Bajaj Exports

Riverview: Highlights
Riverview a newly commissioned, 199 apartment retirement community for a capacity of 356 persons (singles and couples), sponsored by the Montvale Corporation, a non-profit, religious body supervising such CCRCs throughout USA. Riverview construction stared in 1990; first residents entered in July92 and first fiscal year completed in Sept.03. Facilities included a 70-bed health centre, coffee shops, a dining room each for residents and health centre, a hall for socio-cultural events seating 200, a library, a gift shop, a salon, an exercise room and a indoor swimming pool set in 40 acres. In April94, occupancy reached 99% with a waiting list for several hundred people till 2004. Each had made a refundable deposit of $1100 ($100 deductible).

About Company
Bajaj was established in 1945 Incorporated as a trading company 1948 - 1959 Imported scooters & three wheelers from Italy Production License 1959 Technical collaboration with Piaggio of Italy in 1960 1971- collaboration expired

Passenger Carrier

Bajaj Export- Presence

Bangladesh USA Iran

Mexico
Colombia Peru

Egypt
Sri Lanka Singapore

Thailand Philippines

New Zealand

Presence
Distribution network covers 50 countries Dominant presence in Sri Lanka, Mexico, Bangladesh, Columbia, Peru, Egypt, Iran and Indonesia. Largest exporter in three-wheelers 26% growth in total exports over 2003-04 43% growth in total exports over 2004-05

Services- Business Partners

Training in sales,services & spare part management based on bajaj distribution system Active support for setting up manufacturing facilities overseas including transfer of technical know how

Assistance in setting up an assembly plant for assembly of vehicles from CKD kits

Strategies For Export Markets

CBU Completely Built Unit import duty < India CKD Completed Knocked Down import duty > India SKD Semi Knocked Down

Export Pricing
Mfg. cost (say for 1 Bike) = Rs. 24000 Margin (10%) = Rs. 2400 Load transportation to port (JNPT) = Rs. 200 Clearing & forwarding = Rs. 100 FOB price = Rs. 26700 Incentives (DEPB) (10%) = Rs. 2427 After deducting incentive = Rs.24273 FOB Price ( in $) (Say 1$=Rs.45) = $ 539.4 Ocean Fright ($700 / 70 = $10) = $ 10 C&F Price = $ 549.4 CIF Price (Insurance 0.3 % =1.62) =$ 551.02 (This is Price of 1 Bike from Pune to colombo)

Strategies For Export Markets

Packaging
Pricing Transportation

August-2005 Volumes
MOTORCYCLES August 2005 149,416 164,020 22,782 186,802 23,752 August 2004 106,745 119,896 19848 139,743 13,575 Change % 40 37 15 34 75

TOTAL 2 WHEELERS 3 WHEELERS TOTAL 2 & 3 WHEELERS Exports out of the above

July-2005 Volumes
July 2005 MOTORCYCLES 115,216 126,821 22,585 149,406 14,698 July 2004 103,260 120,092 21,651 141,743 15,279 Change % 11.5 5.6 4.3 5.4 -3.8

TOTAL 2 WHEELERS 3 WHEELERS TOTAL 2 & 3 WHEELERS Exports out of the above

June-2005 Volumes
June 2005 MOTORCYCLES 130,710 141,316 19,966 161,282 15,946 June 2004 97,591 112,643 21,748 134,391 16,379 Change % 33.9 25.5 -8.2 20 -2.6

TOTAL 2 WHEELERS 3 WHEELERS TOTAL 2 & 3 WHEELERS Exports out of the above

April-2005 Volumes
April2005 MOTORCYCLES 137,858 April-2004 90,532 Change % 52

TOTAL 2 WHEELERS 3 WHEELERS TOTAL 2 & 3 WHEELERS Exports out of the above

147,592
17,453

105,247
16,152

40
8

165,045
19,007

121,399
16,838

36
13

April-August 2005 Volumes

April-August April-August Change % 2005 2004 687,174 485,791 41 742,502 558,899 33 98,678 841,180 88,943 95,577 654,476 78,875 3 29 13

MOTORCYCLES

TOTAL 2 WHEELERS 3 WHEELERS TOTAL 2 & 3 WHEELERS Exports out of the above

March-2005 Volumes
MOTORCYCLES March2005 134,670 144,776 18,754 163,530 24,404 March2005 94,223 118,680 20,139 138,819 13,625 Change % 42.5 22.0 -6.9 17.8 79.1

TOTAL 2 WHEELERS 3 WHEELERS TOTAL 2 & 3 WHEELERS Exports out of the above

Reasons of reduction in Export

Heavy rains in Maharashtra took their toll on export dispatches, leading to a drop in volumes Mumbai Custom house Agents strike for a few days which hampered shipping of goods. Units are awaiting shipping in Mumbai.

Three wheelers are banned in Bangladesh because of emission problems.

Reasons of reduction in Export

To enhance customer value further, the Bajaj CT 100 is undergoing an upgrade incorporating the Exhaust Tec (patent applied) and advanced SNS (Spring -in-Spring) rear suspension (patent applied) - bringing class leading ride comfort to this product. Production constraints associated with this change resulted in lower sales of CT 100 model in June

Future Strategies
Target south & south east Asian countries with products (100cc 180cc) Why not European & US countries? Asian market potential 4-5 m unites (excluding China) Plans to export motorcycles on the back of the Kawasaki brand & distribution network ( Wind 125, Pulsar & Discover)

Future Strategies
Indonesian marketPlans to initially partner multifranchise dealers before setting up its own dealership

After strong foothold in south east Asian markets, now plans to enter in China

Quality Standards
Quality assured by ARAI
( Automotive Research Association of India Pune)

Emission Norms Bharat Stage II