Various risks that Bajaj Auto is exposed to are: -

1. Risk: The company’s activities are expose it to credit risk, liquidity risk and market risk.
Mitigation Strategy: In order to minimise any adverse effects on the financial performance of
the Company, derivative financial instruments such as foreign exchange forward contracts
and foreign currency option contracts are entered to hedge certain foreign currency risk
exposures. Derivatives are used exclusively for hedging purposes and not as trading or
speculative instruments
2. Risk: It also faces risk from market fluctuations. As it operates in highly competitive and
dynamic market so economic downturns or changes in consumer preferences can lead to
reduced sales.
Mitigation Strategy: Bajaj Auto can mitigate the impact of market fluctuations by diversifying
its product portfolio. This can include expanding into new segments, such as electric vehicles,
and exploring international markets.
3. Risk: Disruptions in supply chain. These disruptions in the supply chain due to factors like
material shortages, supplier issues, or transportation problems can lead to production delays
and revenue loss.
Mitigation Strategy: Bajaj Auto can establish strong relationships with suppliers and
maintain alternative sources for critical components to minimize the impact of supply chain
disruptions.
4. Risk: There can be quality control issues. As any defects or quality control issues in vehicles
can lead to recalls, reputation damage, and financial losses due to warranty claims.
Mitigation Strategy: Implementing stringent quality control measures throughout the
manufacturing process can help detect and address defects before they reach the market.
5. Risk: There can be risk from labor strikes and unrest. Labor strikes, disputes, or employee
dissatisfaction can disrupt production schedules and impact the company's operations.
Mitigation Strategy: Fostering a positive work environment, addressing employee concerns,
and maintaining open communication can reduce the likelihood of labor unrest.