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Syed  G
Golam  G
Gaous 58
Soumodeep  M
Mitra 47
Subha  R
Rudra 51
Tanmoy  D
Dutta 67
Sayak  G
Ghosh 66

ISBE  S
SA-2
History ,, d
development  a
and  g
growth  o
of  Ba ja j  A
Auto  L
Ltd

Bajaj Auto Limited is India's largest manufacturer of scooters and motorcycles. The company
generally has lagged behind its Japanese rivals in technology, but has invested heavily to catch
up. Its strong suit is high-volume production; it is the lowest-cost
scooter maker in the world. Although publicly owned, the company
has been controlled by the Bajaj family since its founding.

The Bajaj Group was formed in the first days of India's

independence from Britain. Its founder, Jamnalal Bajaj, had been a
follower of Mahatma Gandhi, who reportedly referred to him as a
fifth son. 'Whenever I spoke of wealthy men becoming the trustees
of their wealth for the common good I always had this merchant
prince principally in mind,' said the Mahatma after Jamnalal's death. Jamnalal Bajaj

Jamnalal Bajaj was succeeded by his eldest son, 27-year-old Kamalnayan, in 1942. Kamalnayan,
however, was preoccupied with India's struggle for independence. After this was achieved, in
1947, Kamalnayan consolidated and diversified the group, branching into cement, ayurvedic
medicines, electrical equipment, and appliances, as well as scooters.

The precursor to Bajaj Auto had been formed on November 29, 1945 as M/s Bachraj Trading
Ltd. It began selling imported two- and three-wheeled vehicles in 1948 and obtained a
manufacturing license from the government 11 years later. The next year, 1960, Bajaj Auto
became a public limited company.

Rahul Bajaj reportedly adored the famous Vespa scooters made by Piaggio of Italy. In 1960, at
the age of 22, he became the Indian licensee for the make; Bajaj Auto began producing its first
two-wheelers the next year.
Rahul Bajaj became the group's chief executive officer in
1968 after first picking up an MBA at Harvard. He lived next
to the factory in Pune, an industrial city three hours' drive
from Bombay. The company had an annual turnover of Rs 72
million at the time. By 1970, the company had produced
100,000 vehicles. The oil crisis soon drove cars off the roads
in favor of two-wheelers, much cheaper to buy and many
times more fuel-efficient. Rahul Bajaj

A number of new models were introduced in the 1970s, including the three-wheeler goods
carrier and Bajaj Chetak early in the decade and the Bajaj Super and three-wheeled, rear engine
Autorickshaw in 1976 and 1977. Bajaj Auto produced 100,000 vehicles in the 1976-77 fiscal
year alone.

The technical collaboration agreement with Piaggio of Italy expired in 1977. Afterward, Piaggio,
maker of the Vespa brand of scooters, filed patent infringement suits to block Baj aj scooter sales
in the United States, United Kingdom, West Germany, and Hong Kong. Bajaj's scooter exports
plummeted from Rs 133.2 million in 1980-81 to Rs 52 million ($5.4 million) in 1981-82,
although total revenues rose five percent to Rs 1.16 billion. Pretax profits were cut in half, to Rs
63 million.

New Competition in the 1980s

Japanese and Italian scooter companies began entering the Indian market in the early 1980s.
Although some boasted superior technology and flashier brands, Bajaj Auto had built up several
advantages in the previous decades. Its customers liked the durability of the product and the
ready availability of maintenance; the company's distributors permeated the country.

The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc motorcycle was immediately
successful, and the company aimed to be able to make 60,000 of them a year by 1985. Capacity
was the most important constraint for the Indian motorcycle industry. Although the country's
total production rose from 262,000 vehicles in 1976 to 600,000 in 1982, companies like rival
Lohia Machines had difficulty meeting demand. Bajaj Auto's advance orders for one of its new
mini-motorcycles amounted to $57 million. Work on a new plant at Waluj, Aurangabad
commenced in January 1984.

The 1986-87 fiscal year saw the introduction of the Bajaj M-80 and the Kawasaki Bajaj KB100
motorcycles. The company was making 500,000 vehicles a year at this point.

The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S Champion followed a year later.
About this time, the Indian government was initiating a program of market liberalization, doing
away with the old 'license raj' system, which limited the amount of investment any one company
could make in a particular industry.
A possible joint venture with Piaggio was discussed in 1993 but aborted. Rahul Bajaj told
the Financial Times that his company was too large to be considered a potential collaborator by
Japanese firms. It was hoping to increase its exports, which then amounted to just five percent of
sales. The company began by shipping a few thousand vehicles a year to neighboring Sri Lanka
and Bangladesh, but soon was reaching markets in Europe, Latin America, Africa, and West
Asia. Its domestic market share, barely less than 50 percent, was slowly slipping.

By 1994, Bajaj also was contemplating high-volume, low-cost car manufacture. Several of
Bajaj's rivals were looking at this market as well, which was being rapidly liberalized by the
Indian government.

Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The company was the
world's fourth largest manufacturer of two-wheelers, behind Japan's Honda, Suzuki, and
Kawasaki. New models included the Bajaj Classic and the Bajaj Super Excel. Bajaj also signed
development agreements with two Japanese engineering firms, Kubota and Tokyo R & D. Bajaj's
most popular models cost about Rs 20,000. 'You just can't beat a Bajaj,' stated the company's
marketing slogan.

Key Dates in bajaj History

• 1971 - three-wheeler goods carrier

• 1972 - Bajaj Chetak
• 1976 - Bajaj Super
• 1977 - Rear engine Autorickshaw
• 1981 - Bajaj M-50
• 1986 - Bajaj M-80, Kawasaki Bajaj KB100
• 1990 - Bajaj Sunny
• 1994 - Bajaj Classic
• 1995 - Bajaj Super Excel
• 1997 - Kawasaki Bajaj Boxer, Rear Engine Diesel Autorickshaw
• 1998 - Kawasaki Bajaj Caliber, Legend(India's first four-stroke scooter)
• 2000 - Bajaj Saffire
• 2001 - Eliminator, Pulsar
• 2003 - Caliber115, Bajaj Wind 125, Bajaj Pulsar
• 2004 - Bajaj CT 100, New Bajaj Chetak 4-stroke with Wonder Gear, Bajaj Discover
DTS-i
• 2005 - Bajaj Wave, Bajaj Avenger, Bajaj Discover
• 2006 - Bajaj Platina
• 2007 - Bajaj Pulsar-200
Present Market competitor of Bajaj Auto’s in different segments

The main competitors of Bajaj two wheeler in the market are Hero Honda and TVS. In case of
motorcycle the market is divided in different segments. Here segmentation is generally done in
the basis of price, engine power, features etc. Typically in Indian market there are segments
comprising of 100cc, 100-125cc, 150-180cc, 180cc and above.

Bajaj motorcycle in 100cc segments and its competitors

Bajaj Platina: - Bajaj Platina is a new 100cc bike from Bajaj Auto
Ltd. with a mileage of 70 km on road conditions. The bike is
equipped with exclusive streak design side panels and with sleeker
rear panels. It is a budget bike in two variants, complimenting the
existing CT 100 model from the company in the lower segment of
the bike market. Some of the important features are

1. Superior engine performance for practical riding ����� �������

condition.

2. World first SNS (spring N spring) rear suspension with the longest travel in its class of
100mm

3. Priced around Rs 34000-36000.

Bajaj Sonic:- It is a 100cc bike segment with robust look and

cool style. Distinct features of Sonic are

1. DTS-I twin plug technology with exhaust TEC and direct fuel
injection

2. Disc brake and electric start.

3. Alloy wheels and integrated headlight and instrument cluster

Bajaj Sonic
4. Priced around Rs 35000- Rs 40000.
 Main competitors in this segment are

Hero Honda Passion Plus:- It is a 100cc bike from Hero Honda wit all
new impressive design with host of safety features. It has a 12.8 lt engine
and priced around Rs 42,000.

Hero Honda Splendor Plus:- It is a specialized bike for office goers having impressive design
and styling. Priced at around Rs 40,650 and having high mileage and low maintenance cost are
the special weapon of this bike .

TVS Centra:- Launched with the latest VTI( Variable timing intelligent) engine technology with
7.5 bhp, 11 lts engine and priced around Rs 33,000- 37,000.

Ba ja j  B
Bikes  iin  1
125  c
cc  ssegment

Bajaj Discover DTSi  :- Discover is a bike with latest features. The

base model is 112cc and DTSi is 125cc. The 112 cc gives the rider
the best mileage of 101 kmpl. Comprised of athletic, lean and
muscular styling , disc brakes and electric start , microprocessor
controlled digital system makes it a distinct in this segment.

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Bajaj Wind :- Powered with the state of the art 125cc K-TEC engine
technology, wind produces the strong output of 10.8 bhp with torque
9.8Nm @ 7000rpm. With efficient braking system Bajaj Wind priced at Rs
50000 advertised as a WORLD BIKE.

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Business Level Strategy of Bajaj Auto:

In the long 64 years of its business life in India Bajaj Auto has changed its business level
strategy from time to time as it evolved through the difficulties of the demand of the market. In
the very early stage the company was in a joint technical collaboration with Italy’s Piaggio &
Company. Bajaj Auto then used to manufacture and market Piaggio’s Vespa Brand Scooters. For
the first 20 years of its history Bajaj Auto didn’t feel to introduce any new product due to the
great demand of Vespa Scooters. As the agreement with Piaggio expired in 1971, Bajaj Auto
launched three wheeler goods carrier in1971. In 1972 a new model named ‘Chetak ’was
launched. Thereafter came a timeline of new releases like Bajaj super, Bajaj M-50. After the
two-wheeler industry was liberalized Bajaj Auto collaborated with Japan’s Kawasaki Motors.
Models like Kawasaki-Bajaj KB 100, Bajaj Sunny were released.

Bajaj Auto Ltd. has always targeted the middle class Indian to expand their market. When the
global MNCs like Honda Motors, Yamaha and Suzuki started their business in India by merging
with various Indian business groups Bajaj Auto felt an immediate threat. They changed their
business tagline from ‘You just can’t beat a Bajaj’ to ‘Hamara Bajaj’. In 1998, the environment
became more complicated. Hero-Honda was gearing up to contest Bajaj Auto’s dominance in the
scooter market. There was a million dollar question to the managers of Bajaj Auto: What
products should it make to dominate India’s two and three wheeler companies.

In 1996, the major challenges the company was facing were (1) Share in customer’s mind, (2)
Product differentiation, (3) Customer satisfaction, (4) Customer retention and (5) Cost control.
To complete the transition of a new Bajaj Auto, the management team gave priorities in
accessing new technologies, introducing new models, making a strong presence in the rapidly
growing motorcycle market, creating a marketing culture, revamping manufacturing practices,
focusing on quality, improving the supply chain and to integrate into a conservative corporate
culture.
Recommendation

Focus on high Margin products: Around 50% of the two wheeler consumer buy high quality
products (products of executive and premium segment motorcycle) Margin on this products are
higher.

Bajaj Auto Ltd adopt a deliberate strategy of focusing on lower end motorcycle and scooters
segments.

High margin products- Pulsar, Discover, Avenger, Three wheeler.

Low end products- Platina, Scooter, Mopeds.

Below are important recommendation

1. Company should focus on fast growing motorcycle segment.

2. In view of the new threat posed by Honda in scooter segments, the company needs to
review its products line up and launch new products to cater the changing needs of the
market.
3. The company needs to take a look at its ungeared scooter offering and need to adopt to
the latest trends.
4. The company needs to tap the international market more efficiently and effectively as
there is a huge potential market available outside India. Bajaj may use the Kawasaki’s
international chain to tap the market outside India.
5. Bajaj should watch out for the segments comprising of bikes in and above 300cc – 500cc
or above as there is a huge demand of this bike in urban India specially among the
young generation in India.
6. Bajaj Auto Ltd should try to develop modern eco friendly vehicles such as vehicles
running on alternative source of powers, which may prove to revolutionize the whole
market.