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EXECUTIVE SUMMARY

The combination of better comfort and much better fuel


efficiency should make a bike's package beguiling even for the
most hard-nosed scooter user.

What is better, adding a sweetener in the form of pricing


that is very close to the average scooter and we could be
talking about the preferred mode of public transport. Probably,
this must have made Bajaj, hitherto till the mid-90s known as a
scooter manufacturer re-orientate itself into one of the leading
bike manufacturers in the country. With this kind of a
promising prospect, it is a race to "stretch the litre" and offer
decently built entry-level bikes.

This report studies in detail about the entry level offerings


of Bajaj Auto. The scope of study here is limited to the buying
patterns of the Baja Boxer and its variants. The information for
this report is taken from various databases mentioned and the
Internet. The report also mentions about the evolution of the
motorbike market in India, Bajaj Auto as an organization and
the challenges it faces from competitors.

A market survey of the customers and dealers was done. The


survey was conducted through interviews and questionnaires.

The report neither draws any conclusions nor suggests any


recommendations. It is just a practical application of the
course of study.

1
ACKNOWLEDGEMENTS

The team would like to express its gratitude to some


individuals who were instrumental to the entire course of the
project as well as in making of the report.

First of all, we would like to thank our professor, Dr. Tapan K


Panda, for entrusting us with this project, which of course has
been a great learning experience. He has been the leading light
and his candid comments have helped us channelize the project
to its final form.

We would also like to express our gratefulness to Mr. G.


Krishnan, General Manager, KVR Motors, Calicut for his timely
cooperation and for providing us the dealer information.

Finally, we are thankful to our survey respondents who


spared their precious time to answer our questionnaire with
utmost interest and genuine participation.

The team has cited references, used data from the IIM and
the INDEST Consortia Resources and the Internet. We have
acknowledged this either at the place of reference itself or at
the end of the report.

COMPANY HISTORY

2
Bajaj Auto Finance Limited was incorporated on March
25, 1987 as Bajaj Auto Finance Private Limited got converted
into a public

The company is registered with the RBI as a Non Banking


Finance Company (NBFC) with effect from March 5, 1998.
As per the recent reclassification by RBI, the Company has
been reclassified as an Asset Finance Company

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 and steel, insurance, travel and
finance.

The group's flagship company, Bajaj Auto, is ranked as the


world's fourth largest two- and three- 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.

His son, Kamalnayan Bajaj, then 27, took over the reins 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.

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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 Rs.72
million to Rs.46.16 billion , its product portfolio has expanded
from one to and the brand has found a global market. He is one
of India's most distinguished business leaders and
internationally respected for his business acumen and
entrepreneurial spirit.

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Table of contents

1. Introduction………………………………………………6
1.1 Objective……………………………………………………………….7
1.2 Scope & limitation ………………………..…………………………..8
1.3 Methodology ………………………..…………...…………………….9
2. Industary analysis……………………...………………....10
2.1 Evaluation……………………………………………………………..11
2.2 Market share…………………………………………………………..12
3. Bajaj auto limited………….……………………..……….13
3.1 Introduction…………………………………………..………………..14
3.2 The leadership @ Bajaj .………………………………………………15
3.3 Motercycle segment- Market Position……………………..…………16
3.4 Opreation (R&D) ………………………………………………………17
4. List of Model………………………………………………19
4.1 New Models lunches (2007-09)……………………….……………….24
5. Key Policies…………………...………....………………..27
6. SWOT Analysis ……………………………..…………...29
7. Competitor Analysis …..……………..………………….30
7.1 Hero Honda Motor LTD……………………………………………...30
7.2 TVS Motor LTD………………………………………………………33
7.3 Kinetic………………………………………………………………….37
7.4 Yamaha Motor India (YMI)…………………………………………..41
8. Questionnaire……………………………..………………43
9. Chairman’s Latter ……………………………………….48
9. Reference…………………………...……………………..52

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1 INTRODUCTION

Bajaj Auto Ltd, a journey of an Indian company through times.


From “Hamara Bajaj” to “Inspiring Confidence”, Bajaj Auto Ltd has
moved leaps and bounds from being just an Indian scooter and
autorikshaw manufacturer to a Global two wheeler company, with new
age products, a company engineered by the latest technology and
R&D. A company that believes in true Indian ethos and values as the
advertisement suggests “buland Bharat ki buland tasveer”, it gave
India its first totally indigenized premium segment bike “Pulsar”. This
report looks into that bike level segment of Bajaj in which it is the
market leader, the entry level, low cost/no frill segment.

The entry level segment off late has been one of the fastest
growing segments in the Indian Motorcycle market. The main USP of
this category being “more mileage for low cost”, these bikes have
taken the market by storm. They have tickled the mind of the Indian
Consumer who has always known to be price conscious, but with a
penchant for quality. Bajaj, as a brand has strived for excellence and
basked in caring for customer care and safety. It is this lineament that
has struck a chord with the prospective buyer and has helped Bajaj
reap rich dividends.

The latest entrant into the family of entry level bikes, the Bajaj
CT100 has clocked sales of 64,498 in August’04 alone taking the total

6
sales to 1.86 lakh units since its launch taking Bajaj’s share in the
entry level segment to 52%. The entry level segment market is now a
big swim-off between two top performers in the Indian market, Bajaj
and Hero Honda. The reason why the fight for the footprint in the big
volume, low margin segment has turned so exciting is the price
aggression on both ends.

This project is about the models in the entry level segment


offered by Bajaj with a view in finding out the market for these bikes,
the competitors and customer perception.

0.1 Objective

The project has the following objectives:-

 Study of the Entry level segment models offered by Bajaj Auto


namely Bajaj Boxer with its variants Boxer AT and AR and the
new CT100.
 The composition of the Entry level segment in the Indian
Motorcycle Industry.
 The position of Bajaj Boxer vis-à-vis the Entry level bikes offered
by companies like Hero Honda, TVS, Yamaha and Kinetic Motors.
 Study of the Consumer buying patterns for these Entry level
bikes as a whole and for those offered by Bajaj Auto in
particular.
 Study of Intermediary processes like orders, spares and
services, sales promotions, supply chain and logistics.

7
 To learn the practical implications of the Marketing Management
course taught in class and to get a feeler of the real world of
Marketing.

1.2 Scope and Limitations

This study offers only a detailed study on the Bajaj Bike and its
variants .The report does an abbreviated study of the Indian
Motorcycle Market. Bajaj Auto as an organization, its market share and
performance is explained here only in terms of the Motorcycle market.
The scooter, autorikshaw, step-thrus and scooterette divisions of the
company are only cited and not explained in detail. The report also
does not explain the buying behaviour of any of the competitors of
Bajaj Auto in the entry level segment.

The project does not delve into the mechanical and technical
details of Bajaj bike .The project is defined in terms of only the
customer buying patterns of Baja bike, the ordering process and
supply chain logistics of the dealers.
The project is a short term project whose sole purpose is to
acquaint the team with the basic aspects of Marketing Research and
Customer Survey. A disclaimer is that this project is meant primarily
as a part of academia to learn direct practical applications of what the
curriculum teaches us. So by no means should this analysis be taken
at face value for real time situations. This is the biggest limitation
which is not to be attributed to the team, but something which is not
expected out of this project in and of itself.

8
1.3 Methodology

Methodology is all about how the team went about the project.
The motorbike industry in India of late has been very vibrant,
especially in the Entry level segment where selling by volumes is a key
differentiator. The project needed both qualitative and quantitative
analysis of data and information. I am made best use of the Internet
and the resources available at the IIM and INDEST Consortia. These
databases are our main source of graphs and illustrations. Also needed
was the information from first hand resources like intermediaries and
customers. I put forth all the psychographic, socio-economic and
consumer attribute based positioning questions in the survey and has
tried to get a pulse of the consumer perception and satisfaction level
of the Entry level bikes.

2 INDUSTRY ANALYSIS

During 1948 to 1991, the Indian automobile industry was


controlled by regulations on licensing, production, pricing and foreign
investments. The New Industrial Policy of 1991 changed all that; the
government abolished industrial licensing for all automobile sectors
and allowed foreign investments in the automobiles industry. This saw
the automobile industry grow at an astounding rate. Motorcycle sales
touched a high of 4.32 million from only around 500,000 in 1990-91.

The Indian automobile market accounts for 18 per cent of global


sales of two-wheelers and is second only to China which accounts for

9
nearly 43 per cent. Along with these two, the United States,
Indonesia, Thailand, Japan, Taiwan and Italy form the key two
wheeler markets in the world, accounting for almost 93 per cent
of the total demand in 2002-03.

The Indian automobile market is heavily dominated by two-


wheelers. Between 2002-03 and 2003-04, the industry's overall sales
of two-wheelers grew by 11.6 per cent, from 5.05 million to 5.64
million. The sale of motorcycles, which constitutes by far the most
dominant category in this segment, increased by 14.9 per cent from
3.76 million to around 4.32 million (In 2002-03, the motorcycle
industry grew by over 28 per cent.). Consequently, the share of
motorcycles to two-wheeler sales rose from 74.4 per cent in 2002-03
to 76.6 per cent in 2003-04.
The industry as a whole witnessed negative growth. From 8.47
million in 2006-07, overall two-wheelers sales fell by 4.8% to 8.07
million in 2007-08. the decline in motorcycle sales was sharper still: by
7.8%, from 7. million vehicles sold in 2006-07 to 6.54 million in 2007-
08. Your company has been affected by this downturn. Falling demand
coupled with sharply rising cost of critical raw material such as steel,
especially in the second half of 2007-08, has affected both sales and
profits. Given below are the key results:

• Despite an impressive growth in exports, Bajaj Auto’s motorcycle


sales by volume fell by10% over the previous year, to 2. 4 million
vehicles in 2007-08.three-wheeler sales, too, declined by 9.8%to
290,3 2 vehicles, notwithstanding strong exports. thus, the company’s
net sales fell by 6.8% to Rs.86.63 billion.

• operating eBItDA (earnings before interest, taxes, depreciation and


amortisation) fell by 9.6% to Rs. 2.94 billion in 2007-08. this
translated to an operating eBItDA margin of 4.3% of operating
income, compared to 5% in the previous year.

• operating profit before tax (PBt) fell by6.7% to Rs. 0. 2 billion in


2007-08.

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2.1 Evolution
The motorcycle market in India has evolved over the years from
the Royal Enfields of British parentage which were extremely popular
in the 1950s and 1960s to the current breed of highly specialized
Indian motorcycles.The evolution of the motorcycle market in India is
discussed in the following chart

11
2.2 MARKET SHARE

12
This surge in growth of the two-wheeler industry has primarily been
attributed to the poor public transport system in India. Another reason
that is being given is the targeting of most marketing and sales efforts
to the youth segment.The motorcycle,which earlier stood for a
secondary mode of transportation for a person who could not afford to
buy a car, is now being projected as a symbol of freedom, convenience
and excitement. In fact, most of the models being launched today
have been christened with names projecting the symbols. Hero Honda
“Joy”, Hero Honda “Ambition”, LML “Freedom”, TVS “Victor”, Yamaha
“Enticer”, Bajaj “Wind” are only some of the many models which have
been launched with an intent of projecting these symbols.

3 Bajaj Auto Ltd

13
3.1 Introduction
In the last five years, the theme of Bajaj has been the process of
“change” — of the ways in which Bajaj Auto has been transforming
itself to successfully meet the greater competitive challenges of the
future. It is evident and forced upon by this year's Management
Discussion and Analysis, which speaks of how the company has
leveraged a successful change-process to create products and a brand
that inspires confidence.

Like “change”, “inspiring confidence” has many elements and is a


continuous process. For Bajaj Auto, “inspiring confidence” means many
things: unveiling the new “flying B” Bajaj brand in January 2004 and
the way they now write BAJAJ - the new logo; reinforcing the
distinctiveness of the brand and what it stands for; using new
technologies and design to produce better vehicles that inspire
confidence in the hearts and minds of customers; creating excitement
in products, in engineering, in people and in customers; inspiring
through learning, innovation, perfection, speed and transparency.

Bajaj Auto started operations as an importing agent for Piaggio’s


Vespa scooters in 1948. Its tie-up with Piaggio ended in 1975 and the
brand name was changed from Vespa to Bajaj. In 1986, the company
entered into a technical collaboration with Kawasaki of Japan, and
started making Kawasaki 100 cc motorcycles. It has a marketing tie-
up for scooters with the Italian company Cagiva to market its products
overseas .

Shift towards motorcycles

14
Bajaj Auto is the second largest player in the domestic two-wheeler
industry. Its overall two wheeler market share in April-September
2003 fell marginally, due to its deteriorating share in the scooter
market.

In the 3.7 million motorcycle market, Bajaj Auto is a second to Hero


Honda, with a share of 24.7 per cent in 2002-03. Among the
motorcycle sub-segments, the company’s Boxer has been steadily
increasing its market leadership in the economy segment to Hero
Honda’s CD Dawn; also Bajaj continues to lead the premium
motorcycle segment. After the recent introduction of two new models
(Caliber 115 - variant and Wind 125 - new model) in 2003-04, the
company has managed to gain market share in the executive segment
as well, the key market where it has usually been a small player.

3.2 The Leadership@Bajaj

Board of Directors

 Rahul Bajaj (chairman)

 Madhur Bajaj (Vice chairman)

 Rajiv Bajaj (Managing Director)

 Sanjiv Bajaj (executive Director)

 D S Mehta

 Kantikumar R Podar

 Shekhar Bajaj

 D J Balaji Rao

 Ms Suman Kirloskar

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 Naresh Chandra

 Niraj Bajaj

2. Management

 Rahul Bajaj (chairman)

 Madhur Bajaj (Vice chairman)

 Rajiv Bajaj (Managing Director)

 Sanjiv Bajaj (executive Director)

 Pradeep Shrivastava (President of engineering)

 Rakesh Sharma(ceo of International Business)

 R C Maheshwari (ceo commercial Vehicles)

 S Sridhar (ceo of two Wheelers)

 Abraham Joseph (Vice President Of Research & Development)

 C P Tripathi (Vice President OF corporate)

 Kevin D’sa (Vice President OF Finance)

 K Srinivas (Vice President of Human Resources)

 N H Hingorani (Vice President of commercial)

 S Ravikumar(Vice President of Business Development)

3. company secretary

 J Sridhar

4. Auditors

 Dalal & Shah (chartered Accountants)

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5. cost Auditor

 A P Raman (cost Accountant)

6. Bankers

 Central Bank of India

 State Bank of India

 Standard Chartered Bank

 Bank of America

 ICICI Bank

 HDFC Bank

3.3 Motorcycle Segment – Market Position

Given that motorcycles clearly drive two-wheeler sales, it is necessary


to analyse sub-categories within this segment. But before doing so, it
is worthwhile to see how, over time, from being a predominant scooter
manufacturer; Bajaj Auto has become the second largest manufacturer

17
of motorcycles in India. The table below shows, how Bajaj Auto has
succeeded in this endeavour. Between 2003-04 and 2007-08 they
have increased their share in an explosively growing and highly
discerning market from under 23 per cent to over 32 per cent. From
being an insignificant player in the early 1990s, Bajaj Auto today is the
clear number two in motorcycles in India.

Year ended BAL’s


31 March Market BAL Market Share
2005 5,279,962 449,704 27.8%
2006 6,207,498 923,063 30.8%
2007 7,009,955 237,949 33.5%
2008 6,544,482 239,779 32.7%
As mentioned last year, the motorcycle market isbroadly
divided into three segments:

1. the high performance segment: this includes motorcycles in the


engine class of150 cc and above. Bajaj Auto is present here with the
Pulsar range ( 150 cc, 180 cc, 200 cc and the new 220 cc) and the
Avenger Dts-i.

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2. the 125 cc segment: Bajaj Auto is in this category with the up
graded Discover Dts-i 135 and, more significantly, the XcD 125 Dts-si,
which was launched in September 2007.

3. the 100 cc segment: Here, Bajaj Auto offers the Platina.

3.4 Operation (Research and Development)

During 2007-08, Bajaj Auto’s R&D was primarily involved with the
work on the next wave of products to be launched in 2008-09. two
important products which demonstrated the company’s technological
prowess were also launched during the year — the XcD 25 Dts-si and
thethree-wheeler Direct Injected auto rickshaw .XcD 25 Dts-si the XcD
25 Dts-si has been touched upon earlier. the platform is strategically
important, as it uses technological differentiation to increase the
penetration of Bajaj Auto’s motorcycles in the large 25 cc segment
.the XcD 25 Dts-si is the result of the cumulative experience of many
years of engine and vehicle development in Bajaj Auto.

Dts-i represents the latest advancements in modifying the company’s


patented Dts-i technology to further enhance the combustion by
incorporating a swirl motion in the combustion chamber. The
combustion is controlled by using an advanced microcontroller-based
ecU, which gives both ignition and fuel controls based on inputs of
load, revolutions per minute and temperature. The engine cuts down
weight and friction to match numbers of a typical 00cc engine. the XcD
25 Dts-si has been engineered to cut down weight, while having on
board advanced features like LcD speedometer, LeD tail lamps and
tank spoilers.

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4. List of models
Bajaj Bikes and Scooters (Pulsar, Discover ...)

Bajaj bikes cover the market with Bajaj Motor Cycles, and Bajaj
Scooters. Around nine Bajaj bikes address the market across these
two categories motorbikes, and scooters. All Bajaj two wheelers run on
petrol and have a decent mileage. Bajaj bikes include

Bikes from Bajaj :

• Bajaj Platina
• Bajaj XCD
• Bajaj Discover
• Bajaj Pulsar
• Bajaj Avenger
• Bajaj Kristal

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Bajaj Motor Bikes

Bajaj motor cycles,or motorbikes,as such two wheelers are popularly


called,give great mileage,and are fancied by the young and speedy.
Bajaj bikes include popular models like the Bajaj Pulsar and the Bajaj
Avenger. Bajaj Motor cycles include

BajajPlatina

Platina(99.27cc)

Bajaj Platina is a leader in mileage & looks in the 100 cc class. The
Bajaj Platina is resplendent in Platinum silver colour and shiny chrome
graphics enhanced by a contrasting matt black silencer and graphite-
tinted engine. At the showroom, this bike costs around Rs. 30,000 with
an on-road price of around Rs. 35,500 at Ahmedabad. This includes
standard ancillary charges also. Currently, Delhi has the lowest, and
Mumbai the highest on-road prices for Bajaj Platina. Bajaj Platina bike
prices vary upon the two-wheeler dealer's location.

BajajXCD

XCD(125cc)

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The Bajaj XCD DTS-Si 125 cc is easy to control, easy on the pocket,
and a good choice for a 125 cc motorbike. The alloy wheel rims add
flamboyance to the strong diamond frame body. The folding number
plate is a cool idea and the electric start without a kick works like a
charm. At the showroom, this bike costs around Rs. 41,000 with an
on-road price of around Rs. 46,000 at Ahmedabad. This includes
standard ancillary charges also. Currently, Delhi has the lowest, and
Mumbai the highest on-road prices for Bajaj XCD. Bajaj XCD bike
prices vary upon the two-wheeler dealer's location.

BajajDiscover

Discover DTS-I 135 cc

The Bajaj Discover has two vari ants with 110 cc and 135cc engine.
Bajaj Discover targets the middle class two wheeler consumers with
Bajaj bike prices ranging from Rs. 46,000 to Rs. 55,000. Bajaj
Discover variants include Bajaj Discover 135 cc lies in between the 125
cc and 150 cc segments with an engine displacement of 134.21 cc.
The Bajaj Discover 135 cc is easy to control, easy on the pocket, and a
good choice between a 125 cc and 150 cc motorbike. At the
showroom, this motorbike costs around Rs. 49,000 and an on-road
price of around Rs. 56,000 at Ahmedabad. This includes standard
ancillary charges also. Currently, Delhi has the lowest, and Mumbai the
highest on-road prices for Bajaj Discover DTS-I 135 cc. Bajaj Discover
DTS-I 135 cc bike prices vary upon the two-wheeler dealer's location.

Bajaj Pulsar

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Pulsar 150 cc DTS-i

Bajaj Motor Bikes An extremely popular bike on the Indian roads,the Bajaj
Pulsar currently offers four varieties the Bajaj Pulsar 150 cc,the Bajaj Pulsar
180 cc,the Bajaj Pulsar 200 cc,and the Bajaj Pulsar 220cc. Bajaj Pulsar bikes
range in on road prices from around Rs. 62,500 to Rs. 90,500.

A combination of technology and engineering, Bajaj Pulsar 150 cc offers


enhanced features like Digital Twin Ignition Technology (DTS-i) based
engine, digital console, ride feel and chassis. New motorbikes in this series
have a showroom price ranging from around Rs. 55,000 to Rs. 63,000 at
Ahmedabad, which inclusive of all charges like insurance, octroi, RTO, etc.
Currently, Delhi has the lowest, and Mumbai the highest on-road prices for
Bajaj Pulsar 150 cc DTS-i cc. Bajaj Pulsar 150 cc DTS-i cc bike prices vary
upon the two-wheeler dealer's location.

Pulsar180ccDTS-i

Pulsar180ccDTS-i

Bajaj Pulsar 180 cc DTS-I is a cool, mean machine using Digital Twin
Technology Ignition (DTSI-i), Twin Spark Plugs, Ignition with Digital
CDI and a third generation Throttle Responsive Ignition Control
System. This bike is now available at a showroom price of around Rs.
59,300 with an on road price of around Rs. 67,000 at Ahmedabad
including supplementary statutory charges. Currently, Delhi has the
lowest, and Bangalore the highest on-road prices for Bajaj Pulsar 150
cc. Bajaj Pulsar 180 cc bike prices vary upon the two-
wheelerdealer'slocation.

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Pulsar200ccDTS-i

Pulsar200ccDTS-i

Bajaj Pulsar 200cc DTS-i has a dash of style, speed and technology.
Having an international sports bike look, Bajaj Pulsar DTS-I has a split
seat and several parameter indicators (oil/fuel/temperature etc), Nitro
shockers, a third generation Throttle Responsive Ignition Control
System and chiseled rear looks. The Pulsar 200cc DTS-i is mean
machine to ideally take on a long winding road. New bikes in this
series have a showroom price ranging from around Rs. 68,000 to Rs.
74,500, which inclusive of all charges like insurance, octroi, RTO, etc.
Currently, Delhi has the lowest, and Bangalore the highest on-road
prices for Bajaj Pulsar 150 cc. Bajaj Pulsar 180 cc bike prices vary
upon the two-wheeler dealer's location.

Pulsar 220ccDTS-Fi

Pulsar220ccDTS-Fi

Bajaj Pulsar 220cc DTS-Fi offers riding comforts and power that with
elegant styling, design and technology. Bajaj Pulsar 220cc DTS-Fi has

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front/back disk brakes, tubeless tyres, fuel injection/oil cooled engine,
NitroX shockers and other unique features that qualify the bike as
smart & macho. At the showroom, this bike costs around Rs. 83,500
and an on-road price of around Rs. 90,500 at Ahmedabad. This
includes standard ancillary charges also. Currently, Delhi has the
lowest, and Mumbai the highest on-road prices for Bajaj Pulsar 220cc.
Bajaj Pulsar 220cc bike prices vary upon the two-wheeler dealer's
location.

Pulsar300ccDTS-i

Pulsar350ccDTS-i

BajajAvenger

Avenger(DTSi)
Bajaj Avenger (DTSi) offers the ultimate cruiser experience. Offering
high stability and long cruising delights, Bajaj Avenger (DTSi)
possesses wider saddle seat, special backrest besides 180cc powerful

25
engine. It is targeted at the upper middle-class bike lovers. The
Avenger now has a single variant, the Bajaj Avenger priced at around
Rs. 70,000. This bike has a showroom price of around Rs. 64,900 and
on-road price of around Rs. 71,500, at Ahmedabad, which is inclusive
of all charges such as insurance, octroi, RTO, etc. Currently, Delhi has
the lowest, and Mumbai the highest on-road prices for Bajaj Avenger.
Bajaj Avenger bike prices vary upon the two-wheeler dealer's location.

Bajaj Scooter

In order to cover other segments than motorcycles in the two-wheeler


market, Bajaj has launched the Bajaj Kristal DTSi, an extremely fuel-
economic scooter priced at around Rs. 40,000.

BajajKristal

KristalDTSi(95cc)

The Bajaj Scooterette model Bajaj Kristal DTSi comes with Digital Twin
Spark Ignition (DTS-i) technology and ExhausTEC technology. Bajaj
Kristal DTS-i is targeted at college going girls who want good speed,
comfort and fuel economy, helping them save their pocket money. At
the showroom, this bike costs around Rs. 35,200 with an on-road price
of around Rs. 40,000 at Ahmedabad. This includes standard ancillary
charges also. Currently, Delhi has the lowest, and Bangalore the
highest on-road prices for Bajaj Kristal DTSi. Bajaj Kristal DTSi scooter
prices vary upon the two-wheeler dealer's location.

Bajaj Auto is one of the largest manufacturers and exporters of two


wheelers and three wheelers in India. Bajaj is a very old Indian
company and enjoys a traditional goodwill in the market. Bajaj bikes
and scooters have their own fan following.

26
 New lunches (2007-09)

• Avenger
• Boxer
• CT 100
• Discover
• Eliminator
• Legend
• Pulsar
• Pulsar 220-Fi
• Pulsar 220-i
• Pulser 300DTS-i
• Pulsar 350DTS-i
• Platina
• Wind
• XCD
• Kristal
• Chetak
• Saffire
• Sunny
• Wave

27
5. Key policies

28
6. SWOT ANALYSIS OF BAJAJ

29
Strengths

 A well-established Brand
 Known to be a cost-effective producer.
 Has a wide distribution network
 Market leader in most segments it has entered like three-
wheelers, step-throughs, scooters, entry-level and performance
bikes.
Weaknesses

 Still perceived as a scooter manufacturer.


 Late entrant into the motorcycle segment.
 Weak presence in the executive segment.

Opportunities

 Demand for motorcycles is growing. With the rising middle class


income there is a huge market especially for the executive
segment.
 Expanding into Asia-Pacific. First overseas plant in Indonesia.
 Growth rate for three-wheeler goods carrier segment is high.

Threats

 Scooterettes are fast replacing scooters in the urban market.


 Yamaha and Honda entering the scooter market.
 TVS entering into the three-wheeler market

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7. COMPETITOR ANALYSIS

7.1 Hero Honda Motors Limited

Hero Honda Motors Limited started as a joint venture between the


Hero group and Honda motor company of Japan on January
19,1984. It revolutionized the two-wheeler segment with the fill-it-
shut it-forget-it campaign. It’s the dynamism of the Hero motor
group that has kept the company growing. Today Hero Honda has
around 5 million customers with close to 50% market share,
making it the biggest company in the two- wheelers segment. In
addition to having remarkable technological excellence, expansive
dealer network and reliable after-sales services, Hero Honda Motors
Limited is also one of most customer friendly companies.

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SALES PERFORMANCE
HERO HONDA REPORTS LEADERSHIP PERFORMANCE
WITH 50 % NET PROFIT IN Q2, '08-09
DEFIES INDUSTRY TREND WITH TURNOVER (NET SALES
& OTHER OPERATING INCOME), AT RS. 3202 CRORE;
EBIDTA AT 13.58 PER CENT
Aug'06 Aug'07 FY 06-07 FY 07-08
Total
2,15,076 2,40,875 12,82,860 12,63,254
Sales

Market position

In executive segments Hero Honda is the largest two-wheeler


maker in India, with 44.2 per cent in the motorcycle market in
April-September 2003. While Hero Honda has a strong presence in
the executive segment with its Splendor and Passion, its market
share is comparatively smaller in the premium segment, where
Bajaj Auto rules the roost. In 2003-04, Hero Honda faced
intensified competition from Bajaj Auto and TVS in the premium
and executive segments, which pulled down its market share.
However, Hero Honda has successfully challenged the leader in the
economy segment, Bajaj Auto, with its new model CD Dawn.

Hero Honda’s market position could fall unless the decline in the
high volume executive segment is arrested with new product
launches. The company has already launched a variant of its
Passion and Splendor (Passion plus and Splendor plus in September
and October 2003) in this segment and they are doing considerably
well. Riding on the success of these models Hero Honda has
registered a 35 per cent growth in sales in comparison to the year
2003.

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4P Analysis of Hero Honda CD Dawn

Product

Hero Honda CD Dawn has been developed to give the customer


outstanding value for money. It has been rated as best in total
customer satisfaction in its segment in a nationwide survey
conducted by TNS automotive. It is a 4 stroke 100cc motorcycle
with good fuel efficiency and rock solid dependability. It has unique
suspensions that ensure riding comfort even on uneven roads. A
double cradle frame imparts extra stability to the bike

Price

Hero Honda CD Dawn with a price tag of 32,412 is targeted at entry


level segment. By offering the style associated with Hero Honda
bikes at the price of Bajaj Boxer, CD Dawn has managed to capture
the attention of the buyer who is looking for a stylish low-cost, low-
maintenance bike.

Place

Hero Honda has a strong dealer network in all states in India. A


strong distribution network of 500 dealers makes the presence of
Hero Honda felt across all cities. For instance, in Calicut itself there
are 3 dealers of Hero Honda compared to 2 of Bajaj Auto.

Promotion

The CD Dawn is targeted at the lower income segment of the


market. By running campaigns stressing on the value associated
with the bike, Hero Honda has ensured that the “value” bike has
sold more than 2 lakh units within one year of launching.

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7.2 TVS MOTOR COMPANY

TVS Motor Company Limited, part of the TVS Group, is one of


India’s leading two-wheeler manufacturers. With a turnover of over
Rs.2700 crores, the Company manufactures a wide range of
motorcycles, scooters, mopeds and scooterettes. Little wonder, it
boasts of more than 7 million happy customers. In 1980 it launched
India’s first two-seater moped, TVS 50.
With the joint venture with Suzuki Motor Corporation in 1983, TVS-
Suzuki became the first Indian company to introduce 100 cc Indo-
Japanese motorcycles in September 1984. Through an amicable
agreement the two companies parted ways in September 2001. TVS
holds around 18% market share in motorcycles. The company
manufactures its motorcycles, scooterettes and mopeds at its state-
of-the-art factories in Mysore and Hosur. TVS offers a wide range of
two-wheelers
 Motorcycles – TVS Centra / TVS Victor / TVS Fiero F2/ TVS
Max 100/ TVS Max 100 R
 Scooterettes – TVS Scooty Pep/ TVS Scooty 2S
 Mopeds – TVS XL Super/ TVS XL Super HD

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Market position

TVS is the third largest player in the motorcycle market. In 2003-


04, the company improved its market position in the executive
segment, riding on the back of Victor, its first indigenous four-
stroke motorcycle. But in the economy segment, the company lost
second place, with the steep fall in sales of its Max 100, bringing
down its share of the overall motorcycle market during April-
September 2003. In the premium segment, TVS’ market share rose
marginally during April-September 2003, owing to the improved
sales of its 150 cc Fiero.

35
4P Analysis of TVS Max 100

Product

The Max 100 was engineered for those who demanded strength and
ruggedness. It was built to perform to its maximum limits, built to
last for generations, built to be an inseparable family member and
built to stop anything unnecessary flowing out of the hole in your
pocket. The 98.2 cc two stroke engine delivers 7.8 bhp of power
(more than sufficient for the city). It is not really designed for top
speeds but can hammer out a good 80 -95 km per hour.(60 in city
conditions). It is almost maintenance free. Spare parts are very
cheap and easily available. It is not the best when it comes to style
and comfort but an excellent bike without a doubt designed to keep
it simple and good. It has proven itself well over a decade. However
keeping with the changing TVS Motor Company has plans to replace
two-stroke motorcycle Max with a four-stroke entry-level
motorcycle within six months to arrest the erosion in sales.

Price

The ‘TVS Max 100’ is priced at Rs 25,560 (ex-showroom) as a direct


competition to Bajaj Boxer. Unlike ‘TVS Max 100R’ series, the Max
100 is a stripped down version without the battery and comes with
“smaller tyres than that offered with Max 100R”.
The company’s other two-stroke model, TVS Max 100R, comes with
the battery and bigger tyres and is priced around Rs 31,000.

Place

36
With a strong sales and service network of 500 Authorized
Dealerships, 1018 Authorized Service Centers and over 864
Certified Service Points, TVS is growing from strength to strength.
The low cost of spares and servicing is an added advantage
especially in South India.

Promotions

The bike has always been positioned as value for money


offering. Being it a two stroke it has very low maintenance. Some of
the campaigns projected it as a ‘Zero Maintenance Bike’, ‘Bike built
to last’. It was promoted as the ultimate middle class bike, the best
in its class. The company has a 12-13% share of the segment
through its three variants Max 100, Max 100 R and Max Dlx. With
drop in sales, the company plans to change the product offering by
introducing a new 4 stroke bike while retaining the same brand
(MAX 100).

37
7.3 Kinetic

Kinetic incorporated in 1970 in India in collaboration with Hyosung


Motors of Korea are well known for pioneering activities in the
Indian automobile industry. Kinetic's guiding philosophy of "A
Kinetic for Everyone". They introduced the concept of ‘personalized
transportation’ in India, with the launch of Kinetic Luna, in 1972.
Since then, the brand Kinetic Luna has become generic with
mopeds. Then in the scooter industry in India, it was the first to
introduce a gearless scooter with advanced features like TLAD
suspension, auto choke, auto fuel cork, etc thus offering
convenience and comfort to the earlier hassled scooter customer.
With the launch of bikes, Kinetic now has the distinction of being
India's only two-wheeler company to offer a full range of vehicles
which range right from mopeds, step-thrus, scooterettes, scooters
to motorcycles. The manufacturing facilities are located at
 Koregaon Bhima (for motorcycles and step-thrus)
 Ahmednagar (for scooterettes and mopeds)
 Pithampur (for scooters)

Other Salient Features


 It has a strong customer base of over 50 lakh on road users.
 It is ISO 9001 certified from DNV for all models and activities.
 It has a strong dealership network of over 400 dealers and
authorized service centers across the country.
 It is a leading exporter of vehicles across the globe with
thousands of vehicles exported to countries like USA, Canada,
Latin America, Europe, Africa, Middle East and South Asia. It

38
enjoys "Export House" status and has won the Exports
Excellence award seven consecutive years.

Market position

Moped and motorcycle market share

Kinetic Engineering is a minor player in the domestic two-wheeler


industry, with just two per cent share in 2003-04. It has also been
unable to cope with the growing competition in the motorcycle
segment, resulting in an overall drop in sales. The company
ventured into the motorcycle segment in 2001, launching the four-
stroke Challenger.

After Challenger, Kinetic Engineering introduced the GF 125 series


of four-stroke motorcycles, developed in technical collaboration with
Hyosung Motors of Korea. This model wasn’t a big success. Apart
from facing competition from Hero Honda, TVS and Bajaj, the
product was positioned in the premium segment, which is a smaller
market. About 62 per cent of Kinetic Engineering’s sales came from
motorcycles in April-September 2003.

39
4P Analysis of Kinetic Boss

Product

The Kinetic Boss has been specifically designed to give the


customer outstanding value for money. The bike is strong and
rugged, powerful and has an excellent fuel economy of 80 KMPL on
the road. Kinetic Boss has distinguished styling (that set it apart
from other bikes in the category) and a host of features such as a
double cradle chassis, hyper suspension shock absorbers, engine
guard, full steel front and rear mudguards, a large wheelbase for
good road hold, wider seats for added comfort, a unique footboard
for the pillion rider and multi-focal reflector headlamp, tail lamp and
side indicators for better illumination.

Price

The Kinetic Boss with a price tag of around 31,000 is designed as a


‘value for money’, no frills bike. Boss accounts for over two-thirds
of overall Kinetic bike sales.

Place

Kinetic has adopted a Direct Sales Model with about 500 Sales
officers, 60 supervisors in 14 important states. These officers
directly approach customer at home or office. Apart from this they
have strong dealer networks in all states in India (about 400
dealers) and authorized service centers. In Kerela they have
dealers in 14 cities/towns. In Calicut there are 2 dealers.
The company currently exports Kinetic Boss to Sri Lanka. The
company has also received orders for Boss from other countries in

40
South Asia and Latin America, and will begin dispatches in the next
few weeks. The company targets over 5000 units of Boss for
exports in the first year itself.

Promotion

The bike is promoted as "best value for money" motorcycle. It has


been judged as the “Mileage Champion” of India, beating all other
two wheelers on mileage. Kapil Dev was chosen as the brand
ambassador for kinetic especially to promote Kinetic Boss.
Kinetic group Chairperson, Mr. Arun Firodia, said the bike, with a
price tag of just over Rs. 31,000 would be the volume driver for the
group which has aspirations of being a major player in the
motorcycle market. The company launched a Rs. 15-crore
advertising campaign with the brand ambassador Kapil Dev.

The Blue bug - blue is the colour of the Indian cricket team - seems
to have bitten the Pune-based Kinetic Engineering Ltd too: the
company launched a limited (5000), blue-coloured, Kapil Dev-
signed edition of its volume-driver brand Boss. The company plans
to promote its entire portfolio of motorcycles under the sub-brand
’Kinetic Biking’. It also plans to sell accessories such as branded
helmets, and undertake various CRM initiatives under the sub-
brand.

41
7.4 Yamaha Motor India (YMI) Ltd.

Yamaha Motor India (YMI) Ltd. is the fully-owned subsidiary of


Yamaha Motor Co of Japan. In 1985, Yamaha Motor Company,
Japan, became one of the first global two-wheeler makers to set up
base in India. In 1996, it formed a 50:50 joint venture with the
Escorts Group and it was known as Yamaha Motor Escorts Ltd. But
the parent company purchased Escorts Ltd's remaining 26 per cent
holding in their motorcycle joint venture Yamaha Motor Escorts Ltd
in June 2001. It was after that renamed as Yamaha Motor India
Ltd. It is today the fourth-biggest motorcycle maker in the country.

42
MARKET POSITION

The company is present in the all the motorcycle segments. Its


presence in the economy segment, however, is marginal. The fall in
premium segment share has pulled down motorcycle market share
of Yamaha India with a 6.5 per cent market share during April-
September 2003. Sales of the company had dipped 23 per cent at
2.5 lakh units in 2003. In the first six months this year, the
company sold 1.2 lakh units, including 10,000 in exports. The fall in
sales of Enticer in the cruiser segment, Yamaha 135 in the premium
segment and YBX in the executive segment led to a decline in its
market share from 7.9 per cent in 2002-03. It improved its position
in the executive segment after the positive consumer response to
Libero.

43
8. Questionnaire

Indian Institute of Management, Kozhikode


Kunnamangalam, Calicut - 673571

Dear Respondent,
This survey will help us understand consumer behaviour for motorcycles. Please
note that there is no right or wrong answers to this questionnaire. It will only take 10
minutes of your time.

1) Which brand comes to the mind when you think of motorcycles?

-----------------------------------------

2) Have you heard of low cost/ no frill bikes?


YES NO

3) If the answer to Question2 is YES, which brands do you think are on offer in the
entry-level segment?

A) -------------------------------------------------

B) -------------------------------------------------

C) -------------------------------------------------

4) Which brand of motorcycle do you own currently?

-------------------------------------------------

5) Which are the sources of information that made you opt for this bike?
Please rate the importance on the given scale.

TV Advertisements Newspaper Ads Magazines

Friends and Relatives Bike dealers suggestions

6) What is the primary purpose behind buying this bike? (Please select only one
option)

Travelling to Work Daily personal use Social Status Leisure

7) How many kilometers do you travel on your bike in a day?

44
< 10 kms 10 – 20 kms 20 – 30 kms > 30 kms

8) What do your friends think about your current bike?

--------------------------------------------------------------------------------------------------
-

--------------------------------------------------------------------------------------------------
-

9) Are you satisfied with your current bike? Rate the satisfaction on a scale of 5.

1 2 3 4 5
Least Very
Satisfied Satisfied

10) Given a chance to change the bike, which one would you opt for?

----------------------------------------------------

11) If you want to change your bike, how long do you take to do so?

Within 3 Months 4-6 Months

6 Months – 1 Year > 1 year

12) What are the attributes that made you opt for this bike?

1 2 3 4 5
Least Very
Important Important

Attribute Importance
Cost
Mileage
Style
Comfort
Power
Maintenance
Service
Brand Image
Offers
Finance Availability
Cost of Spares

45
13) Age Group

18 – 25 years 26 – 35 Years Over 35 years

14) Occupation ------------------------------------------------

15) Marital Status

SINGLE MARRIED

16) Annual Income

< 1 Lakh 1 – 2 Lakh Over 2 Lakhs

Please circle the appropriate choice


17) I like a lot of variety in my life.

1 2 3 4 5
Strongly Strongly
Disagree Agree

18) I follow the latest trends and fashions.

1 2 3 4 5
Strongly Strongly
Disagree Agree

19) I like a lot of excitement in my life.

1 2 3 4 5
Strongly Strongly
Disagree Agree

20) I must admit that my interests are somewhat narrow and limited.

1 2 3 4 5
Strongly Strongly
Disagree Agree

21) I like my life to be pretty much the same from week to week.

1 2 3 4 5
Strongly Strongly

46
Disagree Agree

22) I am usually loyal towards a particular brand.

1 2 3 4 5
Strongly Strongly
Disagree Agree

23) I buy a product more for a necessity than for social status.

1 2 3 4 5
Strongly Strongly
Disagree Agree

24) I am ready to pay a premium for a branded product.

1 2 3 4 5
Strongly Strongly
Disagree Agree

25) I try to devote most of my free time to my family.

1 2 3 4 5
Strongly Strongly
Disagree Agree

26) If in situation where giving a bribe is necessary, I wouldn’t hesitate to do so.

1 2 3 4 5
Strongly Strongly
Disagree Agree

27) Please rate the following brands on the given attributes using the scale below

1 2 3 4 5
Very Bad Very Good

Attributes Bajaj Hero TVS Max Kinetic Yamaha


Boxer/ Honda CD 100 Boss Crux
CT100 Dawn
Cost
Mileage
Style
Comfort
Power

47
Maintenance
Service
Brand
Name/Image
Offers
Finance
Availability
Cost of
Spares
Dealer
location

48
9.Chairman’s Letter

49
Three years later, the management team and I feel vindicated.
Your company has resolutely engaged in a process of fundamental
change. This has involved changes in the organisational structure; in
products and models; in the approach to markets and consumer
preferences; in R&D, engineering, product design and speed to
market; in rationalising of costs; and in a complete overhaul of the
way in which we do business.

This change process is now epitomised by Bajaj Auto's new corporate


identity which was unveiled at the Auto Expo in Delhi in January 2004.
To my mind, this new identity symbolises the changing time a new and
rejuvenated Bajaj Auto that is closely in touch with its customers; that
believes in speed and innovation; that wants to create excitement
through its products; that focuses on transparency. I like this process
very much, and have endorsed it to the hilt. After all I was given
charge of your company when I was 30. Therefore, I see every reason
why younger people should take over the mantle.

That doesn't mean that your Chairman is ready to take vanavas. Far
from it, I will continue to be involved in wider strategic issues and be a
sounding board for ideas. However, the day-to-day working and the
quarter-on-quarter planning of Bajaj Auto will be left to younger heads
and hands.

2008-09 has been a good year, : Bajaj Auto Ltd, India’s second-
biggest motorcycle maker, said on Monday it would a launch new
model a month from January for six months to revive sales that fell
37% in November.

50
High interest rates and sluggish consumer spending have dented
demand for automobiles in India, including for motorcycles and
scooters that Bajaj Auto produces and analysts said the costs of new
launches could squeeze the company’s profit margins.
To beat the slowdown, group firm Bajaj Auto Finance Ltd is offering a
retail finance scheme to buy Bajaj’s vehicles at an interest rate of just
under 8%, Bajaj Auto Ltd said in a statement.
This is expected “to revive sales in the short term,” it said.
Bajaj said motorcycle and scooter sales dropped 37% in November to
132,421 units from a year earlier. All vehicles, including three-wheeled
motorised rickshaws that rose 13%, were down 32% at 159,747 units.
The dwindling sales are expected to continue in December as dealers
also cut back purchases to avoid piling up inventories, the company
said.
Bajaj said it would launch a new motorcycle every month from January
to attract buyers.
“Spending on new products will put pressure on margins,” said
Prayesh Jain, research analyst with India Infoline.
The products would do well only if they were different from its existing
motorcycles and targeted at a new category, he added.
Bajaj’s motorcycles, with engine capacities of more than 125cc, cater
largely to the urban segment that has been severely hit by the credit
crunch and rise in interest rates, he said.
“We are not bullish on the company,” he said.
The country’s top motorbike maker, Hero Honda Motors Ltd, posted a
0.5% rise in November sales, while third-largest TVS Motor Co’s sales
fell 12.7%.
Shares in Bajaj Auto, with a market value of $951.7 million, closed
down 4.3% at Rs306.95. The stock has shed 49% since its re-listing in

51
May this year, compared with the main BSE index that has lost 47% in
the same period.
But the future looks even better. I expect the company to overcome
challenges and achieve still better performance across all product
categories. The new corporate identity promises to inspire confidence.
We at Bajaj Auto must leverage this confidence by delivering superior
performance year on year, without fail.

Thank you for your support and faith in Bajaj Auto.

Rahul Bajaj
Chairman and Managing Director

52
10. REFERENCES

1. Automotive Components Manufacturers Association (ACMA)


http://www.indianauto.com/

2. Agency Faqs!
http://www.agencyfaqs.com

3. Society of Indian Automobile Manufacturers (SIAM)


http://siamindia.com/

4. The Hindu Business Line


http://www.thehindubusinessline.com

5. Use of the following databases:

 CRIS INFAC
 SIAM
 PROWESS

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