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A Project Report On BAJAJ AUTO LIMITED S
A Project Report On BAJAJ AUTO LIMITED S
On
Submitted in Fulfilment of
In
Prepared By:
Tej Vardhan : (17BSPHH01C1177)
Guided By:
Prof. Shridharan Lakshmanan
Operation Department
ICFAI Business School, Hyderabad
2017-18
TABLE OF CONTENTS
The Bajaj Group is amongst the top 10 business houses in India. Its footprint
stretches over a wide range of industries, spanning automobiles (two wheelers
manufacturer and three wheelers manufacturer), home appliances, lighting, iron
and steel, insurance, travel and finance. The group's flagship company, Bajaj Auto,
is ranked as the world's fourth largest three and two wheeler manufacturer and the
Bajaj brand is well-known across several countries in Latin America, Africa,
Middle East, South and South East Asia. Founded in 1926, at the height of India's
movement for independence from the British, the group has an illustrious history.
The integrity, dedication, resourcefulness and determination to succeed which are
characteristic of the group today, are often traced back to its birth during those
days of relentless devotion to a common cause. Jamnalal Bajaj, founder of the
group, was a close confidant and disciple of Mahatma Gandhi. In fact, Gandhiji
had adopted him as his son.
This close relationship and his deep involvement in the independence movement
did not leave Jamnalal Bajaj with much time to spend on his newly launched
business venture. We are celebrating 125th Birth anniversary of Shri. Jamnalal
Bajaj on 4th of November 2014.
His son, Kamalnayan Bajaj, then 27, took over the reigns of business in 1942. He
too was close to Gandhiji and it was only after Independence in 1947, that he was
able to give his full attention to the business. Kamalnayan Bajaj not only
consolidated the group, but also diversified into various manufacturing activities.
The present Chairman of the group, Rahul Bajaj, took charge of the business in
1965. Under his leadership, the turnover of the Bajaj Auto the flagship company
has gone up from INR.72 million to INR. 120 billion, its product portfolio has
expanded and the brand has found a global market. He is one of India’s most
distinguished business leaders, bike manufacturer india and internationally
respected for his business acumen and entrepreneurial spirit.
HeroHonda's-entry-in-1984
HH started offering motorcycles to the Indian customers. Share of motorcycles
among two wheelers increased gradually. Bajaj kept its fingers crossed on the
scooter segment.
HMSI launched Activa gearless scooter which quickly became a success because
of its easy handling, electric start, refined engine and distinct looks. Customers
started migrating towards Honda and Bajaj's geared scooters began to appear
ancient. Undisputed leadership often leads to indifference and ignorance
(remember Kodak?). Bajaj went into a dormant state and failed to wake up to
changing market dynamics until it was too late. It tied up with Kawasaki to enter
into motorcycles in 1986 but found itself lagging behind. The iconic Chetak ran on
ventilator support and was killed in 2005.
In a last minute attempt to salvage volumes, Bajaj came up with its gearless scooter
'Kristal' in 2006 which failed miserably. Once a dominating force, their market
share fell significantly by 2009. MD Rajiv Bajaj decided to vacate the scooter
segment citing focus on motorcycles. This is where we feel the company left the
mine just before striking gold. Increased acceptance of modern gearless scooters
among all age groups led to a phenomenal growth of this segment. Share of
scooters has increased from 14 per cent in FY08 to about 25 per cent in FY14 and
the absence of Bajaj served the growth pie in a platter to Honda, that too for free!
The idea to completely back off from scooters was not the ideal one because Bajaj
had an extremely strong image of a scooter manufacturer with a high brand recall.
'Humara Bajaj' jingle still resonated with people. That image had to be shed and
converted to Bajaj as a motorcycle maker, which was extremely tough even after
spending truckloads of money on promotion. A new manufacturing plant along
with R&D and product development facilities had to be established, which meant
spending of more money.
Bajaj's dealers which were used to sell scooters now had to be re-trained to sell
motorcycles. Also, the distribution network had to be modified. Add few more
truckloads of money. Cost of lost opportunity. Probably worth more truckloads of
money than the above three combined. If Bajaj stayed and captured even 15 per
cent of the market, it would have earned more volumes than it currently gets from
Platina.
Absence from scooter segment will continue to hurt Bajaj as scooters are likely to
grow faster than motorcycles in the years to come.
Entry-into-Motorcycles
Motorcycles-(75-110cc)
This is the segment which brings the highest volumes to the motorcycle market.
Even a few percentage points of market share would translate into numbers in 5
digits. Keeping that in mind, Bajaj lost 1.87 per cent of its market share in 2014,
even though the segment witnessed a decent growth of 4.44 per cent.
The company's range of Discover 100/100 M and Platina 100/ 100 ES finds itself
hammered by market leader Hero Motocorp's onslaught through Splendor/ Passion/
HF Deluxe/ HF Dawn range of motorcycles, which sell almost 4 times in volumes.
Clearly Bajaj falls short of offerings here and needs to introduce fresh products if it
wants to capture a larger pie of this segment.
The exports however show a complete role reversal. Bajaj effectively dominates
the market more or less holding on to its share of almost 74 per cent over the past
three years. The Boxer and CT 100 brands of motorcycles, which are exclusively
made for exports have been well received in the foreign markets. In fact, Boxer is
the leading brand in Africa among all competitors. The company's exports grew
3.26 per cent in FY14 while the total exports in the segment grew by 4.43 per cent.
Motorcycles-(110-125cc)
The fall in Bajaj's market share in this segment can be compared to the fall in crude
oil prices over the past one year, both have nearly halved. Bajaj lost 12.35 per cent
of its market share in 2014, while the segment grew a miniscule 0.39 per cent over
the previous year. Whatever share of pie was lost by Bajaj seems to have been
equally distributed between Hero and Honda. This drastic performance of the
company in a segment where it held one-third of the market needs to be probed
deeper. The Discover brand has been losing its significance despite having given
several product updates. What Bajaj has done is that they have extended the brand
in both the upper 150cc segment and the lower 100c segment along with tens of
variants. Two things could have happened here: Brand Dilution - presence in three
different segments confused customers what Discover actually stands for, so they
migrate to the competitors.
Cannibalization - A price sensitive buyer goes for the lower segment for more
value for money and a performance seeking buyer opts for the upper segment
rendering the middle segment of no consequence. The picture was not that bad in
the exports where Bajaj lost 2.63 per cent market share over FY13 though there
was an increase in the absolute numbers by 12.11 per cent over the previous year.
The company holds 56.49 per cent of the exports in this segment. TVS and Suzuki,
though exporting much lower numbers are steadily increasing their share.
Motorcycles (125-150cc)
This segment is yet another headache for Bajaj and for the industry as a whole. The
segment volumes have shrunk by 20.67 per cent over the past two years while that
for Bajaj have declined even faster at 36.76 per cent. As a result, Bajaj's market
share has dwindled by a significant 10.42 per cent to land at 40.94 per cent.
A sigh of relief for Bajaj is that they still hold the leadership position in this
segment and are fairly ahead of their closest competitor Honda which holds 26.67
per cent share. However, if this downward trend continues for another year their
leadership position may be well within arm's reach of Honda.
The Pulsar 150 has been Bajaj's star product since its inception and its
'performance' bike image has clicked with the Indian customers. However, the
company has given it the same treatment as the Discover. Pulsar now comes in 5
different engine options - 135/150/180/200/220 cc.
Bajaj has historically followed the strategy of putting more focus on the higher
engine size segments. The company has also launched the Discover 150cc in 2014
to reinforce their market presence. Though these segments contribute a lower
volume as compared to executive bikes, they are expected to grow significantly in
the long term as the customers move upmarket. If that happens, Bajaj might have a
competitive edge by having a stronger brand and a wider product portfolio.
The situation on the export side looks much worse than the domestic. The segment
returnedto almost the same volumes in 2014 as it had in 2012 but sadly Bajaj's did
not. Their volumes got eroded by 22.32 per cent. As a result, the share of exports
dwindled from 65.51 per cent in FY12 to 51.05 per cent at the end of FY14. The
volume eater for the company here is Yamaha Motors whose share increased from
20.79 per cent to 33.98 per cent over the two years. Here too, Bajaj's leadership
position is under grave danger and the panic button should have been pressed by
now.
Motorcycles (150-200cc)
This segment has only two players fighting with each other. Bajaj offers the Pulsar
180 and 200NS along with KTM Duke 200 and RC 200 while TVS's Apache RTR
is their lone fighter. Contrary to expection, this lone fighter completely demolishes
the comparatively fresh opposition single handedly. In FY14, TVS snatched away
10.20 per cent market share from Bajaj despite the product onslaught by the latter.
This being a more premium segment with major customers being the urban youth,
the importance of brand is significant. Keeping that in mind, having a strong
domestic brand like Pulsar and a global brand like KTM has not helped Bajaj
salvage its volumes.
On the other hand, exports in this segment have seen stellar growth for the
company. Over the past two years Bajaj's volumes have grown by 171%, much
faster than the overall export growth of 72 per cent. Much of this success is
credited to new model launches namely Pulsar 200NS and KTM RC200.
Motorcycles (200-250cc)
This segment is a three sided battle among Pulsar & Avenger 220 from Bajaj,
Karizma from Hero and CBR 250R from Honda, all of which are strong and
popular brands. However, it's Bajaj which scores a convincing win over the others.
Despite the segment volumes declining by 6.34 per cent since FY12, Bajaj has
increased its market share from 57.29 to 67.87 percent. In absolute terms, out of
137454 units sold in 2014, 93290 units belonged to Bajaj. Once a marginal entity,
the Avenger has now caught the fancy of urban Indians who want to ride cruisers.
In FY14, the company sold about 41,000 Avengers and its demand has been
increasing within a niche section of customers. Bajaj commands a major share of
the exports in this segment and represented 78.63 per cent of the volumes in FY14.
However, being an upper segment the volumes are comparatively low. On top of
that, export volumes of the segment have declined by 56.12 per cent and that of
Bajaj have gone down by 64.09 per cent in the span of two years.
Motorcycles (350-500cc)
Bajaj is a recent entrant in this segment with the KTM RC390 launch in 2014. The
good news here is that in the first year itself the bike has managed to capture
15.85% of the market and it is expected to increase more by this year end. With its
trademark orange frame and alloy wheels, the KTM's have become quite a rage
among the youth in urban India. The rest of the segment belongs to the Royal
Enfield heavyweights. RC390 provides a sports bike body style in this segment
which otherwise has only street and cruiser bikes, hence offering a new proposition
to attract buyers. Bajaj has exported more KTM's than it has sold in the domestic
market and it has led to more than four-fold increase in the export volumes of this
segment.
TARGETING
Bajaj did the right move by targeting the youth of the India as in India 65 % of the
population is from 18-35.
Pulsar was the Bajaj first bike without Kawasaki label on it.
The bike was mainly targeting the male segment and known for its macho look.
Bajaj has positioned Pulsar in the “high style and high price “category along with
the hero Honda Karizma, hero Honda CBZ, Royal Enfield.
Bajaj also positioned CT 100 in the “low style and low price “category along with
Herohonda Splender , TVS star city.
BRANDING
BRAND POSITIONING
Pulsar
Discover
Earlier Bajaj used “B” logo in a hexagon that was known for” Hamara Bajaj” was
replaced with a more attracting, stylish, vibrant, dynamic look moving from the
lower caps to upper caps which symbolize the
rejuvenated Bajaj auto ltd.
The change in the logo was the ongoing
change Bajaj has transformed its facilities like
manufacturing process, service and distribution
network, created its benchmark in research and
development activities. When customer has
changed in terms of quality and style then change
in the identity became the necessary change for
the Bajaj to invite the paradigm shift in the consumer’s perception regarding the
company.
Bajaj pulsar joined hands with MTV India in the year 2009 in order to launch
pulsar MTV stunt mania which was India’s first ever bike stunt reality show.
The main intention of the Bajaj to target the youth of the India and MTV being the
youth centric for the excellent choice.
ADVERTISING STRATEGY
Bajaj is known for its outstanding ads because they don’t use the brand
ambassadors in their ads which help the company to save lots of cost. Bajaj used
punch line like “Naye Bharat kin aye Tasveer “ added great value to its two –
wheeler product.
Bajaj Group believes that the true and full measure of growth, success and progress
lies beyond balance sheets or conventional economic indices. It is best reflected in
the difference that business and industry make to the lives of people.
Through its social investments, Bajaj Group addresses the needs of communities
residing in the vicinity of its facilities, taking sustainable initiatives in the areas of
health, education, environment conservation, infrastructure and community
development, and response to natural calamities. For society, however, Bajaj is
more than a corporate identity. It is a catalyst for social empowerment. It is the
reason behind the smiles that light up a million faces.Its goodwill resonates in the
two simple words that live in the collective consciousness of Indians Hamara
Bajaj.
The Corporate Social Responsibility (CSR) activities of Bajaj Group are guided by
the vision and philosophy of its Founder, late Shri Jamnalal Bajaj, who embodied
the concept of Trusteeship in business and common good, and laid the foundation
for ethical, value-based and transparent functioning.
EDUCATION:
The two flagship projects for Bajaj Auto have been the Bajaj Education
Initiative (BEI) and the e-Learning Project. The BEI covers 76 low cost schools
(a mix of private and government schools) in Pimpri-Chinchwad area of Pune, and
supports them with infrastructure development and capacity building. The e-
Learning project has reached more than 1550 schools till date- covering
Maharashtra and Rajasthan. Both of these are implemented by Jankidevi Bajaj
Gram Vikas Sanstha, our own NGO.
In addition Bajaj Auto has supported school infrastructure development, vocational
training for entrepreneurship, teach-to-lead as well as scholarships for meritorious
students.
Bajaj Auto is also supporting Bhartiya Yuva Shakti Trust (BYST) in training
25000 young persons in Aurangabad and Wardha to create 1000 entrepreneurs in 5
years. Over 177 entrepreneurs have been created in first 2 years of the project.
Bajaj Auto is the flagship company of the Bajaj Group of Companies. Bajaj Auto
Limited (BAL) is currently India's second largest two wheeler and three wheeler
manufacturer. The core competency of Bajaj Auto Ltd is its technology and
innovation. Both DTS-i (Digital Twin Spark Ignition) and DTS-Fi (Digital Twin
Spark Fuel Ignition) are technological breakthroughs by Bajaj. BAL is also a
pioneer in product innovation having introduced technologies such as ExhausTEC
(Exhaust Torque Expansion Chamber), LED Tail Lamps, LCD Display, SNS,
Spare parts (Tubeless tyres, rear disc brakes), Black colour scheme etc.
Thus we observe that BAL which used to be a Defender in 1970-1990 through
Bajaj Chetak radically moved towards becoming an Analyzer (1990-1997) by
focussing on bike segments and has now become a Prospector (1997-date) with
several patents in its kitty and new bike launches every year. Therefore, for a
follower to move on and become a market leader it is essential that it focus on
innovation and consumer demand.
The re-branding exercise gone haywire
In the beginning of 2011, Bajaj decided to withdraw its family name from its
products and develop individual brands having their own identity. The rationale
behind this was since Bajaj group diversified into areas like electrical, finance etc,
having the family name would confuse the buyer what they actually stand for. So
basically, Bajaj had restructured itself from a branded house (many products under
an umbrella brand) to a house of brands (separate brands owned by a parent). For
exampleVolkswagen is a house of brands - Audi, Bentley, Lamborghini function
separately and do not carry VW badge anywhere. Though aimed at reducing
confusion the exercise seems to have created just that. The brands now functioning
independently are poaching into each other's territory. Discover has stepped into
Platina's segment, Pulsar has model in KTM's space etc. These overlaps create
misunderstandings in terms of positioning resulting in diluted brands and
cannibalization of sales. Bajaj has seen its market share decline since then.
Bajaj Auto has partnered iconic British motorcycle brand Triumph to produce mid-
capacity bikes for the Indian and overseas markets.
Engineers from Bajaj Auto and Triumph Motorcycles have been working on the
new motorcycles at the former’s Chakan plant for some months. The no-equity
partnership will develop a range of mid-capacity 250-750cc motorcycles.
Focus on Gearless Scooters
The market share of gearless scooters is increasing at a healthy rate. Bajaj is
virtually absent in this range that caters to the needs of women and families.
Presently Honda, Hero Honda and TVS are big players in this segment.
Entry into Four Wheeler Segment
Bajaj has entered into a joint venture with Renault-Nissan in the development of a
small car priced at $30004. This is a significant move because it directly competes
with Tata NANO. Bajaj has also displayed its small car prototype in the recently
held auto expo. It promises double the mileage as compared to any car in the
economy segment and is also considering the option of introducing Diesel and
LPG variants. The four wheeler segment will also be able to hedge any risk that
might arise because of the two wheeler industry and would profit from retaining
consumers switching from two wheelers.
Scaling Up Service Centers
BAL needs to scale up its service centers both in numbers and in capacity. Keeping
in line with its growth target for the next 5 years, its service centers should not only
cater to two wheelers but should also be upgraded to cater to the needs of four
wheelers that Bajaj plans to launch.
Focus on Easy Credit Lending
In the present economical crisis, Bajaj can utilize its subsidiary, Bajaj insurance in
coming up with schemes that will help consumers buy two wheelers on friendly
terms.
Investment in Research and Development
We have already identified that the core competency of Bajaj is its R&D and
investment in technology. In order to increase market share and become the market
leader, Bajaj needs to invest heavily in R&D. They have to introduce efficient and
powerful bikes as well as develop alternate energy vehicles.
Product Award
2002-2003:
Product Award
Bajaj Boxer AT BBC World Wheels Award for Best Two Wheeler under
KTEC Rs 30,000
Bajaj Pulsar 150 BBC World Wheels Award for Best Two Wheeler between
DTS-i Rs 45,000 to Rs 55,000
Bajaj Pulsar 180 BBC World Wheels Award for Best Two Wheeler between Rs
DTS-i 55,000 to Rs 70,000
Bajaj Pulsar 180 BBC World Wheels Viewers Choice Two Wheeler of the
DTS-i Year 2003
2003-2004:
Product Award
2004-2005:
Product Award
2006-2007:
2007-2008:
Bajaj Auto, Waluj First prize for category "Productivity Thru Quality".
Bajaj Discover DTS-Si Motorcycle of the Year - Bike upto 125 cc.
2009-2010:
2010-2013:
Pulsar 200 NS NDTV Car & Bike Two wheeler of the Year.
Pulsar 200 NS NDTV Car & Bike Motorcycle of the year upto 250cc
Pulsar 200 NS NDTV Car & Bike Automotive Design of the Year
2013-2016:
Publication/TV Channel Awards for BAL
2009 (JANUARY):
Bajaj Pulsar 150 & Pulsar 180 upgrade launched.
20
2006 (APRIL):
APRI Bajaj Platina launched.
20
2005(JUNE FEBRUARY):)
Bajaj Discover launched
20 2004(AUGUSTMAYJANUARY):
Bajaj Discover DTS-i launched.
20 2001(JANUARY):
Bajaj Auto launches its latest offering in the premium bike segment 'Pulsar'.
20
2000:
2000 The Bajaj Saffire is introduced.
1999:
1999 Caliber motorcycle notches up 100,000 sales in record time of 12 months.
19
1998(JUNE JULY OCTOBER):
Production commences at Chakan plant.
19
1997:
1997 The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw are introduced.
19 1995:
Bajaj Auto is 50. Agreements signed with Kubota of Japan for the
development of diesel engines for three-wheelers and with Tokyo R&D for
ungeared Scooter and moped development. The Bajaj Super Excel is introduced
while Bajaj celebrates its ten millionth vehicle. One million vehicles were
produced and sold in this financial year.
19 1994:
1994 The Bajaj Classic is introduced.
19 1991:
1991 The Kawasaki Bajaj 4S Champion is introduced.
19 1990:
1990 The Bajaj Sunny is introduced.
1986:
The Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles are introduced.
500,000 vehicles produced and sold in a single financial year.
1985:
The Waluj plant inaugurated by the erstwhile President of India, Shri Giani
Zail Singh. Production commences at Waluj, Aurangabad in a record time of 16
months.
1984:
JFoundation stone laid for the new Plant at Waluj, Aurangabad.
1981:
The Bajaj M-50 is introduced.
1977:
The Rear Engine Autorickshaw is introduced. Bajaj Auto achieves production and
sales of 100,000 vehicles in a single financial year.
1976:
The Bajaj Super is introduced.
1975:
BAL & Maharashtra Scooters Ltd. joint venture.
1972:
The Bajaj Chetak is introduced.
1971:
The three-wheeler goods carrier is introduced.
1970:
1Bajaj Auto rolls out its 100,000th vehicle.
1960:
1Bajaj Auto becomes a public limited company.Bhoomi Poojan of Akurdi Plant.
1959:
1Bajaj Auto obtains licence from the Government of India to manufacture two-
and three-wheelers.
1948:
1Sales in India commence by importing two- and three-wheelers.
1945:
Bajaj Auto comes into existence asM/s Bachraj Trading Corporation Private
Limited.