1. Bajaj Auto Ltd: Overtaken in the
Indian Scooter Market
•Manish Kumar (09BS0002819)
•Taslim Qureshi (09BS0002530)
•Umang Jalan (09BS0002611)
•Varun Saxena (09BS0002653)
•Vibhuti Bhardwaj (09BS0002667)
•Vinay Verma (09BS0002703)
•Yashaskar Paliwal (09BS0002776)
• Founded in 1926 by JamnaLal Bajaj.
• His son, Kamalnayan Bajaj, then 27, took over the reins of
business in 1942.
• 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.100.76 billion (USD 2.3 billion).
• The company was incorporated on April 30, 2007 as a wholly
owned subsidiary of erstwhile Bajaj Auto Ltd (the holding
company) with the name Bajaj Investment & Holding Ltd. The
company received the certificate of commencement of business
on May 7, 2007.
4. Bajaj Auto Ltd.(BAL)
• Bajaj is India's second largest motorcycle maker,
smaller than Honda Motorcycle Scooter India, but
larger than TVS Motor Co. Ltd.
• Bajaj Auto, is ranked as the world‟s fourth largest
two- and three- wheeler manufacturer.
• The company is well known for their R&D, product
development, process engineering and low-cost
In the mid -1940s,BAL started as an important of two –and
three-wheelers .in the early 1960s,BAL ,in collaboration with
piaggo ,started manufacturing vespa brand scooters at its
plant near Pune , Maharashtra.
In 1970s,BAL started manufacturing scooters under the Bajaj
Bal‟s first scooter model under the Bajaj brand was
introduced in 1972.(Chetak)
In the late 1990‟s the Indian two wheeler market witnessed a
shift in consumer preferences.
In 2005-06 scooter sales in the Indian market were around 1
million units annually and consisted predominantly of
gearless scooters. In early 2006 BAL announced that it would
launch two new models of gearless scooters in 2006-07.
• Bajaj Auto is committed to nation-building and
contributing to the uplift and development of the
weaker sections of society. This is a legacy of the
founders, Jamanalalji, Kamalnayanji and Ramkrishna
• Jankidevi Bajaj Gram Vikas Sanstha (JBGVS)
• Samaj Seva Kendra.
• Kamalnayan Bajaj Hospital
7. BACKGROUND NOTE:
• 1926- Bajaj Auto was found by JamnaLal Bajaj.
• 1956- Company secured a license from the GOI.
• 1960- Company went public & collaboration with
• 1961- Started the production of scooters.
• 1962- Started the production of three wheelers.
• 1971- Started selling scooters under the Bajaj brand
• 1972- BAL Introduced the Bajaj Chetak scooters.
• 1975- BAL entered into a joint venture with western
Maharashtra Development corporation.
8. BACKGROUND Cont…..
• 1986:- BAL entered into a technical partnership with
Kawasaki Heavy Industries & launched the
Kawasaki – Bajaj.
• 1990:- The Bajaj “Sunny” was introduced.
• 1997:- BAL launched the “Bajaj Boxer”.
• 1998:- BAL introduce the “Bajaj Caliber”.
• 1999:- The company launched the “Bravo”, a geared scooter.
• 2000:- Bal launched the “Saffire”, a gearless scooter.
• 2001:- It introduced the “Pulsar”.
• 2004:- Bal created a new Logo.
• 2005:- The “Saffire” was relaunched as the Wave.
• 2006:- Bal launched the “Platina”.
• 2006:- Indian two wheeler industry was the second largest in
9. BAL & the Indian Two-Wheeler
• 1950s -1980s: "License Raj” .
• Domestic market –protected-Govt.restriction.
• 1950s-Automobile Products of India(API).
• Other players:
• 1960s:Govt.relaxation to domestic companies.
• 1970s: BAL manufacture scooters under the "Bajaj”
• Scooter were more preferred to motorcycles.2-
wheelers demand increased due to inefficient
transport system, the Chetak & the Super launched.
• It act as Sellers Market like other consumer goods &
customers had to wait for many years for
delivery.(10-12 yrs for Bajaj Chetak).
• It plays a major role in dowry in India.
• 1970s-1980s-Govt. introduced MRTP Act & FERA.
• Indian manufacturing motorcycles were not fuel
efficient, results low sell.
• GoI changed several policies in 1970s & early 1980s
to give impetus to auto industry.
• Focus on :modernization, technology upgradations,&
healthy competitions in domestic market.
11. Motorcycle segment
• Joint Venture: Foreign players had only option)
• Many players like Honda,Suzuki,Yamaha had joint ventures
with Indian companies.
• The foreign players came with latest technology, efficient
production system etc that enhance the quality of the motorcycle
in India .
• Soon new models come with new style, advanced technology &
• LML entered into joint venture with Piaggio in 1982 , to
produce Vespa, sold well in 1980s-1990s after Chetak.
• 1984:The Kinetic tied up with Honda ,introduced new models ,
new features like self start & automatic gear transmissions.
• 1980-1990s :BAL dominate by Chetak & Super model with their
values for money appeal durability, versatility, low
maintenance,avaliablity of spare parts ,etc.”Hamara Bajaj “ add
12. The Turning Point:
• In 1991 & 1992 – overall sales of two wheelers declined by
15% & 8% respectively because of a recession in the Indian
two wheeler market
• The scooter segment was the largest sub-segment in the two
wheeler market with 42% share (in terms of unit sales)
followed by motorcycles (37%) & mopeds (21%)
• However, in 1990, the pattern of demand changed &
motorcycles became the fastest growing segment
• Motorcycles were preferred to scooters in the rural areas
because of poor road conditions
• Demographic changes – Increasing proportion of younger
people in the overall population
• Lower interest rates on vehicle loans made motorcycles more
• Sales of motorcycles surpassed that of scooters for the first
time in 1999 (with Hero Honda SPLENDOR)
• In 1999-2000 scooter sales fell by around 75,000 units, while
motorcycle sales increased by more than 400,000 units
• BAL had volumes falling 40% year-on-year as scooters were
80% of their total business
• In 2000 Bharat Stage II, a new set of emission norms, came
into effect. It was for petrol two-stroke engines & it gave a
blow to BAL, which primarily sold two-wheelers with two-
14. BAL FIGHTS BACK
Category FY 2001 FY 2000 Growth (%)
Geared Scooters 426,334 757,714 -43.7
Un Geared 78,892 69,726 13.1
Mopeds 121,238 176,961 -31.5
Motorcycles 427,088 254,847 67.6
Total two- 1,053,552 1,259,248 -16.3
wheelersto anticipate consumer response.
• Poor research.
• BAL increased its production of motorcycles by 67.6% in
2001 even as the production of scooters fell by44%
• By 2001, the company was manufacturing as many
motorcycles as geared scooters.
15. BAJAJ HAS RECORD FY 2010,
TARGETS 4 MILLION VEHICLES
IN FY 2011
Particulars April ~ March April ~ March Growth %
MOTORCYCLES 2,506,749 1,907,853 31
TOTAL 2 2,511,600 1,919,625 31
22. Trying to Resurrect Scooter Sales
• Price differential between scooter and motorcycles had
• In 2001, BAL lowered the prices of Chetak and Super by Rs.
5000 to Rs. 8000 and removed some accessories like spare
wheel, luggage box, etc., from the base models.
• In the late 1990s while geared scooter sales were falling, the
gearless scooter segments had been growing at 25% per
• Main purchaser of gearless scooters were
teenagers, women, and older people.
• In 1999-2000, BAL had a market share of 20% in this
segment. In 2000 BAL introduced a new gearless scooter with
a four stoke engine “Saffire”.
• In 2002, the Legend NXT 2, a four stroke geared scooter that
was claimed to offer a motorcycle like mileage of 60-70kmpl
23. • To add to BAL‟s problems, HMSI‟s sold about 10,100 unites
of the Activa within just three months of its launch in 2001.
• Kinetic launched the Nova, another gearless scooter in
2002, which also become quite popular.
• In April 2003, TVS launched the Scooty Pep (with a
75cc, four-stroke engine), an upgrade version of its
Scooty, with better styling, technology, and storage capacity.
• In 2004 Chetak was introduced with a new gear system called
„wondergear‟ in which no gear shifting require.
• New ad campaigns were also launched to brush up the
• BAL was forced to phase out several models including the
Spirit, the Sunny Spice, the Legend and NXT 2, and the
Barvo.The Saffire, reportedly, suffered from several technical
problems. It was replaced by Wave 2005.
24. The Fall OF An Icon
• In Jan 2006, BAL announced that it had stopped
production of the Chetak. So that the company could
upgrade its scooter portfolio and regain the title of
India‟s largest scooter manufacturer.
• Chetak had to phase out because BAL had neglected
it in terms of design, technology, and innovation.
• Chetak had remained unchanged for more than 30
years. Customer used to call it car on two wheels.
• At that time BAL had just one scooter model, the
Wave. By 2005-2006 HMSI was leader in scooter
segment with 50% market share.
• Late 1990’s- popularity of scooters vanish &
motorcycles come into sight
• Reason- uncared for this segment, mileage
problem and fashionable technology design &
launch of new motorcycles model
• Demand of gearless scooter was set to rise(20%
• Reason- Trendy Style, better technology &
mileage, targeted to women and aged
people, easy to function
26. • Auto expo 2006 (New Delhi), BAL Launched two
new gearless scooters
• Kristal DTS-I (100cc); Target- Teenage Girls
• Blade DTS-I (150cc); Target- Young Males
The case traces the company's rise to dominance in
the scooter segment of the market, and its eventual
fall, against a backdrop of changes in customer tastes
It describes the reasons for the shift in demand and
discusses the initiatives that the company undertook
to regain lost ground. The case also discusses the
competition in the Indian scooter market, and ends
with a brief discussion on recent developments in the