bajaj auto ltd. 2013

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2013

BAJAJ AUTO LTD

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Akshay Awasare

12301A0035

Muthumadaswamy12301A0036

Gopalakrishnan12301A0037

Akshay Chougule12301A0018

Rakeeb Iqbal12301A0039


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Bajaj Auto Ltd.A

JOURNEY FROM

HAMARA BAJAJ

TO

DISTINCTLY AHEAD

EXECUTIVE SUMMARY

The Bajaj Group was founded in 1926 by Jamnalal Bajaj and nowconsists of 27 companies. In 1945, Jamnalal Bajaj had formed M/sBachraj Trading Corporation Private Limited, the flagship company, tosell imported two-wheelers and three-wheelers. The company acquired alicense from the government in 1959 to manufacture these vehicles and

went public the next year. By 1977, the company saw its plant rolling out100,000 vehicles in a single year. In another nine years, Bajaj Auto couldproduce 500,000 vehicles in a year. The present Chairman of the Bajajgroup, Rahul Bajaj, took charge of the business in 1965. He was the first

licensee of the Indian make of the Italian Vespa scooter.

Japanese and Italian scooter companies began entering the Indianmarket in the early 1980s. Although some boasted superior technologyand flashier brands, Bajaj Auto had built up several advantages in theprevious decades. Its customers liked the durability of the product andthe ready availability of maintenance; the company's distributorspermeated the country. By 1994-95, Bajaj was racing to beat Honda,Suzuki and Kawasaki in the two-wheeler segment internationally.

By 1997, Bajaj faced tough competition in the domestic market and itsmarket share stood at 40.5%. Under the leadership of Rahul Bajaj, theturnover of Bajaj Auto has gone up from Rs.72 million to Rs.46.16 billion(USD 936 million), its product portfolio has expanded from one to manyand the brand has found a global market. Bajaj as a brand is well-knownacross several countries in Latin America, Africa, Middle East, South andSouth East Asia.The company has a network of 498 dealers and over1,500 authorised service centers and 162 exclusive three-wheeler dealersspread across the country.

Bajaj has identified a segment of customers called 'Probikers', who areknowledgeable about motorbikes and appreciative of contemporary

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technology. They are trendsetters and very choosy about what they ride.Hence, Probikers need to be addressed in a meaningful way that goes

beyond the product. Bajaj Auto is in the process of setting up a chain ofretail stores across the country exclusively for high-end, performance

bikes. These stores are called Bajaj Probiking". Fifty two such storeshave been opened across India.

Catering to demand in this sector requires a strong and effectivedistribution network as consumers are more demanding and expectdelivery on time. Early delivery is a cause of delight for customers. Withsuch vast global and Indian rural presence, designing an efficientdistribution system becomes a complex task even for a company likeBajaj Auto. Lot of time and effort goes into designing a strategy basedefficient distribution system.

Two Wheeler Industry: An Overview

The Indian two-wheeler industry has witnessed spectacular growth inthe last few years. The market dynamics of the industry has substantiallychanged with a majority of the customers preferring bikes to scootersand mopeds. This is primarily due to better fuel efficiencies, dynamics,looks and longer product lives of motorcycles.

The motorcycle segment constitutes about 81.5% of the two wheelermarket in India1. It also contributes to three-fourths of the total exportsin the two wheeler industry. Exhibit 1 shows that Bajaj is the secondlargest player in this segment after Hero Honda.

Exhibit

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

The industry exhibits some degree of collusive behaviour and thusrepresents an oligopolistic form of market structure. Product and brand3 | P a g e


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differentiation are seen as the primary means of sustaining competitiveadvantage. In order to sustain brand equity, players spend largepercentages of their revenues in advertising and brand buildingactivities. The supply and distribution networks are decisive factors in

staying competitive and normally need a huge capital investment.

The two wheeler industry is capital intensive with large fixed costrequirements and new model introductions mandatory at frequentintervals in order to sustain the demand. This involves substantial designand R&D costs. Such high fixed costs can be offset only by achievingeconomies of scale. Moreover, developing a distribution channel isextremely difficult in a country like India. Therefore, it is difficult for anew player to enter this industry.

INTRODUCTION

Bajaj Auto is a major Indian automobile manufacturer started by aRajasthani merchant. It is world's fourth largest manufacturer of two-

wheelers and India's second largest two wheeler manufacturer and theworld's 4th largest two- and three-wheeler maker. It is based in Pune,Maharashtra, with plants in Akurdi and Chakan (Pune), Waluj (near

Aurangabad) and Pantnagar in Uttaranchal. Bajaj Auto makes andexports motor scooters, motorcycles and the auto rickshaw.

The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1946.

Over the last decade, the company has successfully changed its imagefrom a scooter manufacturer to a two wheeler manufacturer. Its productrange encompasses scooterettes, scooters and motorcycles. Its realgrowth in numbers has come in the last four years after successfulintroduction of a few models in the motorcycle segment.

The company, headed by Rahul Bajaj, is worth more than US$1.5 billion.

Bajaj Auto came into existence on November 29, 1945 as M/s BachrajTrading Corporation Private Limited. It started off by selling importedtwo- and three- wheelers in India. In 1959, it obtained license from theGovernment of India to manufacture two- and three-wheelers and it

went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977,it managed to produce and sell 100,000 vehicles in a single financial

year. In 1985, it started producing at Waluj in Aurangabad. In 1986, itmanaged to produce and sell 500,000 vehicles in a single financial year.

In 1995, it rolled out its ten millionth vehicle and produced and sold 1million vehicles in a year.

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Bajaj has grown operations in 50 countries by creating a line of value-for-money bikes targeted to the different preferences of entry-level

buyers.

NATURE OF THE BUSINESS

Bajaj Auto Ltd. is the largest exporter of two and three wheelers. WithKawasaki Heavy Industries of Japan, Bajaj manufactures state-of-the-artrange of two-wheelers. The brand, Pulsar is continually dominating theIndian motorcycle market in the premium segment. Its Discover DTSi isalso a successful bike on Indian roads.

The Bajaj Group is amongst the top 10 business houses in India. Its

footprint stretches over a wide range of industries, spanning automobiles(two- wheelers and three-wheelers), home appliances, lighting, iron andsteel, insurance, travel and finance.

Bajaj Auto, the flagship company of the Bajaj group, manufacturers two-wheelers and three-wheelers scooters. The company manufactures andmarkets scooters, motorcycles, passenger carriers and goods carriers.Bajaj Auto also trades spare parts and accessories. The company hasdistribution network in 50 countries and presence in India, Sri Lanka,Colombia, Bangladesh, Mexico, Central America, Peru and Egypt. It is

headquartered in Pune, India.

BAL has two main objectives: To cater the market needs oftransportation by

providing 2 wheeler and 3 wheeler vehicles and to produce the catalogueproducts to cater to the changing market requirements. Bajaj AutoLimited makes scooters for commuters. The company manufactures andsells small motorcycles, scooters, and three-wheeler vehicles. Motorcycleand scooter models include Avenger, Discover, Kristal, Platina, and

Pulsar. The three-wheelers are used for both passenger transportationand light delivery. Bajaj's technology partner, Kawasaki HeavyIndustries, has helped the company bring a number of bikes to theIndian market -- including the Kawasaki Bajaj Eliminator -- India's firstheavy cruiser. Nearly 3 million units of Bajaj's products are annuallydistributed to more than 50 countries. Bajaj Auto was founded in 1945.

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BACKWARD ANALYSIS

Founded in 1926, at the height of India's movement for independence

from the British, the group has an illustrious history. The integrity,dedication, resourcefulness and determination to succeed which arecharacteristic of the group today, are often traced back to its birth duringthose days of relentless devotion to a common cause.

Jamnalal Bajaj, founder of the group, was a close confidant and discipleof Mahatma Gandhi. In fact, Gandhiji had adopted him as his son. Thisclose relationship and his deep involvement in the independencemovement did not leave Jamnalal Bajaj with much time to spend on hisnewly launched business venture. His son, Kamalnayan Bajaj, then 27,

took over the reins of business in 1942. He too was close to Gandhiji andit was only after Independence in 1947, that he was able to give his fullattention to the business.

Kamalnayan Bajaj not only consolidated the group, but also diversifiedinto various manufacturing activities. The present Chairman of thegroup, Rahul Bajaj, took charge of the business in 1965. Under hisleadership, the turnover of the Bajaj Auto the flagship company has goneup from Rs.72 million to Rs.46.16 billion (USD 936 million),its productportfolio has expanded from one to and the brand has found a global

market. He is one of India's most distinguished business leaders andinternationally respected for his business acumen and entrepreneurialspirit.

COMPANY FLASHBACK

'Inspiring Confidence,' the tagline, has build up confidence, throughexcitement engineering, not only to domestic consumers but alsointernationally. Established just eight decades back in 1926 by JamnalalBajaj, the company has been vested with India's largest exporter of twoand three wheelers, 196,710 units in 2004-05, a great 26 per cent jumpover the previous year.

Bajaj Auto Ltd. sales have increased by approximately 21 per cent in theyear 2004-05, which exceeds Rs 65.4 billion, a record in the history ofthe company. The gross operating profit stands at Rs. 9.3 billion, again arecord. The profits after tax of the BAL are close to Rs. 7.7 billion, andthe pre-tax return on operating capital is at an impressive 80 per cent.

The strength of the company is its quality products, excellence in

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engineering and design, and its ability to delight the customers. ThePulsar, introduced in November 2004, is continually dominating thepremium segment of the motorcycle market, helping to maintain themarket superiority. Discover DTSi, one more successful bike on Indian

roads, is in the 'value' segment of the motorcycle market. It incorporatesa high degree of power with fuel efficiency of a 100 cc motorcycle.

BAL is committed to prevention of pollution, continual improvement ofenvironment performance and compliance with all environmentallegislation and regulations. They always believe in providing thecustomer 'value for money' and keeps a special eye upon quality, safety,productivity, cost and delivery.

COMPANY PROFILE

Bajaj Auto Ltd. is the largest exporter of two and three wheelers. WithKawasaki Heavy Industries of Japan, Bajaj manufactures state-of-the-artrange of two-wheelers. The brand, Pulsar is continually dominating theIndian motorcycle market in the premium segment. Its Discover DTSi isalso a successful bike on Indian roads.

MANAGEMENT

Rahul Bajaj ChairmanMadhur Bajaj Vice ChairmanRajiv Bajaj Managing DirectorSanjiv Bajaj Executive DirectorPradeep Shrivastava President (Engineering)Rakesh Sharma CEO (International Business)R C Maheshwari CEO (Commercial VehiclesS Sridhar CEO (Two Wheelers)

Abraham Joseph President(Research & Development)

Eric Vas President (New Projects)C P Tripathi Vice President (Corporate)Kevin Dsa Vice President (Finance)K Srinivas Vice President

(Human Resources)N H Hingorani Vice President (Commercial)S Ravikumar Vice President

(Business Development)

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QUICK FACTS

Founder Jamnalal Bajaj

Year of Establishment 1926Industry Automotive - Two & ThreeWheelers

Business Group The Bajaj GroupPresence Distribution network covers 50

countries.Dominant presence in Sri Lanka,Bangladesh, Columbia, Guatemala,Peru, Egypt, Iran and Indonesia.

Joint Venture Kawasaki Heavy Industries ofJapan

Registered & Head Office AkurdiPune - 411035IndiaTel.: +(91)-(20)-27472851Fax: +(91)-(20)-27473398

Awards & Accolades

Product Award Award BodyBajaj Discover 135 Bike of the Year 2009 NDTV Profit Car India

andBike India Awards

Pulsar Ranked First in 'TOP 4Ps Power Brand30 Awards

AUTOMOBILEBRANDS OFINDIA'

XCD 125 DTS-Si Bike of the Year 2008 Business StandardMotoring

XCD 125 DTS-Si Bike of the Year 2008 CNBC-TV18 Auto carAutoAwards

XCD 125 DTS-Si Award for motorcycle NDTV Profit Car Indiaup to 125cc - and2008 Bike India Awards

Pulsar 220 DTS-Fi Bike of the Year 2008 Overdrive

Pulsar 220 DTS-Fi Bike of the Year 2008 NDTV Profit Car India

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andBike India Awards

Pulsar 220 DTS-Fi IMOTY Award-Indian All Auto Mags-Motorcycle Overdrive,

of the Year 2007 Auto Car, BS, Bike TopGearPulsar DTS-Fi Bike of the year 2007 CNBC-TV18 Auto car

AutoAwards

Mr. Rajiv Bajaj Man of the year 2005 Auto car ProfessionaMr. Rajiv Bajaj Man of the year 2005 Bike IndiaBajaj CT 100 Motorcycle Total TNS Automotive

Customer

Satisfaction Study

2005Bajaj Discover DTS-i Bike of the Year 2005 OverdriveBajaj Discover DTS-i Indigenous Design of Overdrive

the YearBajaj Wind 125 Bike of the Year 2004 Business Standard

MotoringBajaj Wind 125 Two Wheeler of the CNBC AUTOCAR

Year 2004 AUTOAWARDS 2004Bajaj Pulsar DTS-i Bike of the Year 2004 ICICI Bank Overdrive

Awards 2004DTS-i Technology Auto Tech of the Year ICICI Bank Overdrive

2004 Awards 2004BAJAJ AUTO Bike Maker of the Year ICICI Bank Overdrive

2004 Awards 2004Bajaj Boxer AT KTEC BBC World Wheels BBC World Wheels

Award for BestTwo Wheeler underRs.30,000/-

Bajaj Pulsar 150 DTS-i BBC World Wheels BBC World WheelsAward for BestTwo Wheeler betweenRs.45,000/-to Rs.55,000/

Bajaj Pulsar 180 DTS-i BBC World Wheels BBC World WheelsAward for BestTwo Wheeler betweenRs.55,000

/-to Rs.70,000/-Bajaj Pulsar 180 DTS-i BBC World Wheels BBC World Wheels

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Viewers ChoiceTwo Wheeler of Year2003

Bajaj Pulsar Motorcycle Total NFO Automotive

CustomerSatisfaction Study2003

Bajaj Pulsar Bike of the Year 2003 ICICI BankOVERDRIVE

Awards 2003Bajaj Pulsar Bike of the Year 2002 Business Standard

MotoringBajaj Pulsar Most Exciting Bike of Overdrive

the Year2002Bajaj Eliminator Bike of the Year 2002 OverdriveBajaj Eliminator Most Exciting Bike of Overdrive

the Year2001

GROUP OF COMPANIES

Bajaj Auto Ltd. Bajaj Holdings & Investment Ltd. Bajaj Finserv Ltd. Bajaj Allianz General

Insurance Company Ltd. Bajaj Allianz Life Insurance Co. Ltd

Bajaj Financial Solutions Ltd. Bajaj Auto Finance Ltd. Bajaj Allianz Financial Distributors Ltd. Bajaj Auto Holdings Ltd. P T Bajaj Auto Indonesia (PTBAI) Bajaj Auto International Holdings BV Bajaj Electricals Ltd.

Hind Lamps Ltd.

Bajaj Ventures Ltd.

Mukand Ltd.

Mukand Engineers Ltd. Mukand International Ltd.

Bajaj Sevashram Pvt. Ltd.

Jamnalal Sons Pvt. Ltd.

Rahul Securities Pvt Ltd

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

The Hindustan Housing Co. Ltd.

MISSION AND VISION STATEMENT

MISSIONFocus on value based manufacturingFostering team work & enhancing the capability of the teamContinual Improvement

Total elimination of wastesPollution free & safe environment

VISIONTo attain World Class Excellency by demonstrating Value addedproducts to customers

OBJECTIVEBajaj Limited is to cater the market needs of transportation by

providing 2 wheeler and 3 wheeler vehicles. BALW has beenproducing the catalogue products to cater to the changing marketrequirements. Based on the customer feedback, improvements are

being made continuously in the existing products.

GOALTo catapult Bajaj Auto as the countrys largest automobilecompany.

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CULTURES AND VALUES

BRAND IDENTITY

Brand is the visual expression of our thoughts and actions. Itconveys to everyone our intention to constantly inspire confidence.Our customers are the primary audience for our brand. Indeed, ourBrand Identity is shaped as much by their belief in Bajaj as it is byour own vision.Everything they do must always reinforce the distinctiveness andthe power of their brand.They can do this by living their brand essence and by continuouslyseeking to enhance their customers' experience.

In doing so, they ensure a special place for themselves in the heartsand the minds of customers.

BRAND ESSENCE

Brand Essence is the soul of their brand.Their brand essence encapsulates their mission at Bajaj.It is the singular representation of terms of endearment with theircustomers.

It provides the basis on which they grow profitably in the market.Their Brand Essence is Excitement.Bajaj strives to inspire confidence through excitement engineering.Blending together youthful creativity and competitive technologyto exceed the spoken and the implicit expectations of customersBy exploring the unknown and thereby stretching themselves

towards tomorrow, today.

BRAND VALUES

They live their brand by values of Learning, Innovation, Perfection,Speed and Transparency.Bajaj will constantly inspire confidence through excitementengineering.

Learning: Learning is how they ensure proactivity. It is a valuethatembraces knowledge as the platform for building well informed,reasoned, and decisive actions.

Innovation: Innovation is how they create the future. It is a valuethat provokes them to reach beyond the obvious in pursuit of that

which exceeds the ordinary.

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Perfection: Perfection is how they set new standards. It is a value that

exhibits their determination to excel by endeavouring to establish newbenchmarks all the time.

Speed: Speed is how they convey clear conviction. It is a value that keepsthem sharply responsive, mirroring our commitment towards their goalsand processes.

Transparency: Transparency is how they characterise themselves. It isavalue that makes them worthy of credibility through integrity, of trustthrough sensitivity and of loyalty through interdependence.

ORGANISATIONAL STRUCTURE

India's premier automotive company, has unveiled a focusedorganizational restructuring for the Auto business. With thisrestructuring, the existing business roles and responsibilities at thecompany has been strengthened and enhanced to ensure greateroperational empowerment and effective management.

The five pillars of this new structure, called strategic units, are,

R&D Engineering Two-wheeler business unit

Commercial vehicles business unit and

International business unit

Sanjiv Bajaj said that they are trying to make the organisationalstructure more responsive. They have brought down the number oflayers between the chief executive officer (CEO) and the shop-floor levelto four, which is in line with existing standards. They are further looking

at cutting down on one more layers in the organisational structure.

This re-organisation, according to him, is a reflection of the changingmarket structure and dynamics. Bajaj Auto Ltd also plans to invest inmarketing, sales and the R&D side.

BAL had recently announced a voluntary retirement scheme for middle-level management covering around 400-500 people of which 170 odd,opted for the VRS. BAL has previously stated that it intends to bringdown its workforce level to 10,000 from its current 13,000 odd levels.

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

BAJAJ: THE TURNING POINT

The early 1990s saw a recession in the Indian two-wheeler market.Overall sales of two wheelers declined by 15% in 1991 and 8% in 1992.This period saw a steep rise in fuel prices which resulted in consumersplacing greater emphasis on fuel efficiency when purchasing a new two

wheeler.

However, even as late as 1997-98, the scooter segment was the largest

sub segment in the two wheeler market. Scooters, with 42% of themarket (in terms of unit sales), were followed by motorcycles (37%), andmopeds (21%).

BAJAJ FIGHTS BACK

By the end of FY2000, the numbers clearly indicated that consumerpreference had shifted firmly towards motorcycles with four-strokeengines and industry watchers predicted that this trend would continue.

Geared scooter sales registered a fall of 41% in 2001. The markethas shifted to motorcycles. We will have to follow the trend, says VenuSrinivasan.

BAL realised though rather belatedly, that it would have to cater to thechanging consumer tastes and preferences, if it had to survive. Rajiv,

who later agreed that BAL had been slow in reading the demandpattern said that the company had failed to anticipateconsumer behaviour.

THE FALL OF AN ICON

HAMARA BAJAJ

Ad campaign helped Bajaj position CHETAK:

A geared model-scooter occupying near iconic status.

In January 2006, BAL announced that it had stopped production of

Chetak. With this announcement, BAL closed a major chapter in itshistory. Rajiv said that it was a history he would like to forget. His

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company has lived too long on nostalgia... holding on to anything fromthe past is a sign of weakness.

Change in Communication Strategy

DISTINCTLY

AHEAD

INSPIRING

CONFIDENCE

HAMARA BAJAJ

INSPIRING CONFIDENCE

Bajaj Launched a series of motorcycle in an attempt to capture marketshare.In 2001, BAL showed slice of life situations of new ageIndia.Analyst felt that by 2004, BALs image had undergoneconsiderable change. But In spite of changing its focus & strategyfrom scooters to motorcycles BAL - MD felt that:

"Like Volkswagen Beetle, the product (Bajaj Chetak) hadlost its relevance."

"We believe it is not good enough to be better, it isimportant to be distinct.

This Lead to the strategy of

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DISTINCTLY AHEAD

BAL announced new corporate strategy in mid 2007. Its USP Styling &Technology. Bajaj repositioned itself aggressive & fast-paced. Theirnew strategy Distinctly Ahead focused on 3-core values:

Innovation, Speed & Perfection.

The ad featured pay-off line,

Alag Andaaz, Alag hai Khoj, Rakhe Aage, Hamari Soch.

Bajaj launched Bajaj Pulsar flagship brand- based on this strategy.

BCG MATRIX FOR BAJAJ

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SWOT ANALYSIS

STRENGTH WEAKNESS

High economies of scale. Hasn't employed theHigh economies of excess cash for long.scope. Centralized paternalistic

Legacy of brand name. management style. Not aWidespread distribution global player in spite of

network. huge volumes.

No collaboration with any

of the foreign players.

OPPORTUNITIES THREATS

The growing gearless The competition catches-

trendy scooters and up any new innovation inscooterette market. no time.

Can use the existing Threat of cheap imported

R&D capabilities for motorcycles from China.

new models. Tough competition facedCan invest and grow the by foreign as well aslife style segments. domestic players.

PRODUCT PROFILE

Two-wheelers: domestic

The domestic two -wheeler market is dominated by motorcycles. Itsgrowth in 2006-07 needs to be viewed in two clearly distinct phases. Forthefirst three quarters of the year, the two-wheelers witnessed veryhealthy growth, and it was a part of the continuing growth story of theprevious few years. In the last three months of the year, however, overallmarket growth slackened considerably largely due to steadily risinginterest rates and constraints on credit growth due to actions taken bythe Reserve Bank of India, banks and financial institutions tocontrol non-food credit.

However, this credit squeeze is, at worst, a short term phenomenon. Thefact is that over the last four years, India has achieved a compoundannual GDP growth rate well in excess of 8 per cent - something that isexpected to continue over the future. Over the last decade, household

incomes have increased significantly in urban as well rural India and,

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with it, consumer spends - especially on non-food items and durables.Two-wheeler

penetration still remains very low by any standard. Therefore, the longerterm story for two-wheeler is an extremely good one, where the country

is bound to see healthy double-digit market expansion in the years tocome. In 2006-07, the industrys overall sales of two wheelers grew by 12per cent from 7.57 million to 8.47 million units. Motorcycles sales grew

by 14 per cent from 6.2 million to 7.1 million. The share of motorcycles inthe two-wheelers segment for the industry as a whole increased from 82per cent in 2005-06 to 84 per cent in 2006-07.

Chart A depicts the industry sale of two-wheelers over the years.Chart A: Industrys sale of Two-Wheelers

MotorcyclesBajaj Autos sale of motorcycles by volume grew by 24.4 per cent in

2006-07 - which was significantly greater than that of the industry.Consequently, the Company has continued to increase its market sharein motorcycles, which stands at 33.5 per cent in 2006-07, compared to

30.8 per cent in 2005-06.

Table 1 gives the data for the last five years.

As in the previous year, this Management Discussion and Analysisanalyses the performance of Bajaj within different broad segments of themotorcycle industry:

1. The high performance segment: This includes motorcycles in theengine class of 150 cc and above. Bajaj Auto competes here with the

Pulsar range and Avenger DTS-i.

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2. The 125 cc segment: Bajaj Auto competes in this category withDiscover DTS-i 125 and therecently launched Discover DTS-i 135.

3.The 100 cc segment: Here, Bajaj Auto competes with the Discover

110, Platina and the CT-100.

Chart B : depicts industry-wise sales across these three segments

Chart B: The Market Segment for Motorcycles

The High Performance Segment

( 150cc)

With several variants of its Pulsar DTS-i and the Avenger DTS-i, Bajaj Autohas a dominating share (61%) in this segment. In 2006 -07, the Pulsar DTS-i (the 150 cc and 180 cc models) was upgraded with sportier looks andindustry -first features like digital speedometer console, LED tail lamps andself cancelling direction indicators. Despite launches by the competition,Bajaj continues its domination in this category due to these and other

product initiatives. It is a case of being Distinctly Ahead

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- the Pulsar range effectively sets the benchmark for the rest of theindustry to follow.

Some other initiatives include a new variant, the Pulsar 200 DTS-i,

which was launched in January 2007 entirely through Bajaj Autos ownProbiking showrooms. It has been received very well by the consumers.

Yet another upgrade, the Pulsar 220 DTS-Fi, was pilot launched in April2007. The Pulsar DTS-Fi (fuel injection) sets a new benchmark in thehigh performance segment with a fuel injected engine and features likeprojector headlamp, clip on handle bars and rear disc brake.

Due to these upgrades and new launches, sale of the Pulsar range hasgrown to 40,000 vehicles per month - an increase of 24 per cent over last

year.

The 125cc Segment

Bajaj Auto is the pioneer in this segment through its Discover DTS-i. Itssuccess has spawned a host of introductions from competitors. Despiteheightened competition, Bajaj Autos share in this segment has grown,and stands at 32 per cent with a volume growth of 28 per cent in 2006-07 over last year. To create greater play in this space, a newer version of

the Discover DTS- i with a 135 cc engine has been launched in April2007. This, along with a styling upgrade on the existing 125 cc DiscoverDTS-i, is expected to continue the Companys momentum in this growingsegment. Bajaj Auto will demonstrate what Distinctly Ahead means

with the introduction of an all-new engine platform in the second quarterof 2007-08. This will be a model that has great style as well as a robustdesign; it will show how customers can enjoy low emissions at low costs;and demonstrate that there can be both good performan ce and great fueleconomy.

100cc Segment

Although the largest segment in the motorcycle market, it has beenfalling in percentage terms over the last few years. Moreover, it has been

beset with intense competition from all players, accompanied byaggressive pricing initiatives and promotions. It is no secret that withheightened price sensitivity and competition, this segment is becomingincreasingly commoditised. While the domestic 100 cc segment accounts

for 41 per cent of the companys motorcycle sales (numbers) itcontributes less than a quarter of the Companys revenues. Hence,

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reduced margins here affect Bajaj Auto far less than the competition, for

which this is a more dominant play.

However, Bajaj Auto will continue to aggressively play in this segment

and expand both markets as well as its market share. Equally, at the topend of

the 100 cc space, it will encourage consumers to migrate to the 125 ccand 135 cc Discover DTS-i and even the Pulsar 150 cc variants. Thismigration to higher value is expected to intensify with the Companyslaunch of new motorcycles in the upper end.

Other Two-WheelersWith motorcycles accounting for 84 per cent of the two-wheeler market,

most of the other segments like geared scooters, mopeds and step-thrushave

shrunk during 2006-07. Sale of geared scooter for the industry has fallenby 47 per cent, from 198,600 in 2005-06 to 104,000 in 2006-07. Theun-geared segment has registered a growth of 11 per cent, from 791,676in 2005-06 to 878,829 in 2006-07. Bajaj Auto introduced its un-gearedKristal DTS-i towards the end of the year. This vehicle has scored well oncustomer satisfaction

and, within three months, has recorded an average monthly volume of2,700 vehicles.

Three-WheelersDomestic demand for autorickshaws is being driven by the regulatoryneed to replace earlier vehicles with clean fuel models. In earlier years,Delhi, Mumbai and Ahmedabad had legislated in favour of CNG/LPG

vehicles. 2006-07 saw the addition of a number of cities, includingHyderabad, Bangalore, Chennai, Lucknow, Kanpur, Agra, Kolkata,

Gurgaon, Faridabad and Ghaziabad. Bajaj Autos sales in these citiescontributed significantly to its growth in the small passenger segment.

The large diesel passenger autorickshaw segment has been enjoyingfairly rapid growth. Bajaj Auto is in this space with its model, the Mega -

which has been upgraded in the current year, and has been well receivedin the market. The Company will also be launching a CNG-based Mega inthe second quarter of 2007-08, and looks forward to a more aggressivepresence in this market in 2007-08.

The sub-1 ton cargo segment also has shown a robust growth at 15 per

cent, and Bajaj Auto has grown in line with the industry, with its market

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share remaining at a little over 26 per cent. Like the Mega, the Companyhas launched the CNG

version of its cargo vehicle in cities where diesel vehicles are nowbanned.

Table 2 : Three-wheeler sales and share of Bajaj Auto (innumbers)

In its efforts at being Distinctly Ahead, Bajaj Auto has introduced afirst of its kind two -stroke digital direct injection three-wheeler, whichoffers customers 30 per cent higher fuel efficiency and superioroperating performance.

Moreover, the Company has been able to de-risk the vagaries of thedomestic market by having around 45 per cent of its total three-wheelersales in 2006-07 coming from exports - up from 30 per cent in theprevious year.

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MARKET SHARE

Mkt share Motorcycle/Stepthrou's2008-09

44%24%

6%

18%

Bajaj Auto

Hero Honda

TVS

Yam aha8%

Mkt share 3-wheelers 2008-09

2%

15%

Atul Auto

9%Bajaj Auto

Bajaj tempo

70%4%

M&M

Piaggio vehicles

Mkt share Scooter/Scooterette 2008-09

25%Bajaj Auto

HMS39%

TVS

17% Others

19%

scooters/scooterette moped motorcycle/step-throu's

6000000

4000000

2000000

0

FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03

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COMPETITORS

Last Price Market Sales Net Profit Total

Cap. Turnover Assets

(Rs. cr.)

Hero 1,700.25 33,951.87 12,356.88 1,281.76 3,879.24

Honda

Bajaj Auto 1,712.35 24,774.88 8,810.36 656.48 3,439.69

TVS 65.90 1,565.41 3,736.67 31.08 1,719.11

Motor

LML 9.55 78.30 167.77 -51.62 -26.48

Kinetic 25.15 53.00 15.70 97.61 -5.18

Motor

Bajaj Auto V/s Hero Honda

Comparison

Attributes Bajaj Auto Hero Honda

P/E Ratio 31.74 25.75

EPS 45.39 64.18

NET PROFIT MARGIN(%) 7.40 10.30

LAST DIVIDEND (%) 220 1000

RETURN ON AVG. EQUITY 38.92 33.72

GROSS PROFIT MARGIN(%) 11.06 12.75

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DISTRIBUTION NETWORK

Bajaj Auto is restructuring its marketing and distribution network to

address the different requirements of the urban and rural markets. Thecompany has recently launched its high-end bike dealership Probiking and is now in the process of categorising its existing 479 dealershipnetwork into urban and rural dealerships.

Rajiv Bajaj, MD, Bajaj Auto said, Besides Probiking, which is ourchannel for high-end bikes, we will split the rest of the two-wheelerdealer network into rural and urban. This is being done to cater to thedifferent needs of the rural and urban customer in terms of product,infrastructure, working capital, financing and servicing.

As competition hots up in the Indian motorcycle industry, Bajaj Auto Ltdand TVS Motor Company are chalking out aggressive marketing plans torace ahead in this sector. In a bid to regain its leadership position, Bajaj

Auto is planning to expand its distribution network to reach out to awider target audience. Likewise, TVS Motor Company is all set to extendthe number of its dealership and service centres in the near future.Clearly, Bajaj Auto and TVS Motor are shifting gears.

On Bajaj Autos distribution strategy, says Bajaj Auto vice-president(business & product development) RL Ravichandran: We plan toexpand our dealership network and service centres to improve ourpenetration into smaller towns across the country.

In fact, we plan to increase the number of dealerships and servicecentres by 20 to 25 per cent. With this move, we will be able to covertowns with a population of two to three lakh.

Incidentally, the company is all set to unveil its entry-level motorcyclecalled BYK this month. Priced at Rs 30,000, BYK is positioned as a

stylish bike targeted at the entry-level audience. Ogilvy & Mather Indiawill be designing the communication strategy for the new bike from theBajaj stable. As part of its offline promotion strategy, the companyrecently hosted the Bajaj Boxer Indian Telly Awards 2002 on Star Plus topromote its Bajaj Boxer range.

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POSITIONING STRATEGIES

Ever since losing its leadership position, BAL was trying out new

strategies including use of new technology and new marketingcommunication campaigns. For instance, in the early 2000s it startedfocusing more on the motorcycle market with new product launches,complemented by new communication campaigns to inject vibrancy intothe Bajaj brand.

The ad spots launched in late 2001 showed 'slice of life' situations of"new age"India. Analysts felt that by 2004, BAL's image had undergoneconsiderable change in the mind of the target audience. BAL reinforcedthis through another campaign called 'Inspiring Confidence' that year.

In addition to bringing change in its products and creating brands thatinspired confidence, BAL wanted its products to be 'distinctly ahead' inthe wake of growing competition in the intensely competitive automobilemarket.

BAL's new corporate strategy announced in mid 2007, 'Disinctly Ahead',was aimed at embedding these changes in the collective consciousness ofthe company. It was aimed at offering consumers products that were

unique and at the forefront compared to its competitors.

The 'Distinctly Ahead' strategy focused on three core values - innovation,speed, and perfection. Commenting on its new strategy, Rajiv Bajaj,Managing Director, BAL, said, "We believe it is not good enough to be

better, it is important to be distinct.

That is a filter that we apply to everything we do - be it productdevelopment, manufacturing processes or communication development.

Our flagship brand Pulsar is the strongest evidence of this philosophy. Itis only a differentiated offering that customers see value in and aspire

for."3

The company launched a 'Distinctly Ahead' communication campaign,created by ad agency Lowe, to signify its new aggressive and fast pacedimage.

The ad showed a 220 Pulsar DTS-Fi morphing into several 220 Pulsarsas they raced with each other. The ad featured the pay-off line, "Alag

Andaaz, Alag hai Khoj, Rakhe Aage, Hamari Soch"and a background

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theme music that was a much peppier version of the original 'HamaraBajaj' theme music. Through this, the company sought to communicatethat BAL lays down its own standards and principles and believes incompeting with itself.

Bajaj Auto's new brand strategy in motorcycles paid off well with thecompany on course to recording its best year ever in terms ofprofitability and market share.

Its market share, which was barely 17 per cent a year ago, has increasedsince to 35 per cent today. We have more than doubled our marketshare in a year and would be at our highest level by the end of thisquarter, Mr Rajiv Bajaj, Managing Director, told Business Line.

The confidence stems from the fact that there are still three months to gofor the recently launched Pulsar 135 to consolidate itself in the marketand start clocking volumes. Bajaj Auto has targeted a monthly output of100,000 Pulsars by end-March 2010 and believes the new 135cc will playa key role in achieving this goal. At present, the Pulsar 150, 180 and 220

versions together account for around 60,000 units each month.

Discover on track

The Discover is on track with its targeted monthly numbers of 100,000units. This has been spurred largely by the new 100cc version which isdoing over 70,000 units a month with the Discover 135 making up the

balance.

Bajaj Auto's comeback script this fiscal began with the launch of the newPulsar in the first quarter followed by the 100cc Discover in the secondand the 135cc Pulsar in the third. No new launches have been scheduledin the January-March period but the first quarter of 2010-11 is likely tosee another new motorcycle making its debut.

While Mr Bajaj did not comment on what this vehicle was likely to be,market grapevine suggests that it could be a new Discover version whichis keeping in line with the company's focus on these two brands (thePulsar being the other) as key growth drivers.

We have reinvented our marketing strategy and this has beenvalidated by the growth in market share thanks to the Pulsar andDiscover. The key lies in specialisation especially when it meansaddressing a bigger market, Mr Bajaj said.

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Had the company been present only in a couple of States in India, MrBajaj averred, it would have had an array of products in the two-wheelerspace. On the other hand, the product portfolio would have beentrimmed to scooters and motorcycles for a bigger canvas like India, and

narrowed down even further to only motorcycles for the global arena.

This is precisely what Bajaj Auto has done today given that itsinternational business is an important part of its overall strategy.

Sacrifice is a key part of strategy and is essential to its success.Hence, our scooters had to make way for motorcycles, Mr Bajaj said,referring to the reaction across the country to his recent statement onexiting the scooter segment.

Brand positioning

Similarly, the company also learnt that divergence was anotherimportant part of its focus on specialisation, with the Discover clearlypositioned for the commuter segment and the Pulsar as the sporty'option. The features, therefore, had to be exclusive for each brand interms of looks and ride while ensuring profitability.

From Bajaj Auto's point of view, the commuter and sporty segments arethe backbone of India's motorcycle market. And even while it has bikesto offer from the KTM and Kawasaki stable, these largely remain in theniche category as off-road and on-road performers translating intolimited numbers.

As Mr Bajaj said, an effective strategy was finally about strong brandpositioning at the front-end while keeping things simpler at the back-endcomprising design, manufacturing and development.

MARKET SPEND

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The above graph shows the market spend for Bajaj Auto. It has taken thedata for three years to see the trend in the spending.

As seen from the graph, the expenditure for forwarding, freight andpackaging has been increasing over the years and especially for the year2008-09. This may be due to the fact that in the last 2 years:

Bajaj sales from the export market increased by 31% whereas thedomesticsales fell by around 23%. Hence, the transportation costs etc.shoot up due to the exports.

Bajaj focused more on executive and premium bikes which are

transported in small lot sizes and the packaging etc are moresophisticated thus resulting in high forwarding, freight and packagingcosts.

The advertising costs for the year have sharply fallen in the year 2008-09. It is mainly due to the recession that the company has cut down onthese costs. The major saving was done on the print ads and hoardings.The sales promotion expenses have fallen in year 2007-08 and againincreased in year 2008-09. The increase in year 2008-09 is becauseBajaj has forayed into premium bikes, which is a new segment in India,and was backed by heavy sales promotions to boost the sales.

The above graph shows the percentage breakup of the three components.The highest cost is the forwarding, freight and packaging, followed byadvertising expenditure and sales promotion expenditure.

The graph shows the advertising and sales & expenditure costs as apercentage of sales.

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From the above graph it can clearly make out that Bajaj Auto reliesmore on its sales& distribution. Hence, it can be safely concluded thatBajaj Auto focuses more on the push factor for its sale.

GLOBAL PRESENCE OF BAJAJ

Bajaj Auto continues to be Indias largest exporter of two and threewheelers. During 2008-09, the company exported 772,519 two andthree-wheelers recording a growth of 25 percent over 2007- 08.Exportsnow constitute 37 percent in terms of volume and 35 percent in value ofnet sales.

The company currently exports to over 30 countries in Latin America,Africa, the Middle-East, South and South-East Asia. Bajaj Auto has a

dominant presence in the countries of Sri Lanka, Columbia, Bangladesh,Central America, Peru and Egypt, and is looking to increase its share inthe African market.

The company has commissioned an assembly unit in Nigeria with thehelp of its distributor, to cater to the growing demand in the Africanmarkets. It already has an assembly plant in Indonesia and is looking atsetting up a plant in Manaus, a Free Trade Zone, in Brazil by 2010-11,after delaying the decision for six years. A distributor of Bajaj Auto has aplant in Egypt. They are also planning to set up plants at Columbia andIran.

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CORE COMPETENCIES

Bajaj Auto is one of the oldest and the second largest two wheelermanufacutrer in India. In addition to coping with fierce competitionfrom other players in the two wheeler segment, it also has to protect itsmarket share from the impending onslaught of low price small cars suchas Tata Nano. Holding on to its postion in such a challenging marketenvironment requires innovative strategies and deep understanding ofconsumers needs.

Bajaj Auto, sitting on surplus funds of over Rs 7,000 crore, wasinundated with offers to diversify from telecommunications and powergeneration to software but stuck to core business of automobiles. MrBajaj said that any company, which wants to survive, must have quality

and service orientation. The automotive sector was in its death throeswith some of the major American automotive manufacturers on theverge of bankruptcy, he said.

There are several reasons why Bajaj should concentrate on its coresegment, i.e. greater than 125cc segment. With the introduction of DTS-iand DTS-Fi technology, Bajaj Auto Limited has led the way in pioneeringtechnology along with style.

The Profitability Pyramid in Exhibit 4 shows that the margin is very low

in the sub -125cc segment but volumes are high. BAL wants to shift usersfrom 100, 115cc segment to 125cc and higher. Thus Bajaj not only wants

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to play on the margins but also wants to increase the market share of125cc bikes. With its recent launch of XCD 125cc, it has brought incompetition for its own 100cc model, Platina by delivering a bike that is

better in all respects (including fuel efficiency).

Thus, we conclude that Bajaj wants to make a slow departure from100cc segment. It has already stopped production of the Discover 125and will continue production of the Platina until the demand for the100cc remains. It has priced the XCD between the Platina and theDiscover and in the future, would ideally wish to project the XCD 125as its base model.

SUPPLY CHAIN MANAGEMENT

Vendors Bajaj Auto has a consolidated base of 180 vendorssupplying components to all Bajaj Autos plants. A large number of

vendors are located either near Pune or Aurangabad. Those that are farare encouraged to tie up with third party logistics providers, who along

with local vendors supply multiple deliveries daily to Chakan & Walujplant. 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 Autosrequirements are sourced from within the state of Maharashtra. To

improve quality, Bajaj Auto has also begun actively assisting its suppliersin finalizing joint ventures with counterparts in Japan, Italy, Taiwan &Spain.

Dealers- Bajaj Auto has a network of 422 dealers and over 1,300authorized service centers. The company plans to increase the number ofdealers to 500 by this financial year. A large number of these newdealerships are planned in semi-urban & rural areas.

During the financial year 2007-08, the company extended BASS (BajajAuto Service Standard) to standardize the workshops of 250 dealers & 50authorized service centers. These programmers included a uniform

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external & internal look. This initiative has improved work hygiene,promoted consistent & better service quality, & greater productivity.Faster turnaround of serviced vehicles coupled with higher spare partssales in converting such workshops into independent profit centers for

the dealers.

Management of Global Supply Chain

With operations spanning to such vast geographies, managing a supplychain globally becomes more and more complex. In countries whereBajaj perceives a strong market potential, they establish a tie up with onemajor industrial establishment eager to invest in the project. Thisinvestment may include setting up strategic manufacturing or assembly

units, apart from a well-established nation-wide network for marketing,distribution and after sales services. These investors who form allianceswith Bajaj Auto are termed as Business Partners.

Bajaj Auto offers a number of services to its business partners. Theyinclude:

Training in sales, service and spare parts management based on theBajaj distribution system.

Active support for setting up manufacturing facilities overseasincludingtransfer of technical know-how.

Assistance in setting up an assembly plant for assembly of vehiclesfromcomplete knocked down (CKD) kits.

Selecting of machinery and equipment and training of technical

personnel, all in a phased manner as required by the regulations inthe recipient country.

Active support in setting nation-wide dealer network, alsoinvolving identification and recommending suitable partner who

would assist the distributor in Business growth.

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FINANCIAL ANALYSIS OF BAJAJ AUTO

Liquidity and Solvency ratios

This ratio suggests the short-term liquidity position of the firm.The followingratios are to be calculated.

(i) Current Ratio.

Analysis:-Current ratio is higher in 2009 as compared to 2008. Thereis decreased all current assets except other receivables which increasedin 2009. The net current assets increased by Rs.238.62 cr. in 2009 andat same time current liabilities increased by Rs.200.9 cr. in 2009. Itmeans Bajaj Auto Ltd., has sufficient current assets to pay currentliabilities. Short term solvency of the company is satisfactory.

(ii) Acid Test Ratio.

Analysis:-We have seen that the company had a higher current ratio in2009 and was able to meet its short term obligations as compared to2008. Where as the quick ratio identifies the role played by theinventories in this context. Therefore the ratio shows that in year 2009 ithas increased as compared to 2008 due to the fact that the quick assetsis increased by Rs.164.14 cr. only and current liabilities have increased

by Rs.583.12 cr. The company is able to meet its short term obligations.

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(iii) Debt Equity Ratio

Analysis:-

This ratio says that both year 2008 and 2009 as same. In 2009 increaseddebt by Rs.236 cr. That is increased in Debenture, Long Term loan,Redeemable Preference shares. And equity means Equity share capita,

Preference shares other than redeemable, Reserves and surplus, Lossesand Fictitious assets increased by Rs.282.1 cr. in 2009 tear.

(iv) Inventory Turnover Ratio.

Analysis:-

The inventory turnover ratio in the year 2008 was 28.19 which indicatethat 28.19 times in a year the inventory of the firm is converted intoreceivables or cash. However, in 2009, the inventory turnover ratioslightly decreased to 27.47. This was due to the fact that the Bajaj AutoLtd. in 2009 invested more then 0.72 times the inventory in 2008.

(v) Fixed assets Turnover.

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Analysis:-

According to the calculations above the productivity of fixed assets inyear 2009 is not better than it was in previous years. In 2008, it was1.79% and now it has been slightly decreased to 1.51%. This change was

brought about by decreased in total sales by Rs.126.98 cr., where as thefixed assets increased only by Rs.845.84 cr.

Recent News on Bajaj Auto

Bajaj-Renault-Nissan to drive small car (ULC)

Bajaj Auto has redrafted its bike strategy for this fiscal that will see the

Pulsar and Discover act as the key growth drivers. The script goesaccording to plan, it has have set ourselves a target of 200,000 unitsfrom both brands by March 2010. Bajaj Auto and the Renault-Nissan

Alliance to build the car code- named ULC with wholesale price rangestarting from 2500 USD. All this is part of a renewed thrust by thecompany to focus on two key requirements of the market which, over the

years, have pretty much remained constant for either fuel-efficientcommuter 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 thesporty slot, with monthly sales of over 40,000 units.

Bajaj Auto Ltd has announced that the company may launch a small carin the year 2010 in India. The second largest two wheeler maker in India

will enter the small car segment in partnership with French car giantRenault and Nissan. The small car prototype was unveiled today and the

company wants to promote the vehicle as economical and affordable car.

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

Bajaj Auto Ltd = 50 per centBajaj Auto, which is yet to sign ajoint 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 centThe ULC project was conceived as a three-way alliance whereRenault would hold 25 per cent equity.

Nissan = 25 per centThe ULC project was conceived as a three-way alliance where Nissaan

would hold 25 per cent equity.

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

way alliance where Bajaj would hold 50 per cent equity with Renault andNissan accounting for 25 per cent each. Bajaj-Renault-Nissan will missits 2011 deadline on its ultra-low-cost car project. Bajaj Auto managingdirector 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 thedevelopment.

Bajaj Auto Launches RE600 Cargo VehicleBajaj Autos R&D team has created this unique product to deliver the

highest mileage and lowest operating costs in the commercial 3-wheelercategory. RE600 offers best in class mileage which is at least 5 km perliter of diesel more than other vehicles. It has a robust solid constructionand comes at an attractive price point which makes for the lowest cost ofownership. RE600 is priced at Rs.1, 03,686. The RE 600 is beinglaunched phase wise across the country from September 2009 onwards.Advantage of RE600:

The RE 600 is specially conceived and developed for cargomovement in congested cities & towns.

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It has the lowest turning radius for high maneuverability even on

narrow roads, has twin front suspension. A spacious cabin for comfortable long hrs of drive.

It has high torque for quick pick-up even with heavy loads and has

ease of frequent and quick start-stop cycles. Making it the best suited vehicle for in-city operations. The RE 600

has thus created a new category in the small commercial vehiclesegment.

Bajaj Auto to launch Kawasaki Ninja:The Ninja 250R is considered to be an entry-level sports bikemanufactured by

Japanese two-wheeler maker Kawasaki. The motorcycle would be pricedbetween Rs 1.50 lakh and Rs 2 lakh in India. Till the mid of this year,four models of Kawasaki Ninja 250, sports roadster ER-6n, supersports bike Ninja ZX6R.

Ninja model is the most popular model in US, Europe and Japan.Bollywood star John Abraham had used this bike showing someunbelieving stunts in super-duper hit movie Dhoom. Since then these

bikes became the dream bikes for many sports bike lovers.

Ninja-250 is a very powerful bike containing an eight-valve DOHC,liquid-cooled 250cc fuel injection engine that develops 30bhp of peak

power with attached a six-speed gearbox. It generates 30 PS at 10,500rpm. Its 6-speed transmission makes it a versatile performer.

Kawasaki is Bajajs reliable technical partner since mid 80s andpromised to assist Bajaj in all technical aspects with providing thenecessary service training and parts back-up while Bajaj auto will handlethe distribution and marketing department.

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Bajaj to stop scooter production, focus on motorcycles

The jingle promised that it would stay with us for today and tomorrow asa Strong Symbol of a Strong India, and two generations grew up

humming the tune. But finally when the India of the license-permit rajgets to take its seat at the global high table, the Scoters that got us thereis fading away.

Bajaj Auto announced on Wednesday that it is exiting the scootersegment altogether, bringing the curtains down on its iconic productline. The company had stopped making the Chetak, once the worldslargest selling scooter, almost three years ago, and according to its MDRajeev Bajaj, it will stop production of its non-starter Kristal series byend of the current fiscal.

This is a definite watershed moment, because its almost like detachingourselves from what constitutes middle class India, and the set of valuesthat constituted middle class India, says Santosh Desai, MD and CEO ofFuture Brands and a marketing and advertising expert.

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Recommendations

The impression of Bajaj in the minds of the public is that it is a moped &

athree-wheeler company, & it is a very orthodox & unhappening imagein 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 & movefrom its traditional mindset (Rahul Bajaj had once stated that he hadonly one department in his company the dispatch department & thathe did not require a marketing department.)

Bajaj should aggressively push sales of higher margin products &launch new products in niche segments.

Bajaj should also try & push for tie-ups & Joint Ventures in foreignmarket & try & increase its export base. (E.g. Tata Motors tie-up withRover for marketing of India & Joint Venture with Senegalgovernment 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 productioncapacity & provide economies of scale.

Increase its dealer network to tap rural growing markets by going infor tie-ups & offering better margins to dealers.

The key to Bajaj real success lies in Research & development. How itis able to use value analysis & value engineering by adding newfeatures to its existing product line & how it is able to come out withnew product for different niche markets. Analysis of differentalternatives like outsourcing, in house, purchase & tie-up should beevaluated.

BIBLIOGRAPHY

WWW.GOOGLE.COMWWW.BAJAJAUTO.COMWWW.DOCSTOC.COMWWW.MONEYCONTROL.COM
http://www.google.com/http://www.bajajauto.com/http://www.docstoc.com/http://www.moneycontrol.com/http://www.moneycontrol.com/http://www.docstoc.com/http://www.bajajauto.com/http://www.google.com/

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