under this program.

Alternate Income Program: You can avail of loans upto Rs. 1 Crore under our Low LTV and Banking programs, which have been designed specifically to meet your requirements in a quick and hassle free manner.

Benefits Only Bajaj Finance Loan Against Property comes with the following exclusive benefits:

Nil Prepayment Charges You have the flexibility of partially or completely repaying your loan at any point of time! We do not levy any charges on partial (1 EMI or more) or complete closure of your loan after repayment of 6 monthly installments.

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Prompt Repayment Reward You will be rewarded for repaying your loan in time! We pay you 1% of the Equated Monthly Installment (EMI) paid in the first 12 months subject to timely clearance and no defaults. This amount shall be sent to you as a token of appreciation from Bajaj Finance at the end of the 13th month.

Free Personal Accident Insurance You are given a completely free Personal Accident Coverage! In case of untowards incident you would be covered with a personal accident insurance upto Rs. 10 Lacs.

Best in class Insurance Schemes: You can avail attractive Insurance packages at a very competitive premium!
o

Group Suraksha from Bajaj Allianz


Non Medical Loan & Life Insurance up to Rs. 70 Lacs Level term Plan, which means you are covered for the complete amount despite reduction/ prepayment of loan amount

Coverage for the complete tenor of the loan to a maximum of 30 Yrs

Home Safe Plus from ICICI Lombard


Non Medical Insurance up to Rs. 3 Crores Provides coverage against accidental death, permanent or total disability, diagnosis of critical illness and loss of job*

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Coverage for 5 years

Transparency and Flexibility - You are given the details of all the charges upfront. A no surprises in future promise from Bajaj Finance awaits you! Bajaj Finance believes in complete transparency and flexibility for its customers. To ensure that you are aware upfront of every charge that you might have to incur over the term of 15 years we have taken the following steps:
o

You are issued a sanction letter and a copy of loan documentation for your records.

You are issued a welcome letter which is exclusively designed and customized for you. It is sent to you within a week of the loan disbursal giving you complete details of your loan, repayment schedule and comprehensive details on Insurance along with a tariff card detailing all applicable charges and benefits available as a customer.

You have the option to make a prepayment in part or full at your convenience without any charges

And a special gift for a special customer!

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RE-PRICING POLICY The prevalent Bajaj FRR is 17% effective 1st Dec 2008. Bajaj FRR is the benchmark reference rate of BAFL Loan against Property and is determined based on the prevalent market conditions and the cost of funds of BAFL. As the cost of funds reduces/ increases, Bajaj FRR may reduce/ increase. Any revision in this rate would impact the interest rate on the floating interest rate loans. Re pricing would be done only for the loans booked under the floating rate scheme. For the loans which have been booked under the fixed rate scheme there will be no changes done for the fixed rate period. The increase/ decrease in the Interest rate will by default increase/decrease the loan tenor. In case of increase in interest rate, if you want to retain your existing EMI/ Tenor, you will have an option of making a part pre payment and keeping your EMI/ Tenor at the same level. No additional charges would be levied on the part pre payment.

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The communication on the changes (Increase/ decrease) in the rate of interest would be sent by mail Personal Loans Features Our Personal Loans are the cash loan which can be availed for your own personal use without providing security or guarantors. Personal Loans could be taken for renovation of your home, marriage in the family, a holiday with your family, your child's education, medical expenses or any other emergencies. Bajaj Finance Personal loans are offered from Rs. 3 lacs to Rs. 30 lacs which can be repaid in 12 - 60 monthly installments. Bajaj Finance Personal Loans comes with the following unique features: 1. Free Personal Accident Insurance of upto Rs 5 lacs 2. Prompt Repayment Benefits 3. No Foreclosure Charges Benefits Only Bajaj Finance Personal Loans comes with the following exclusive benefits: 1. Free Personal Accident Insurance of up to Rs 5 lacs - In case of untoward incident you would be covered with a personal accident insurance up to Rs 5 lacs. 2. Prompt Repayment Benefit - You get refund of 50% of the processing fee charged if you clear all your monthly installment on time.

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3. Nil Foreclosure Charges -If you want to repay your loan, please go ahead, we do not charge any foreclosure charges if the loan is closed after repaying 6 monthly installments as per repayment schedule. Eligibility

Salaried person
o

Individuals working in the approved list of companies

Self Employed
o o

Businessmen ( Traders, Small Manufactures etc) Professionals ( Doctors (MBBS , MD , BDS , MDS only) & Chartered Accountants only)

Documents Salaried Individual Application form 1 Photograph Identity Details Residence Details Signature verification
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Professionals Yes Yes Yes Yes Yes

Businessmen Yes Yes Yes Yes Yes

Yes Yes Yes Yes Yes

from Bank Degree Certificate & Certificate of Practice Repayment Track record Income Details No* No* Yes IT Returns & Balance Sheet & P/L Account statement for the last 2 years For the last 6 months No Yes No

Latest payslip & IT Returns & Form 16 (Form Balance Sheet & 16 required only P/L Account when applying under holiday finance) statement for the last 2 years For the last 6 months

Bank Account Statements

For the last 3 months

leProcessing Fees2% of the loan amount Prepayment Charges


6% of the principal outstanding amount if the loan is closed within 6 months 5% of the principal outstanding amount if the loan is closed after 6 months

EMI bounce charges Rs 500 for every bounce


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Penal Interest 2.15% p.m Two Wheeler Loans Bajaj Auto Finance Ltd offers attractive loans for purchase of new Bajaj vehicles. Bajaj Finance executives are available at most of the Bajaj Auto dealerships to offer finance schemes to suit the requirements of individuals. Bajaj Finance is the only finance company to offer a unique Extended Warranty on the two wheelers financed by it. Bajaj Finance also finances Bajaj three wheelers.

Insurance Services Bajaj Auto Finance Limited (BAFL) has tied up with Bajaj Allianz Life (part of Bajaj Group), to offer a rich bouquet of world class life insurance products to suit the financial needs of all segments of buyers through different stages of their lives. With its successful track record and its highly acclaimed standing, Bajaj Allianz Life Insurance Company (BALIC) prides on serving over 8 million Indian customers. BAFL shares BALIC's philosophy of providing insurance solutions relevant to the customer's needs.
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Employment fell from about 23,000 in 1995-96 (the year Bajaj suffered a twomonth strike at its Waluj factory) to 17,000 in 1999-2000. The company planned to lay off another 2,000 workers in the short term and another 3,000 in the following three to four years. Principal Subsidiaries: Bajaj Auto Finance Ltd.; Bajaj Auto Holdings Ltd.; Bajaj Electricals Ltd.; Bajaj Hindustan Ltd.; Maharashtra Scooters Ltd.; Mukand Ltd. Principal Competitors: Honda Motor Co., Ltd.; Suzuki Motor Corporation; Piaggio SpA.
Balance Sheet of Bajaj Auto Mar '06 ------------------- in Rs. Cr. ------------------Mar '07 Mar '08 Mar '09 Mar '10

12 mths

12 mths

12 mths

12 mths

12 mths

Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves 101.18 101.18 0.00 0.00 4,669. 55 0.00 101.18 101.18 0.00 0.00 5,433.14 0.00 144.68 144.68 0.00 0.00 1,442.91 0.00 144.68 144.68 0.00 0.00 1,725.01 0.00 144.68 144.68 0.00 0.00 2,783.66 0.00

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Networth Secured Loans Unsecured Loans

4,770. 73 0.02 1,467. 13 1,467. 15 6,237. 88 Mar '06

5,534.32 22.46 1,602.97

1,587.59 6.95 1,327.39

1,869.69 0.00 1,570.00

2,928.34 12.98 1,325.60

Total Debt

1,625.43

1,334.34

1,570.00

1,338.58

Total Liabilities

7,159.75

2,921.93

3,439.69

4,266.92

Mar '07

Mar '08

Mar '09

Mar '10

12 mths

12 mths

12 mths

12 mths

12 mths

Application Of Funds Gross Block 2,894.2 2 1,761.2 2 1,133.0 0 43.33 5,856.9 7 272.93 301.55 80.84 3,178.54 2,994.68 3,350.20 3,379.25

Less: Accum. Depreciation

1,904.94

1,726.07

1,807.91

1,899.66

Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance
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1,273.60 107.62 6,447.53 309.70 529.83 62.16

1,268.61 34.74 1,857.14 349.61 275.31 54.74

1,542.29 106.48 1,808.52 338.84 358.65 135.68

1,479.59 120.84 4,051.52 446.21 272.84 100.20

Total Current Assets Loans and Advances Fixed Deposits Total CA, Loans & Advances Deffered Credit Current Liabilities

655.32 2,282.9 8 1.25 2,939.5 5 0.00 1,419.0 8 2,315.8 9 3,734.9 7 -795.42 0.00 6,237.8 8

901.69 2,925.24 21.32 3,848.25 0.00 1,683.46

679.66 1,099.68 1.33 1,780.67 0.00 1,185.19

833.17 1,567.09 1.19 2,401.45 0.00 1,378.20

819.25 2,291.29 1.21 3,111.75 0.00 2,218.06

Provisions

2,833.79

834.04

1,224.15

2,248.72

Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets

4,517.25 -669.00 0.00 7,159.75

2,019.23 -238.56 0.00 2,921.93

2,602.35 -200.90 183.30 3,439.69

4,466.78 -1,355.03 0.00 4,266.92

Contingent Liabilities Book Value (Rs)

719.06 471.49

811.66 546.96

1,129.29 109.73

924.96 129.23

818.25 202.40

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Chapter 2 PRODUCT PROFILE AND FINANCIAL PERFORMANCE Motorcycles Three wheelers Overall performance of the company Financial ratio analysis

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Products Motorcycles Two-wheeler sales of Indian players are dominated by the domestic market and, within it, by motorcycles. After growing at a sharp clip from the late 1990s, motorcycle sales witnessed a 7.8% drop in volume in 2007-08, due to falling domestic demand as a result of rising interest rates and many private sector banks reducing their retail lending exposures. 2008-09 saw a modest increase in motorcycle sales of 4%, driven largely by growth in cash sales. Even so, sales of motorcycles (both domestic and exports) in 2008-09 has been lower than what it was in 2006-07, before the slowdown hit this sector. Chart A depicts the data from 1998-99. Chart A: Sales of two-wheelers (million units)

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Despite the slight uptick in the industrys sales volume, Bajaj Auto did not maintain volume growth, for reasons that will be discussed below. From 1.66 million motorcycles in 2007-08, the companys domestic sales fell by23% to 1.28 million units in 2008-09. Some of this was compensated by a 31% increase in exports to 631,383 units. But it was not enough Consequently, Bajaj Autos market share (domestic and exports, combined) fell from 32.7% in 2007-08 to 28% in 2008-09. Table 1 gives the data.

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Table 1: Motorcycle sales, domestic and exports (in numbers)

Year ended Sales (nos. Sales 31 March Millions) growth

BAL (nos. BALs Millions) growth

BALs market share

2003 2004 2005 2006 2007 2008 2009

3.757 4.317 5.218 6.201 7.100 6.544 6.806

31.3% 14.9% 20.9% 18.8% 14.5% (7.8%) 4.0%

0.868 1.024 1.450 1.912 2.379 2.140 1.908

32.3% 17.9% 41.6% 31.9% 24.4% (10.1%) (10.8%)

23.1% 23.7% 27.8% 30.8% 33.5% 32.7% 28.0%

Source: SIAM and Company data

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Motorcycles: Domestic Sales for the Industry The company classifies motorcycles into three segments, based on consumer categories and approximate price points. These are: Motorcycles of Bajaj can be categorized as:

SEGMENT BIKES Entry segment:

OF FEATURES

BAL PRODUCTS

COMPETITORS PRODUCTS Honda

100 motorcycles Rs.35, 000.

cc the Platina. The Hero for 34% in India in 2008-09 In this XCD Discover. segment and

at segment accounted Passion Plus

Executive segment: comprises 100 cc to priced Rs.40, 135 cc motorcycles, between 000 to

with two brands:

HERO

HONDA

CBZ Extreme and Splendour

Rs.50, 000. Performance segment: These are sleek, high performance, with price points in excess of Rs.50, 000. flagship brand, the Pulsar, cruiser, Avenger. dominate space, with and our the BAL this a HEO HONDA

Karizma and Hunk

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domestic 47%.

market

share in excess of

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Three-wheelers The companys domestic sales of three-wheelers in 2008-09 were 12% lower compared to the previous year, and stood at 135,473 units. Export demand grew at 2% to 139,056 units (see Table 2 above). However that was not sufficient to prevent a decline in the companys total three-wheeler sales which fell by 5.4% to 274,529 units in 2008-09. Given that total industry sales shrank by 1.6% in 2008-09 over the previous year, while Bajaj Autos fell by 5.4%, the companys market share dropped by 2.3 percentage points to 55.1%. At this market share however, Bajaj Auto remains the leading three-wheeler player in India. Table gives the data. Passenger vehicle sales: 2007-08 2008-09 Industry sales 375,180 415,411 Bajaj Auto sales 263,598 264,332 Bajaj Auto market share 70.3% 63.6% Goods carriers Industry sales 130,826 82,382 Bajaj Auto sales 26,714 10,197 Bajaj Auto market share 20.4% 12.4% Total 3-wheelers: Industry sales 506,006 497,793 Bajaj Auto sales 290,312 274,529 Bajaj Auto market share 57.4% 55.1% Source: SIAM and Company data. Rate of growth 10.7% 0.3% (6.7%) (37.0%) (61.8%) (8.0%) (1.6%) (5.4%) (2.3%)

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Overall Performance of the company: Financials: (Rs. In Million ) 2008-09 Net sales & other income 89,323 Gross profit before exceptional items, interest & depreciation Total Sales: 2008-09 Motorcycles 1,907,853 Other two-wheelers 11,772 Total Two wheelers 1,919,625 Three wheelers Total 2 & 3 wheelers 274,529 2,194,154 2007-08 (Nos.) (Nos.) 2,139,779 21,316 2,161,095 290,312 2,451,407 13,140 14,162 2007-08 91,688

Of the above, exports were Two wheelers Three wheelers Total Exports 633,463 139,056 772,519 482,026 136,315 618,341

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FINANCIAL ANALYSIS OF BAJAJ AUTO (A) Liquidity and Solvency ratios This ratio suggests the short-term liquidity position of the firm. The following ratios are to be (i) calculated.

Current Ratio.

Current Assets = Debtors + Cash/Bank + Marketable Non Trade Investments + Stock + Loans & Advances + Prepaid Expenses. Current Liability = Creditors + Bank Overdraft + O/S Expenses. The ideal ratio is 2:1 Year Current Assets Current Liabilities (Rs. In cr.) 2008 2009 1780.67 2401.45 (Rs. In cr.) 2019.29 2602.35 0.88 times. 0.92 times. 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

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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.

(B)Management Efficiency ratios This ratio finds how efficient the management is in their decision-making & utilization of the production capacity & other resources. (i) Inventory Turnover Ratio.

Year

Sales Turnover (Rs. in cr.)

Inventory Inventory Turnover Ratio (Rs. in cr.) 349.61 338.84 28.19 27.47

2008 2009

9856.66 9310.24

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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.

(C)PROFITABILITY RATIO

Gross Profit Ratio

Year

NPAT (Rs. in cr.) 755.95 656.48

Net sales (Rs. in cr.) 8827.15 8700.17

Profit Margin

2008 2009

8.56 % 7.55 %

Analysis:45

The profit margin has decreased from 8.56% in 2008, to 7.55% in 2009. According to the figures, company has been successful in decreasing their Sales by Rs.126.98 cr. in 2009 but the increases in net income available common stock holders was 111% which leaded to a decrease in the profit margin.

(D)Market Value Ratio. Price Earning Ratio.

Year 2008 2009 Analysis:-

Price Per Share (Rs. in cr.) 10 10

Earning Per Share (Rs. in cr.) 52.25 45.37

PER 0.19 0.22

It can be seen from calculations that in year 2009 the ratio is more than doubled from 0.19 to 0.22. This was due to the fact that the price per share over the year has same with Rs.10 per share where as book value per share increased by just Rs.109.73 to Rs.129.23.

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CHAPTER THREE STRATEGIC ANALYSIS a) Vision mission and values b) Logo c) SWOT Analysis

d) Porters five Forces Model Analysis e) f) Managerial style Business strategies

g) Other strategic issues

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VISION MISSION AND VALUES

Bajaj doesn't have a straight vision or mission statement. They define it in terms of brand identity, brand essence (derived from mission) and brand values. Our Brand Identity

Our 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 we do must always reinforce the distinctiveness and the power of our brand.

We can do this by living our brand essence and by continuously seeking to enhance our customers experience.

In doing so, we ensure a special place for ourselves in the hearts and the minds of our customers.

Our Brand Essence

Our Brand Essence is the soul of our brand.

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Our brand essence encapsulates our mission at Bajaj. It is the singular representation of our terms of endearment with our customers.

It provides the basis on which we grow profitably in the market. Our 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 our customers.

By challenging the given. By exploring the unknown and thereby stretching ourselves towards tomorrow, today.

Our Brand Values We live our brand by its values of Learning, Innovation, Perfection, Speed and Transparency. Bajaj will constantly inspire confidence through excitement engineering.

Learning Learning is how we ensure proactivity. It is a value that embraces knowledge as the platform for building well informed, reasoned, and decisive actions.

Innovation Innovation is how we create the future. It is a value that provokes us to reach beyond the obvious in pursuit of that which exceeds the ordinary.

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Perfection Perfection is how we set new standards.It is a value that exhibits our determination to excel by endeavoring to establish new benchmarks all the time.

Speed Speed is how we convey clear conviction. It is a value that keeps us sharply responsive, mirroring our commitment towards our goals and processes.

Transparency Transparency is how we characterise ourselves. It is a value that makes us worthy of credibility through integrity, of trust through sensitivity and of loyalty through interdependence.

LOGO of BAJAJ:

INITIAL 2004)

LOGO

(upto CHANGED LOGO (upto LATEST LOGO (since 2007) 2007)

Hexagonal blue and white Completely blue logo to To stress the leadership logo signify modernity and position of the brand in the market dynamism
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SWOT Analysis: Let's analyze the position of Bajaj in the current market set-up, evaluating its strengths, weaknesses, threats and opportunities available.

Strengths: Highly experienced management. Product design and development capabilities. Extensive R & D focus. Widespread distribution network. High performance products across all categories. High export to domestic sales ratio. Great financial support network (For financing the automobile) High economies of scale. High economies of scope.

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Weaknesses:

Hasn't employed the excess cash for long. Still has no established brand to match Hero Honda's Splendor in commuter segment. Not a global player in spite of huge volumes. Not a globally recognizable brand (unlike the JV partner Kawasaki)

Threats: The competition catches-up any new innovation in no time. Threat of cheap imported motorcycles from China. Margins getting squeezed from both the directions (Price as well as Cost) TATA Ace is a serious competition for the three-wheeler cargo segment.

Opportunities:

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Double-digit growth in two-wheeler market. Untapped market above 180 cc in motorcycles. More maturity and movement towards higher-end motorcycles. The growing gearless trendy scooters and scooterette market. Growing world demand for entry-level motorcycles especially in emerging markets.

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Porters Five Forces Analysis:

Supplier Bargaining Power: Suppliers of auto components are

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fragmented and are extremely critical for this industry since most of the component work is outsourced. Proper supply chain management is a costly yet critical need. Buyer's Bargaining Power: Buyers in automobile market have more choice to choose from and the increasing competition is driving the bargaining power of customers uphill. With more models to choose from in almost all categories, the market forces have empowered the buyers to a large extent. Industry Rivalry: The industry rivalry is extremely high with any product being matched in a few months by competitor. This instinct of the industry is primarily driven by the technical capabilities acquired over years of gestation under the technical collaboration with international players. Substitutes: There is no perfect substitute to this industry. Also, if there is any substitute to a two-wheeler, Bajaj has presence in it. Cars, which again are a mode of transport, do never directly compete or come in consideration while selecting a two-wheeler, cycles do never even compete with the low entry level moped for even this choice comes at a comparatively higher economic potential.

Managerial Style:

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Off late Bajaj Auto Limited, Indias premier automotive company, has emphasised a lot on 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 (Strategic units) are R&D, Engineering, Two Wheeler Business Unit, and Commercial Vehicles Business Unit & International Business Unit. These pillars will be supported by functions of Finance, MIS, HR, Business Development and Commercial.

Pradeep Srivastava, who was VP-Engineering prior to restructuring, will now be President- Engineering. As per the reorganized structure the company will have three CEOs. S. Sridhar, currently, VP, Mktg. & Sales Two-Wheelers, will now head the Two Wheeler Business Unit as CEO with manufacturing operations at Waluj and Akurdi also reporting to him. RC Maheshwari has joined Bajaj Auto as CEO Commercial Vehicles. The company is in the process of identifying a CEO for its International Business. The three CEOs will be responsible for Top line, Business Growth & profitability of their respective businesses. Abraham Joseph will continue to lead Research & Development. Business Stratergies: Marketing Strategies: The focus of BAL off late has been on providing the best of the class models at competitive prices. Most of the Bajaj models come loaded with the latest features within the price band
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acceptable by the market. BAL has been the pioneer in stretching competition into providing latest features in the price segment by updating the low price bikes with the latest features like diskbrakes, anti-skid technology and dual suspension, etc. BAL adopted different marketing strategies for different models, few of them are discussed below: Kawasaki 4S - First attempt by bajaj to make a mark in the motorcycle segment. The target customer was the father in the family but the target audience of the commercial was the son in the family. The time at which Kawasaki 4S was launched Hero Honda was the market leader in fuel-efficient bikes and Yamaha in the performance bikes. Boxer - It took the reins from where the Kawasaki 4S left. Target was the rural population and the price sensitive customer. Boxer marketed as a value for money bike with great mileage. Larger wheelbase, high ground clearance and high mileage were the selling factors and it was in direct competition to Hero Honda Dawn and Suzuki MX100. Caliber - The focus for the Caliber 115 was youth. And though Bajaj made the bike look bigger and feel more powerful than its predecessor (characteristics that will attract the average, 25-plus, executive segment bike buyer), its approach towards advertising is even more radically different this time around. Bajaj gave the
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mandate for the ad campaign to Lowe, picking them from the clique of three agencies that do promos for the company (the other two being Leo Burnett and O&M). Going by the initial market response, the campaign was clearly a hit in the 5-10 years age bracket. So, the teaser campaign and the emphasis on the Caliber 115 being a `Hoodibabaa' bike placed it as a trendy motorcycle for the college-goers and the 25 plus executives both at the same time. Pulsar - Pulsar was launched in direct competition to the Hero Honda's 'CBZ' model in 150 cc plus segment. The campaign beared innovative punch line of "Definitely Male" positioning Pulsar to be a masculine-looking model with an appeal to the performance sensitive customers. The Pulsar went one step ahead of Hero Honda's 'CBZ' and launched a twin variant of Pulsar with the 180 cc model. The model was a great success and has already crossed 1 million mark in sales. Discover - The same DTSI technology of Pulsar extended to 125 cc Discover was a great success. With this, Bajaj could realize its success riding on the back of technological innovation rather than the joint venture way followed by competitors to gain market share. BAL now is taking a leaf out of the FMCG business model to take the company to greater heights.Bajaj has kicked off a project to

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completely restructure the company's retail network and create multiple sales channels. Over the next few months, the company will set-up separate sales channels for every segment of its business and consumers. Bajaj Auto's entire product portfolio, from the entry-level to the premium, is being sold by the same dealers. The restructuring will involve separate dealer networks catering to the urban and rural markets as well as its three-wheeler and premium bikes segments. Bajaj Auto also plans to set-up an independent network of dealers for the rural areas. The needs of financing, selling, distribution and even after-sales service are completely different in the rural areas and do not makes sense for city dealers to control this. The company also plans to set-up exclusive dealerships for its three-wheeler products instead of having them sold through an estimated 300 of its existing dealers.

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Other Strategic Issues: Cash is strength: Bajaj Auto has been sitting on a cash pile for over five years now. Over the next couple of years, competition in the two-wheeler market is set to intensify. TVS Motors and Hero Honda are on a product expansion binge. To fight this battle and retain its hard-earned market share in the motorcycle segment, Bajaj Auto will need its cash muscle. A look at its own story over the past five years provides valuable insight. Stake for Kawasaki: Bajaj Auto's attempt to vest the surplus cash in a separate company may be a prelude to offering a stake to Kawasaki of Japan in the equity of the automobile company. The latter has been playing an increasingly active role in Bajaj's recent models, and its brand name is also more visible in Bajaj bikes than in the past. Better value proposition: Shareholder interests may be better served if the cash is retained to pursue growth in a tough market. This would also obviate the need to fork-out fancy sums as stamp duty to the government for the de-merger. A combination of a large one-time dividend and a regular buyback program through the tender route may offer better value. A strategic stake for Kawasaki would only positively influence the stock's valuation.

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Strategies for the Overseas Markets: Bajaj Auto looks at external markets primarily with three strategies: 1) A market where all BAL need to do is distribute through CKD or CBU routes. 2) Markets where BAL need to create new products. 3) Markets where BAL need to enter with existing products and probably with a good distributor or a production facility or a joint venture. Earlier, most of the products that Bajaj exported were scooters and some motorcycles. However, in its target markets, like in India, the shift was towards motorcycles. With the expansion in Bajaj's own range to almost five-six platforms of motorcycles, it had a better offering to export, also the reason for its stronger showing. For the last fiscal, 60 per cent of its exports were twowheelers and the rest three-wheelers. Exports to middle Africa and the Saharan nations. Egypt and Iran also continue to be strong markets for Bajaj.

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CHAPTER FOUR SUPPLY CHAIN ANALYSIS Value chain management Subsidiaries Spare part division

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Value 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. Key suppliers : Bajaj auto has approximately 198 suppliers for their raw materials. Some of the key suppliers are : JBM - Frames MRF & Dunlop tires Minda - locks & ignition system Reinder headlamps & lights Endurance brakes, clutch & Cast wheel
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Varroc Plastic parts & Digital Meter Max auto components ignition system and switches Silco cable wires and cables Makino industry Brake shoes . Brake lining, clutch center Inder auto industries- Chambers, Gaskets, Cylinder Piston kit. KBX disk Brakes assembly Inventory policyBajaj auto maintains seven days inventory . Demand Estimations were based on Panel Regression, which takes into account bothtime series and cross section variation in data .All the Mediators are connected with each other through IT linkage to know exact status of delivery of goods Manufacturing locations Akurdi, Pune 411035 This is one of the oldest plant of bajaj auto ltd with production capacity of 0.6 million vehicles/ year. The plant has been closed in order to equip for four wheeler production Bajaj Nagar, Waluj Aurangabad 431136 This is second plant with production capacity of 0.86 million/ year .products manufactured here are Kristal, XCD and platina and commerial GC series
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Chakan Industrial Area, Chakan , Pune 411501 This is the biggest plant of bajaj auto Production Capacity of 1.2 million/ year , Product manufactured here are pulsar and avenger and commercial Ge series Pantnagar , Uttarakhand The most advanced plant of bajaj auto .It has Capacity of 0.9 million vehicles per year . product manufactured here are platina and XCD

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 semiurban & 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 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.

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Value chain of the company

Subsidiaries: PT. Bajaj Auto Indonesia (PT BAI), was incorporated as a subsidiary company in Indonesia with an issued, subscribed & paid-up capital of US$ 12.5 million (Rs.562 million) in 2006-07. Bajaj Auto holds 97.5% shares in this company, with balance being held by a local partner. The subsidiary company has accumulated losses of Rs. 830.7 million as on 31 March 2009. Through the efforts, which are planned in the coming years, it is expected that PT BAI will turn around within a reasonable time. During the year under review, sales and service network reach have been xpanded substantially covering the major cities of Jawa, Sumatara, Bali and Sulawesi islands. Total showroom strength stands at around 63 numbers, covering 46 cities of Indonesia.
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PT BAI assembles and markets Bajaj Pulsar and Bajaj XCD in Indonesia, establishing Bajaj as a high quality tech-savvy brand. PT BAI plans to expand its presence, product range and reach towards becoming a strong player in this market currently dominated by Japanese 2-wheeler majors. Bajaj Auto International Holdings BV, Netherlands (BAIHBV) -was incorporated as a wholly owned subsidiary company in Netherlands with an issued, subscribed and paid-up capital of Euros 200,000 during 2007-08. Further capital of Euro 98.2 million was invested in this company during the previous year, by way of premium. It is proposed to make strategic investments in overseas ventures, by way of equity shares and / or loans and to undertake related activities through this company. Spare parts Division: Automobiles need periodic replacement of parts. Not surprisingly, therefore, spare parts comprise a profitable business for major automobile manufacturers. The objectives of spare parts business of Bajaj Auto are to perform an effective role in supporting new vehicle sales, maintain vehicle goodwill' across different geographies, makes and consumer groups, and contribute to the bottom-line. These translate into three goals: * Make spare parts available to customer at all time.
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* Make them affordable. * Achieve profitable business growth and greater penetration. The company's spare parts business has done well. Domestic sales of spare parts grew by 17.5% to achieve a revenue of Rs.5.88 billion in 2008-09. And exports rose by 84% to Rs.1.45 billion. There is huge head room for further growth of this business. Even today, despite significant expansion of Bajaj Auto's authorised service network, more than 70% of the services during post-warranty

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CHAPTER FIVE CORPORATE SOCIAL RESPONSIBILITIES Environmental friendly techniques Community leadership programmes: health education Other CSR activities

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CORPORATE SOCIAL RESPONSIBILITY

Cost effective and Environmental strategies: Conservation of energy: As a part of continuing efforts to conserve various resources, following steps were taken to conserve energy: Electrical energy saving was achieved by installation of localised portable air compressors at various shops during low production periods, energy efficient screw compressors by replacing CPT compressors, real timer electrical circuits installed to switch off electrical equipments during lunch / tea breaks and during non utilisation of production equipments, fan less cooling towers for AC plants, high efficiency reflector fittings with electronic ballasts tube lights, use of LED & CFT street lights, replacement of 350 W air circulators by 180 W air circulators, 150 W MH lamps instead of 250 W HPSV lamps at shop floors, Variable Frequency Drives VFD) for ASUs in paint shops, washing machine blowers, compressors etc and rationalisation of pumping hours of main pump as well as booster pump of pump house. Water saving was achieved by replacement of old under-ground water pipes with aboveground pipes to avoid water wastage through leakage, drip irrigation system for gardening, installation of localised fresh water storage systems, usage of treated water for bin washing
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and paint shop process, rain water harvesting and use of biochemical additives to reduce frequency of water change in various paint processes; and LPG saving was achieved by installation of waste heat recovery system for hot water generation used in pre-treatment process of paint shop, use of reflective coating inside furnaces for better heat retention, threewheeler electro-deposition (ED) painting process changed from Acrylic ED to Cathodic ED, optimisation of loading pattern in CGC and seal quench furnaces, reduction of hot water temperature for pre-treatment, use of bio- gas for cooking in canteens, start-up losses in ovens and hot water generation plants and changed design of paint jigs to reduce jig stripping frequency. Impact of measures taken: As a result of the initiatives taken for conservation of energy and natural resources, the company has effected an overall reduction in consumption as under:-

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Investment / savings: Investment for energy conservation activities: Rs.9.35 million Saving achieved through above activities: Rs.24.2 million Community leadership programmes: During the year, the employees volunteered for blood donation camp at Deenanath Mangeshkar Hospital, Pune and Dr Susheela Tiwari Hospital, Pantnagar Fire fighting teams of the company along with vehicles responded to 20 Fire assistance calls from Government Fire Department / other industrial units outside the factory premises in the larger interests of saving invaluable life and property. Community Care: In line with the commitment to enrich the life of all with whom bajaj deals, it showes sensitivity to the employees, who opted for voluntary retirement at the Akurdi Plant. Soon after the Akurdi employees expressed their interest in accepting the Voluntary Retirement Scheme, the company organised a series of interactive meetings with leading financial institutions. The officers explained the need to prudently and safely invest the monies received, considering the various options available today. The company
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devised attractive schemes for interested employees so that they could receive regular monthly payments, in addition to lump sum compensation announced. They were also provided with options of taking loans at competitive rates of interest. By these actions, it is the company's endeavour that the employees, who have accepted voluntary retirement scheme, are independently self-sustaining and can take good care of their families. Employees were also guided for alternative possibilities, whether as employee or entrepreneur. Health: Government of India- Ministry of Health and Family Welfare National Aids Control Organisation (NACO) and CII have initiated Public Private Partnership (PPP) in order to provide better healthcare to AIDs patients. The company has signed a tripartite MoU with NACO and Yeshwantrao Chavan Municipal Hospital (YCMH) in Pimpri to set up an Anti Retroviral Treatment Centre (ART Centre) at YCMH in Pimpri, Pune with the cooperation of Pimpri Chinchwad Municipal Corporation for HIV patients. Many dignitaries from Global Fund, WHO and such other organisations have visited the ART centre, which is the largest unit run by an industry under Public Private Partnership programme. Apart from two doctors and six supporting medical staff, the ART centre has added audio-visual facilities for group counseling, as a result of which the ART centre registration has
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reached 1,900 numbers and the unit is recognised today as one of the best ART centres in the country. Rural and community development activities and empowerment of women. Education: The company has launched a programme that would help SC/ST students achieve academic excellence and make them on par with those, who can afford coaching for entrance to IITs. During the year under review, one student with a brilliant academic record was identified from the underprivileged and low-income group, for reimbursement of complete fees for the preparation of IIT entrance test under the guidance of IITians Prashikshan Kendra. Under the central government initiative of Public Private Participation (PPP), the company has volunteered to adopt 3 ITIs (Industrial Training Institute) for up-gradation: * ITI Mulshi * ITI Haveli * ITI Ramnager

The other activities include: Bajaj Auto Ltd. was the first and only company to launch ecologically friendly CNG engines for three wheelers in Delhi.
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Bajaj Auto promotes several welfare programmes for its employees as well as various initiatives related to environment, health, education and rural development in the communities around the plant areas.

CHAPTER SIX THE FUTURE RECOMMENDATIONS

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THE FUTURE 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.

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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. 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 has said in a statement that the car will offer a mileage of 34 kilometer per litter. Bajaj will launch the car in Petrol and Diesel variants. Bajaj has plans to manufacture the small car at its facility in Chakan near Pune. 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 three-way alliance where Bajaj would hold 50 per cent equity. Renault = 25 per cent The ULC project was conceived as a three-way alliance where Renault would hold 25 per cent equity. Nissan = 25 per cent The ULC project was conceived as a three-way alliance where Nissaan would hold 25 per cent equity.

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Bajaj Auto, which is yet to sign a joint venture agreement with its partners, Renault and Nissan. The ULC project was conceived as a three-way 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.

Recommendations The impression of Bajaj in the minds of the public is that it is a moped & a three-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.)
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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.

Bajaj should evaluate the process of backward integration as it has huge cash reserves surplus. This process would help it in acquiring inputs continuously at lower cost & at regular intervals.

Increase its dealer network to tap rural growing markets by going in for tieups & offering better margins to dealers.

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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, in-house, purchase & tie-up should be evaluated.

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BIBLIOGRAPHY www.bajajauto.com http://www.business-standard.com/india/news/bajaj-autorevamps-organisational-structure/ http://www.karmayog.org/csr500companies/csr500companie s_7373.htm www.wikipedia.org http://www.bma.ac.in/KnowledgeCentre/index1.html http://www.prdomain.com/companies/B/BajajAuto http://www.coolavenues.com/know/gm

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