"Group F":- Manish Kumar (09BS0002819) Taslim Qureshi (09BS0002530) Umang Jalan (09BS0002611) Varun Saxena (09BS0002653) Vibhuti Bhardwaj (09BS0002667) Vinay Verma (09BS0002703) Yashaskar Paliwal (09BS0002776) Overview Founded in 1926 by JamnaLal Baiai. His son, Kamalnayan Baiai, then 27, took over the reins oI business in 1942. The present Chairman oI the group, Rahul Baiai, took charge oI the business in 1965. Under his leadership, the turnover oI the Baiai Auto the Ilagship company has gone up Irom Rs.72 million to Rs.100.76 billion (USD 2.3 billion). The company was incorporated on April 30, 2007 as a wholly owned subsidiary oI erstwhile Baiai Auto Ltd (the holding company) with the name Baiai Investment & Holding Ltd. The company received the certiIicate oI commencement oI business on May 7, 2007. Baiai Auto Ltd.(BAL) Baiai is India's second largest motorcycle maker, smaller than Honda Motorcycle Scooter India, but larger than TVS Motor Co. Ltd. Baiai Auto, is ranked as the world`s Iourth largest two- and three- wheeler manuIacturer. The company is well known Ior their R&D, product development, process engineering and low-cost manuIacturing skills. INTRODUCTION In the mid -1940s,BAL started as an important oI two and three-wheelers .in the early 1960s,BAL ,in collaboration with piaggo ,started manuIacturing vespa brand scooters at its plant near Pune , Maharashtra. In 1970s,BAL started manuIacturing scooters under the Baiai brand. Bal`s Iirst scooter model under the Baiai brand was introduced in 1972.(Chetak) In the late 1990`s the Indian two wheeler market witnessed a shiIt in consumer preIerences. In 2005-06 scooter sales in the Indian market were around 1 million units annually and consisted predominantly oI gearless scooters. In early 2006 BAL announced that it would launch two new models oI gearless scooters in 2006-07. CSR Baiai Auto is committed to nation-building and contributing to the upliIt and development oI the weaker sections oI society. This is a legacy oI the Iounders, Jamanalalii, Kamalnayanii and Ramkrishna Baiai. Jankidevi Baiai Gram Vikas Sanstha (JBGVS) Samai Seva Kendra. Kamalnayan Baiai Hospital BACKGROUND NOTE: 1926- Baiai Auto was Iound by JamnaLal Baiai. 1956- Company secured a license Irom the GOI. 1960- Company went public & collaboration with Piaggio. 1961- Started the production oI scooters. 1962- Started the production oI three wheelers. 1971- Started selling scooters under the Baiai brand 1972- BAL Introduced the Baiai Chetak scooters. 1975- BAL entered into a ioint venture with western Maharashtra Development corporation. Cont. BACKGROUND 4nt... 1986:- BAL entered into a technical partnership with Kawasaki Heavy Industries & launched the Kawasaki Baiai. 1990:- The Baiai 'Sunny was introduced. 1997:- BAL launched the 'Bajaj Boxer. 1998:- BAL introduce the 'Bajaj Caliber. 1999:- The company launched the 'Bravo, a geared scooter. 2000:- Bal launched the 'Saffire, a gearless scooter. 2001:- It introduced the 'Pulsar. 2004:- Bal created a new Logo. 2005:- The 'SaIIire was relaunched as the Wave. 2006:- Bal launched the 'Platina. 2006:- Indian two wheeler industry was the second largest in the world. BAL & the Indian Two-Wheeler Market. 1950s -1980s: "License Rai . Domestic market protected-Govt.restriction. 1950s-Automobile Products oI India(API). Other players: EnIield(Bullet),Escorts(Raidoot),Jawa(Yezdi). 1960s:Govt.relaxation to domestic companies. 1970s: BAL manuIacture scooters under the "Baiai Brand. Scooter were more preIerred to motorcycles.2- wheelers demand increased due to ineIIicient transport system, the Chetak & the Super launched. Contd.. It act as Sellers Market like other consumer goods & customers had to wait Ior many years Ior delivery.(10-12 yrs Ior Baiai Chetak). It plays a maior role in dowry in India. 1970s-1980s-Govt. introduced MRTP Act & FERA. Indian manuIacturing motorcycles were not Iuel eIIicient, results low sell. GoI changed several policies in 1970s & early 1980s to give impetus to auto industry. Focus on :modernization. technologv upgradations.& healthv competitions in domestic market. Motorcycle segment Joint Venture: Foreign players had only option) Many players like Honda,Suzuki,Yamaha had ioint ventures with Indian companies. The Ioreign players came with latest technology, eIIicient production system etc that enhance the quality oI the motorcycle in India . Soon new models come with new style, advanced technology & Iuel eIIicient. Scooter segment LML entered into ioint venture with Piaggio in 1982 , to produce 'espa. sold well in 1980s-1990s after Chetak. 1984:The Kinetic tied up with Honda ,introduced new models , new Ieatures like selI start & automatic gear transmissions. 1980-1990s :BAL dominate by Chetak & Super model with their values Ior money appeal durability, versatility, low maintenance,avaliablity oI spare parts ,etc.Hamara Baiai ' add campaign. The Turning P4int: In 1991 & 1992 overall sales oI two wheelers declined by 15 & 8 respectively because oI a recession in the Indian two wheeler market The scooter segment was the largest sub-segment in the two wheeler market with 42 share (in terms oI unit sales) Iollowed by motorcycles (37) & mopeds (21) However, in 1990, the pattern oI demand changed & motorcycles became the Iastest growing segment Motorcycles were preIerred to scooters in the rural areas because oI poor road conditions Demographic changes Increasing proportion oI younger people in the overall population 4nt... Lower interest rates on vehicle loans made motorcycles more aIIordable Sales oI motorcycles surpassed that oI scooters Ior the Iirst time in 1999 (with Hero Honda SPLENDOR) In 1999-2000 scooter sales Iell by around 75,000 units, while motorcycle sales increased by more than 400,000 units BAL had volumes Ialling 40 year-on-year as scooters were 80 oI their total business In 2000 Bharat Stage II, a new set oI emission norms, came into eIIect. It was Ior petrol two-stroke engines & it gave a blow to BAL, which primarily sold two-wheelers with two- stroke engines ategory FY 2001 FY 2000 Growth (%) eared Sc44ters 426,334 757,714 -43.7 Un eared Sc44ters 78,892 69,726 13.1 M45eds 121,238 176,961 -31.5 M4t4rcycles 427,088 254,847 67.6 T4tal tw4- wheelers 1,053,552 1,259,248 -16.3 BAL FTS BAK Failed t4 antici5ate c4nsumer res54nse. P44r research. BAL increased its 5r4ducti4n 41 m4t4rcycles by 67.6% in 2001 even as the 5r4ducti4n 41 sc44ters 1ell by44% By 2001, the c4m5any was manu1acturing as many m4t4rcycles as geared sc44ters. BAJAJ HAS REORD FY 2010, TARGETS 4 MILLION VEHILES IN FY 2011 ParticuIars ApriI ~ March 2010 ApriI ~ March 2009 Growth % MOTORYLES 2,506,749 1,907,853 31 TOTAL 2 WHEELERS 2,511,600 1,919,625 31 hange P4rt14li4 New Iaunch gave wider range Refresh image. Pulsar 28% Disc4ver 48% 3w 16% Others 8% Oct 2010 saIes Data For Domestic Market Rebranding 41 amara Bajaj The Flying Brand Positioning Statement .-.~.- ~- Trying t4 resurrect Sc44ter sales Trying to Resurrect Scooter Sales Price diIIerential between scooter and motorcycles had narrowed. In 2001, BAL lowered the prices oI Chetak and Super by Rs. 5000 to Rs. 8000 and removed some accessories like spare wheel, luggage box, etc., Irom the base models. In the late 1990s while geared scooter sales were Ialling, the gearless scooter segments had been growing at 25 per annum. Main purchaser oI gearless scooters were teenagers, women, and older people. In 1999-2000, BAL had a market share oI 20 in this segment. In 2000 BAL introduced a new gearless scooter with a Iour stoke engine 'SaIIire. In 2002, the Legend NXT 2, a Iour stroke geared scooter that was claimed to oIIer a motorcycle like mileage oI 60-70kmpl was launched To add to BAL`s problems, HMSI`s sold about 10,100 unites oI the Activa within iust three months oI its launch in 2001. Kinetic launched the Nova, another gearless scooter in 2002, which also become quite popular. In April 2003, TVS launched the Scooty Pep (with a 75cc, Iour-stroke engine), an upgrade version oI its Scooty, with better styling, technology, and storage capacity. In 2004 Chetak was introduced with a new gear system called wondergear` in which no gear shiIting require. New ad campaigns were also launched to brush up the Chetak`s image. BAL was Iorced to phase out several models including the Spirit, the Sunny Spice, the Legend and NXT 2, and the Barvo.The SaIIire, reportedly, suIIered Irom several technical problems. It was replaced by Wave 2005. The Fall OF An Icon In Jan 2006, BAL announced that it had stopped production oI the Chetak. So that the company could upgrade its scooter portIolio and regain the title oI India`s largest scooter manuIacturer. Chetak had to phase out because BAL had neglected it in terms oI design, technology, and innovation. Chetak had remained unchanged Ior more than 30 years. Customer used to call it car on two wheels. At that time BAL had iust one scooter model, the Wave. By 2005-2006 HMSI was leader in scooter segment with 50 market share. Outl44k: Late 1990's- 545ularity 41 sc44ters vanish & m4t4rcycles c4me int4 sight Reas4n- uncared 14r this segment, mileage 5r4blem and 1ashi4nable techn4l4gy design & launch 41 new m4t4rcycles m4del Demand 41 gearless sc44ter was set t4 rise(20% every year) Reas4n- Trendy Style, better techn4l4gy & mileage, targeted t4 w4men and aged 5e45le, easy t4 1uncti4n Auto expo 2006 (New Delhi), BAL Launched two new gearless scooters ristal DTS-I (100cc); Target- Teenage Girls Blade DTS-I (150cc); Target- Young Males 4ntinued. The case traces the company's rise to dominance in the scooter segment oI the market, and its eventual Iall, against a backdrop oI changes in customer tastes and preIerences. It describes the reasons Ior the shiIt in demand and discusses the initiatives that the company undertook to regain lost ground. The case also discusses the competition in the Indian scooter market, and ends with a brieI discussion on recent developments in the two-wheeler market. mages 41 Bajaj Bikes: Thank you