Hamara Bajaj- the Rising Star
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HAMARA BAJAJ- THE RISING STAR REPORT SUBMITTED To Dr.HIMANI SHARMA Submitted by: Khushboo Chawla D-09 Tanya Nagpal D-11 Renuka Tarale D-16 Himani Madaan D-19 Barkha Puri D-20 Poonam Singh D-22 INTRODUCTION TO BAJAJ AUTO LIMITED Bajaj Auto Limited (Bajaj Auto) is a manufacturer of scooters, motorcycles and three-wheeler vehicles and spare parts thereof. The Company operates in two segments: Automotive and Investments. The group's flagship company, Bajaj Auto, is ranked as the world's fourth largest two- and three- wheeler manufacturer. During the fiscal year ended March 31, 2012, the Company sold 4.35 million units, consisting of over 3.83 million motorcycles and more than 515,000 three-wheelers. Bajaj Auto is the flagship of the Bajaj group of companies. The group comprises of 34 companies and was founded in the year 1926. 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. 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. Jamnalal Bajaj, founder of the group, was a close confidant and disciple of Mahatma Gandhi. His son, Kamalnayan Bajaj, took over the reins of business in 1942. Kamalnayan Bajaj not only consolidated the group, but also diversified into various manufacturing activities. 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 INR.72 million to INR. 120 billion, its product portfolio has expanded 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. Bajaj Auto's has three plants, Two at Waluj and Chakan in Maharashtra, One at Pant Nagar in Uttranchal. Bajaj is present in over 50 countries all over the globe. It has Dominant presence in Africa, Latin America and South Asia with increasing market share every year. It Offers The Following Range Of Products. Scooters Cars Motorcycles Upcoming Discontinued Models Models Bajaj Bajaj Bajaj XCD Kristal Bajaj Lite concept Bajaj Sunny Platina 100cc 125 sprint DTSi Bajaj Platina 125 Bajaj RE60 - the Tata Bajaj Chetak DTS-Si Nano competitor Bajaj Platina 125 Bajaj CT 100 DTS-Si Bajaj Bajaj Super Discover 135 DTS-i Bajaj XCD 125 Bajaj Saffire DTS-Si Bajaj XCD 135 Bajaj Wave DTS-Si Bajaj Legend Bajaj Pulsar 135 Bajaj Pulsar 200 Bajaj DTSi Discover 110cc Bajaj Pulsar220 Bajaj Pulsar 200 DTS-Fi DTSi Bajaj Bajaj Pulsar 220 Discover DTS-i DTSi 125cc Bajaj was initially a producer of Scooters only but slowly ventured into producing bikes as well. So, what led to this shift in focus? Bajaj Auto is one of the oldest and the second largest two wheeler manufacturer in India. In addition to coping with fierce competition from other players in the two wheeler segment, it also has to protect its market share from the impending onslaught of low price small cars such as Tata Nano. Holding on to its position in such a challenging market environment requires innovative strategies and deep understanding of consumers needs. The jingle promised that it would stay with Indians for today and tomorrow as a Strong Symbol of a Strong India, and two generations grew up humming the tune. But finally when the India of the license-permit raj gets to take its seat at the global high table, the scooter that got Indians there is fading away. Bajaj Auto, whose name has been synonymous with scooters in India for decades, has stopped producing the vehicle. The company had stopped making the Chetak, once the world's largest selling scooter in 2006. In the 1960s, Bajaj Auto got a manufacturing license from Italy’s Piaggio and began manufacturing and selling scooters under the brand name Vespa. In the seventies, when Piaggio refused to renew its license, Bajaj began manufacturing under its own brand, like the Bajaj Chetak, which was an instant success and even witnessed black marketeering with consumers ready to pay a hefty premium to own one. But with the market moving towards motorcycles, Bajaj stopped production of its bestselling brands like Chetak and Super in 2006 amid plummeting sales. It again entered into scooters, but tentatively, in 2007 by launching the Kristal. Till the 1980s, Bajaj was a value for money brand, churning out scooters with names like Chetak, Super, Priya et al. They all looked the same and any one could tell they belonged to the same family. In fact, Bajaj had various brands under its umbrella and their brand identity remained “Humara Bajaj”. In the absence of any outside competition, the Bajaj brand name flourished, with Chetak ruling the two-wheeler scooter segment. There was a time, getting delivery of a Chetak used to command waiting periods of years, so much so that Rajeev Bajaj's father and Bajaj Auto chairman Rahul Bajaj once dared the government to arrest him for exceeding government permitted production limits. Bajaj’s pithy but pitch-perfect base line, “Humara Bajaj” struck a chord in every Indian heart while the title song of “Buland Bharat Ki Buland Tasveer” added great value to its scooters. During the ’80s and ’90s, Bajaj launched quite a few variants of Chetak and other newer models. But deviations from the main Piaggio design did not always prove successful. The failures started with the Bajaj Rave that the company promoted as a step-through design for an earlier model, launched in the early 1990s. Next came the Stride, which was a more plasticky Chetak. The Bravo, too, was derived from the Chetak but did not go well with buyers. The Legend, which was a four stroke version of the Chetak, bombed miserably. Next in line was the Chetak 4 stroke, which again failed to stir the market. The death knell of Bajaj’s scooter business was sounded when the company officially stopped the production of its flagship Chetak in December 2005. In bringing the curtains down on Chetak the company said that the product no longer had any relevance to the customer, thus ending the saga of ‘Humara Bajaj’. By the mid 80s and 90s, the two-wheeler segment had started shifting to motorcycles. Scooters were no longer the attractive option they once seemed to be. Motorcycle sales started rising in 1990’s and by 1999 motorcycles overtook scooters in sales for the first time. It was a clear indication of shift in consumer preference. The move is part of Bajaj’s new strategy to overtake Honda and become the number one motorcycle manufacturer in the world. It is the second- largest two-wheeler manufacturer in India. Hero Honda, which was established in 1984 by Hero Group, and Honda Motor Corporation of Japan had been reaping the benefits of this trend. Bajaj entered the motorcycle space in 1986 with the launch of Kawasaki Bajaj KB100, in a tie-up with Kawasaki of Japan. But the company found itself lagging behind players such as Hero Honda, Yamaha and TVS, who dominated the market and had carved up the business amongst themselves. In order to succeed in the motorcycle segment it was important for Bajaj to shed its brand image from being a scooter manufacturer to a motorcycle maker. Earlier scooter as two- wheeler vehicle symbolized the middle class Indian families but now the bike symbolizes middle class India. Rajiv Bajaj, Managing Director of Bajaj Auto, reasoned the shifting from scooters to bikes that in order to become a motorcycle specialist and number one in the world, they have to make a sacrifice, of manufacturing both motorcycles and scooters. To get cracking on its ambition of becoming a credible motorcycle manufacturer, the company built a new plant near Pune, away from the old plant at Akurdi. It invested big income in R&D and product development. The company also had to face challenges of sales & distribution and marketing & advertising. So far Bajaj’s dealers had been selling scooters; ergo, they had little idea how to sell motorcycles. So the entire dealership network was trained to sell motorcycles. Finally, in November 2001, Bajaj Auto launched Pulsar 150 & 180. The very first generation Pulsar was equipped with an 18-litre fuel tank, muscular look, disc brake (which was considered a novelty in that time), self start option, aircraft type filler, a unique speedometer with an rpm metre and, above all, power plants which could generate massive 12 bhp and 15 bhp with power- to-weight ratio of over 100bhp/tonne. The entire project took 30 months time and cost around Rs. 1 billion. But it became an icon of performance brand in the country and has held on to that position ever since. Nowadays every single second bike sold in the performance segment is a Pulsar, which shows its dominance in the Indian marketplace. The decision to move away from scooters, according to Bajaj, is pegged on three reasons. Firstly, the company saw good profitability in selling strong brands like Pulsar and Discover 100cc motorcycles. The EBITDA margin for the second quarter of year 2009 was at 22 per cent, which was the highest in the auto industry so far. For the third quarter of same year they hoped to do better. Vaishali Jajoo, analyst at Angel Broking, told that margins derived from selling Pulsars were above industry average, at 15 per cent.