the bajaj story

8/6/2019 The Bajaj Story

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T h e B a ja j S to ry


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Overview Founded in 1926 by Jamnalal BajajHis son, Kamalnayan Bajaj, then 27,

took over the reins of business in1942

Rahul Bajaj Took charge in 1965Under his leadership, the turnover from

Rs 7.2 croreto almost Rs 17,000 crore

Change in image from a scooter to atwo-wheeler manufacturer

Real growth in last 4 years Mostly inthe motorcycle segment.


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BackgroundMid-1940s - BAL started as an importer of two-

and three-wheelers1959 - Obtained license from the Government

of India to manufacture two- and three-wheelers and went public in 1960

Early 1960s - BAL, in collaboration with Piaggio,started manufacturing Vespa brand scootersat its plant near Pune, Maharashtra

Early 1970s - Collaboration with Piaggio comingto an end; BAL started manufacturingscooters under the Bajaj brand

1972 - BALs first scooter model Chetakintroduced under the Bajaj brand


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Achievements1977 BAL managed to produce and sell

100,000 vehicles in a single financial year.1985 - It started producing at Waluj near

Aurangabad.

1986 - It managed to produce and sell 500,000

vehicles in a single financial year.1986 - BAL entered into a technical partnership

with Kawasaki Heavy Industries & launchedthe Kawasaki - Bajaj.

1995 - It rolled out its ten millionth vehicle andproduced and sold one million vehicles in ayear.


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The Scooter Story

1970s and 1980s Scooters dominated theIndian two-wheeler market.

Preference to scooters Because of durability,low maintenance costs and versatility.

Motorcycles at that time Heavier, not as fuelefficient, and costlier than scooters.

Late 1990s Shift in consumer preferences.

Popularity of motorcycles soared and gearedscooters began to wane.


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Reasons for the shift:India undergoing a demographic shift; more

younger peopleGrowing economy; more disposable income

with middle classNew design and modern technology being

introduced in the motorcycles While Chetak remained unchangedEarly 2000s Hero Honda surpasses

Bajaj

Scooters were BAL's main products, andwhen market preferences shifted tomotorcycles, the company was facedwith declining sales and revenues.


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Decided to reorient business Launched newmotorcycle models.

It did not want to give up on scooters either. Itlaunched new scooter models and upgradedexisting ones.

However, with the introduction andsubsequent popularity of Honda Motorcycleand Scooter India (HMSI) scooters, especiallythe Activa, a gearless scooter, BAL lost itsdominance over the Indian scooter marketas well.


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SWOT Analysis

1. StrengthsStrong Brand nameGood financial resultsWell diversified groupIndian Group having Swadeshi advantageGood brand recall (Hamara Bajaj)

2. Weaknesses:Poor diversification within auto sectorLimited global presence


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3. Opportunities

Operating in one of the biggest auto market

More exports in globalised worldCould enter booming four wheeler segment

Have more investment abroad

4. Threats

Competing with the world leader in India

Dwindling numbers in lower CC models

Slow technology upgradationLack of a current slogan like "Desh Ki Dhadkan

of Hero Honda


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Challenges Ahead:

Will Bajaj be able to overtake Hero Honda inthe two-wheeler segment?

Will low-cost cars affect the market for two-wheelers?

Will the 2012 launch of the Ultra-Low Cost(ULC) car, in association with Renault-Nissan,be a successful one?


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Bibliography/Sources:

IUP Journal of Marketing Management Vol.X,No. 1, 2011

Businessworld Issue: 04 Dec, 2010

Bajaj Auto Ltds Annual Reports

Society of Indian Automobile ManufacturersData

Annual Reports of Hero Honda Motors Ltd

Discussion/Questions?

the bajaj story

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