ANALYSIS OF

Presented By:
Ashutosh Gautam
PGDM-IB
IB091104
Founder Jamnala Bajaj

Year Of Establishment 1926

Key People Rahul Bajaj(Chairman)

Madhur Bajaj (Vice-Chairman)
Rajiv Bajaj(Managing Director)
Industry Automobile-Two & three Wheelers

Business Group The Bajaj Group

Presence Distribution network covers 50 countries.

Dominant presence in Sri- Lanka, Columbia,
Guatemala, Peru ,Egypt, Iran and Indonesia

Joint Venture Kawasaki Heavy Industries of Japan, Nissan,

Renault

Rehistered & Head Office Akurdi

Pune-411035
india
Employees 13000

Net income ▲8,671.16cr(2008-09)

 HISTORY
• The company was the world's fourth largest manufacturer of
two-wheelers, behind Japan's Honda, Suzuki, and Kawasaki
• Bajaj Auto ltd is the flagship company of the Bajaj group.
• Founded in 1926 by Jamnalal Bajaj, founder of the group.
• The present Chairman of the group, Rahul Bajaj, took charge
of the business in 1965
• Bajaj entered into a strategic tie-up with Kawasaki in late
1990s to enhance its product line and knowledge up-
gradation
• By 1997, Bajaj faced tough competition in the domestic
market and its market share stood at 40.5%. Under the
leadership of Rahul Bajaj, the turnover of Bajaj Auto has
gone up from Rs.72 million to Rs.46.16 billion
 MISSION AND VISION STATEMENT
VISION
•To attain World Class Excellency by demonstrating Value added Products to customers

MISSION
•Focus on value based manufacturing
•Continual Improvement
•Total elimination of wastes
•Pollution free & safe environment

OBJECTIVE
•Bajaj Limited is to cater the market needs of transportation by providing 2 wheeler and 3 wheeler
vehicles.
•BAL has been producing the catalogue products to cater to the changing market requirements. Based
on the customer feedback, improvements are being made continuously in the existing products.
GOAL
•To catapult Bajaj Auto as the country‘s largest automobile company
 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 its history. Mr.Rajiv said
that it was a history he would like to forget. His
company has lived too long on nostalgia... holding on
to anything from the past is a sign of weakness
"Like Volkswagen Beetle, the product (Bajaj Chetak)
had lost its relevance."

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

important to be distinct.”

• This Lead to the strategy of…………

DISTINCTLY AHEAD
 DISTINCTLY
AHEAD
INSPIRING
CONFIDENCE

HAMARA
BAJAJ
 Internal Factors - Strengths & Weaknesses

Strengths:
• Highly experienced management.
• Product design and development capabilities.
• Extensive R & D focus.
• Widespread distribution network.
• High performance products across all categories.
• Great financial support network (For financing the
automobile)
• High economies of scale.
Weaknesses:
• Hasn't employed the excess cash for long.
• Still has no established brand to match Hero
Honda's Splendor in commuter segment.
• Not a global player in spite of huge volumes.
• Not a globally recognizable brand (unlike the
partner Kawasaki)
Opportunities
• The growing gearless trendy scooters and scooterette
market.
• Can use the existing R&D capabilities for new models.
• Can invest and grow the life style segments.
• Double-digit growth in two-wheeler market.
• Untapped market above 180 cc in motorcycles.
• More maturity and movement towards higher-end
motorcycles
Threats
• The competition catches- up any new
innovation in no time.
• Threat of cheap imported motorcycles from
China.
• Tough competition faced by foreign as well as
domestic players.
Two Wheeler Industry: An Overview
 Market Segmentation
• The high performance segment

• The 125 cc segment

• The 100 cc segment

 The Industry Analysis - Five Forces Analysis

Entry Barriers:
• Entry barriers are high.
• The market runs on high economies of scale .
• The need for technical expertise is high.
• Owning a strong distribution network is important and is very
costly.
Supplier Bargaining Power:
• Suppliers of auto components are fragmented and are
extremely critical for this industry since most of the
component work is outsourced. Proper supply chain
management is a costly yet critical need.
 
Buyer's Bargaining Power:
• Buyers in automobile market have more choice to
choose from and the increasing competition is driving
the bargaining power of customers uphill. With more
models to choose from in almost all categories, the
market forces have empowered the buyers to a large
extent. 
Industry Rivalry:
• The industry rivalry is extremely high with any product
being matched in a few months by competitor. This
instinct of the industry is primarily driven by the
technical capabilities acquired over years of gestation
under the technical collaboration with international
players.
• Substitutes:
There is no perfect substitute to this industry.
Also, if there is any substitute to a two-wheeler,
Bajaj has presence in it. Cars, which again are a
mode of transport, do never directly compete or
come in consideration while selecting a two-
wheeler, cycles do never even compete with the
low entry level moped for even this choice comes
at a comparatively higher economic potential.
 CORE COMPETENCIES
• Bajaj Auto is one of the oldest and the second largest two
wheeler manufacutrer in India.
• Mr Bajaj said that any company, which wants to survive,
must have quality and service orientation.
• With the introduction of DTS-i and DTS-Fi technology, Bajaj
Auto Limited has led the way in pioneering technology
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 users from 100, 115cc segment to 125cc
and higher
 150cc

Profit
Margin
e
lum
Vo

125cc
30%

100cc
40%
 SUPPLY CHAIN MANAGEMENT
Vendors
• Bajaj Auto has a consolidated base of 180 vendors supplying
components to all Bajaj Auto‘s plants.
• A large number of vendors are located either near Pune or
Aurangabad.
• Around 60% by value of Bajaj vehicle is outsourced. Virtually no
components are imported & 70% of Bajaj Auto‘s requirements
are sourced from within the state of Maharashtra
• Bajaj Auto has also begun actively assisting its suppliers in
finalizing joint ventures with counterparts in Japan, Italy,
Taiwan & Spain.
Key suppliers:
• Bajaj auto has approximately 198 suppliers for their raw materials.
Some of the key suppliers are:-
JBM -Frames
• MRF & Dunlop – tires
• Minda - Locks & ignition system
• Reinder – headlamps & lights
• Endurance – brakes, clutch & Cast wheel
• Varroc – Plastic parts & Digital Meter
• Max auto components – ignition system and switches
• Silco cable – wires and cables
• Makino industry – Brake shoes . Brake lining, clutch center
Dealers
•Bajaj Auto has a network of 422 dealers and over 1,300 authorized
service centers
•The company plans to increase the number of dealers to 500 by this
financial year
•During the financial year 2007-08, the company extended BASS (Bajaj
Auto Service Standard) to standardize the workshops of 250 dealers &
50 authorized service centers.
 Manufacturing locations
Akurdi, Pune
• This is one of the oldest plant of bajaj auto ltd with production capacity of 0.6
million vehicles/ year.
• The plant has been closed in order to equip for four wheeler production
Bajaj Nagar, Waluj Aurangabad
This is second plant with production capacity of 0.86 million/ year.
• Products manufactured here are Kristal, XCD and platina and commerial GC
series
Chakan Industrial Area, Chakan , Pune
• This is the biggest plant of bajaj auto Production Capacity of 1.2 million/ year .
• Product manufactured here are pulsar and avenger and commercial Ge series
Pantnagar , Uttarakhand
• The most advanced plant of bajaj auto .
• It has Capacity of 0.9 million vehicles per year , product manufactured here
are platina and XCD.
 GLOBAL BAJAJ
• Bajaj is present in over 50 countries all over the globe
• Dominant presence in Africa, Latin America and South
Asia with increasing market share every year
• 891,002 units exported in 2009-10, an increase of over
15 % over the previous year
• Total motorcycle exports of 726,115 in 2009-10, growth
of 15% over 2008-09
• Largest exporter of three wheeled commercial vehicles
in the world: 164,887 units exported in 2009-10, a rise
of 19% over 2008-09
 Recent News on Bajaj Auto
• Bajaj-Renault-Nissan to drive small car (ULC)
• Bajaj Auto Ltd has announced that the company
may launch a small car in the year 2012 in India.
• 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 the sporty slot, with
monthly sales of over 40,000 units.
 NKS
TH A