Bajaj Auto Data

8/12/2019 Bajaj Auto Data

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Bajaj Auto

Auto Industry analysis:

The automobile industry in India is one of the largest in the world and one of the fastest

growing globally. Indias passenger car and commercial vehicle manufacturing industry is

sixth largest in the world. It is the second fastest growing automobile market in the world.

According to the Society of Indian Automobile Manufacturers annual vehicle sales are

projected to increase to 5 million by 2015 and more than 9 million by 2020.

Automobile industry in India has huge potentials thanks to the growth of the middle class

along with their overall economic growth. This is the reason of attraction for internationalbrands who are trying hard to find new market for their products due to stagnated growth of

auto sector in Europe, US and Japan.

The automobile industry was marked by an impressive growth in the last fiscal. The overall

Indian automobile industry grew by 12.12 percent in 2011-12 by selling 17.3 million units,

majorly driven by demand for two wheelers and light trucks.

PEST analysis:

Political:

1) At present 100% foreign direct investment is permissible under automatic route in thissector including passenger car segment.

2) The import of technology/technological upgradation on the royalty payment of 5%without any duration limit and lump sum payment of USD 2 million is also allowed

under automatic route in this sector.3) Automatic approval for foreign equity investment upto 100% of manufacture ofautomobiles and components is permitted.

4) The automobile industry is delicensed.5) Import of components is freely allowed.6) In order to enforce compliance and energy conservation act, the government has

recently given its nod to fuel mileage standards and labeling for new cars.7) SIAM is working on a voluntary recall policy that is in favour of auto manufacturers.

On a similar note, government is in the process of constituting a national automotive

board which would become a formal setup to look into the issue of recall of vehicles

and hence improve manufacturing standards.


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8) No special tax on diesel cars.9) General excise duty for automobiles has been hiked by 2% from 10% to 12% which

will increase prices of small cars, two wheelers, etc.

Economical:

1) Inflation always has a negative impact on the industry. The industry comes to astandstill when there is an inflation in the market. The sales decrease because of the

rise in prices of the vehicles. The prices of the vehicles have to be increased to meet

the increase in price of the raw materials required for manufacturing.2) Higher interest rates have a negative impact on the industry. Higher interest rates

means that it costs more for consumers to borrow money for auto loans. Therefore the

demand decreases and hence the sales decrease.3) Inflation and high interest rates also dampens the economic growth.4) Therefore to obtain high economic growth and to increase the sales the inflation

should be controlled and the interest rates should be kept low.

Social:

1) People across all age groups buy personal vehicles.2) Rising per capita income, rising working population and middle class urbanization

have all contributed to the growth of this industry.

3) People are more inclined towards buying personal vehicles to maintain their statusquo.

4) People realize that during an emergency a personal vehicle will be more useful ratherthan relying on public modes of transport.

Technological:

1) Spending on R&D in India has increased over the last few years.2) Cost advantage India offers makes more players likely to scale up R&D outsourcing

to India3) Role of IT is increasing in this industry. They are developing solutions for the

automobile industry.

4) The increasing environmental pollution is a concern for manufacturers and allassociated with the industry. Some of the initiatives to reduce emission include

introduction of fuel efficient cars, electric and hybrid cars.


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Company Profile of Bajaj Auto Ltd

Bajaj Auto Limited is an Indian motorised vehicle-producing company. Bajaj Auto is a part

of Bajaj Group. It was founded byJamnalal Bajaj atRajasthan in the 1930s. It is based

inPune,Mumbai,with plants inChakan (Pune), Waluj (nearAurangabad)andPantnagar in

Uttarakhand. Bajaj Auto Ltd is one of the leading two & three wheeler manufacturers in

India. Bajaj Auto is the third largest manufacturer of motorcycles and in India & world. The

company is well known for their R&D, product development, process engineering and low-

cost manufacturing skills. The company is the largest exported of two and three-wheelers in

the country with exports forming 18% of its total sales. In FY2012, Bajaj Auto sold over 3.83

million motorcycles in India and abroad. In November 2007, Bajaj Auto International

Holdings BV, a wholly owned subsidiary company acquired 14.51% equity stake in KTM

Power Sports AG of Austria, Europe's second largest sport motorcycle manufacturer for Rs

345 crore.

Revenue Rs. 202.01 Billion / $ 3.1 Billion (2012)

Net IncomeRs. 30.45 Billion / $ 470 Million (2012)

Vision

To attain World Class Excellencyby demonstrating Value Added products to customers.

Mission

Focus on value based manufacturing. Fostering team work & enhancing the capability of the team. Continual Improvement. Total Elimination of wastes. Pollution Free & Safe Environment.

Awards

Bajaj Auto was awarded the NDTV Profit Business Leadership Award 2010 at thehands of the Hon'ble Finance Minister Shri Pranab Mukherjee on 1st September 2010.

Bajaj Auto - Bajaj Pulsar DTS-Fi won bike of the year in 2007 by CNBC-TV18Autocar Auto Awards.

Bajaj Platina 100 cc won bike of the year 2007 by NDTV Profit Bike India. Bajaj Auto - Chakan Plant won Super Platinum Award For manufacturing Excellence

in 2006-07 by Frost and Sullivan.
http://en.wikipedia.org/wiki/Jamnalal_Bajajhttp://en.wikipedia.org/wiki/Rajasthanhttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Chakanhttp://en.wikipedia.org/wiki/Aurangabad,_Maharashtrahttp://en.wikipedia.org/wiki/Pantnagarhttp://en.wikipedia.org/wiki/Pantnagarhttp://en.wikipedia.org/wiki/Aurangabad,_Maharashtrahttp://en.wikipedia.org/wiki/Chakanhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Punehttp://en.wikipedia.org/wiki/Rajasthanhttp://en.wikipedia.org/wiki/Jamnalal_Bajaj


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Bajaj CT 100 bagged Motorcycle Total Customer Satisfaction Study in 2005 by TNSAutomotive.

Product Portfolio

Shareholding pattern as on 31stmarch 2012:

Categories no. of shares % to total capital

Promoters 144,733,332 50.02

Friends and associates of promoters 30,641,279 10.59

GDRs 169,088 0.06

Foreign institutional investors 47,516,700 16.42

Public financial institutions 9,290,035 3.21

Mutual funds 7,278,439 2.52

Nationalized and other banks 122,508 0.04

NRIs and OCBs 1,189,892 0.41

Others 48,425,747 16.73

Total 289,367,020 100

Two Wheelers

Entry Level

Platina 100cc

& 125 cc DTSiKristal DTSi

Mid Level

XCD 135 cc

DTSi

Discover 100cc

& 135 cc DTSi

Peformance

Pulsar 150,

180, 200 &

220 cc DTSi

Avenger 200

DTSi


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SWOT Analysis

SWOT Analysis

Strengths Highly Experienced Management. Extensive focus on Research & Development. High Performance Products across all categories. Number one position in Exports. Great financial support network for financing the automobile.

Weakness Strong Cash base but hasnt been invested efficiently. Distribution network is not as strong and extensive as Hero Moto

Corp.

Not a well established global brand inspite of huge volumes.Opportunity Rising disposable income.

Decline in interest rate for two wheeler financing. Shift from entry level motorbikes to performance oriented bikes. Its $2500 low emission car RE-60. Growing gearless trendy scooters market.

Threats Limitation of designs and technological. Foreign players coming in India.

New Plans

Indian two wheeler giants, Bajaj Auto has planning a host of new launches in the Indian two

wheeler industry during the coming 12 months to take on rivals like Honda Motorcycle and

Scooter India.

Bajaj recently lost its number two position in the Indian market to Honda and thus the

company is aiming to launch 2 new Pulsar, and 6 new Discover variants during the next 12

months to increase the competition and regain their No 2 position in the country. The

company is planning to expand its presence both in the Indian market as well as in foreign

markets with the 8 new models planned.

Bajaj is planning to launch its new Pulsar 375 motor bike this year in the Indian market tocompete better with both domestic and global rivals in the country.

The company is planning to launch two super sports motorcycles under its key brand Pulsar.

These bikes will be faster than any other bikes in its segment at present in India. Bajaj is

planning to launch a range of six new Discover bikes in next six months.

New Launches

1) Bajaj Auto Plans To Launch Super Sports Bikes In Next Few Months. These bikeswill be faster than any other bikes in its segment. (July 23, 2013)


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2) Bajaj launched Discover 125T at Rs. 52500. (July 13, 2013)3) Bajaj & KTM launches 390 Duke at Rs. 1.8 Lakh. (June 25, 2013)

Conclusion

Bajaj auto faces stiff competition from the Market leader Honda and closest rival Hero. Fromthe survey, it is seen that Bajaj is only able to somewhat satisfy their costumers from their

products. They need to create a great sense of joy in their customers by offering unmatchedproduct features and service that will make their customers loyal to the brand and this willgreatly help Bajaj in increasing its market share. Bajajs product prices are in comparisonwith its leading competitors. The problem is that consumers do not think that Bajaj has that

much value and hence prefer to buy other brands. Bajaj need to offer more competitivepricing and better promotions to sell their motor cycle better.The two wheeler industry though it is facing a slight downturn today, is still highly lucrativeand is likely to provide immense future potential for Bajaj, as is evident from the forecasts forthe industry.

Bajaj Auto Data

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