Bajaj Auto was founded in 1926 and started operations in 1945. It produces motorcycles, scooters, and three-wheelers at three plants in Maharashtra. It has a technical partnership with Kawasaki for some models. While it is a market leader, it faces competition from Hero Honda and TVS. It should have introduced new products across segments sooner, anticipated changing market dynamics, increased customer initiatives to build loyalty, and sustained long-term joint ventures for synergies.

1. PRESENTED BY:
AMITANSHU SRIVASTAVA.
ANKHI CHATTERJEE.
ANIRUDDHA DARIPA.
ANKUR GOLCHHA.
ABHIRUCHI CHANDGOTHIA.

2.  Founded in 1926 by JAMNALAL BAJAJ.
Bajaj Auto started its operations in 1945, as in

importer of two and three wheelers.
BUSINESS:

Bajaj Auto makes five kinds of motorcycles, two
kinds of Scooters and eight kinds of three
wheelers.
PARTERSHIP:

Bajaj Auto has a technical tie-up with Kawasaki Heavy
Industries of Japan to produce a range of the
latest, state-of-art two-wheelers in India.
LOCATION:

Bajaj Auto has three plants in Maharashtra, at Akurdi,
Waluj and Chakan.

3. Pulsar 150 DTSi
Bajaj Bajaj Sunny

Discover
Bajaj Bajaj Chetak

Avenger
Bajaj Bajaj Cub

Platina
Bajaj Bajaj Super

Kawasaki KB 100 RTZ
Bajaj Bajaj Wave

Boxer
Bajaj Bajaj Legend

Caliber
Bajaj Bajaj Bravo

Pulsar 220 DTS-Fi
Bajaj
Krystal
Bajaj
Bajaj Blade
UPCOMMING MODELS: Bajaj Sonic

4. No Comparative sales of scooters and bikes.

No information on cost / vehicle.

No information on the realization / vehicle.


5. BAJAJ FACES FIERCE COMPETITION IN HOME

GROUND NAMELY FROM HERO HONDA & TVS .
HERO HONDA HAS TAKEN THE LEAD IN

VOLUMES AND MARKET SHARE OVER BAJAJ .
BAJAJ IS STRONG IN ENTRY LEVEL AND

PREMIUM SEGMENT, BUT DOESN'T HAVE A
STRONG PORTFOLIO IN EXECUTIVE SEGMENT.

6. As at 31 %to Total As at 31 % to Total
March 2003 March 2002
Govt. Securities & 8,653 29.7 5,797 25.6
Bank Deposits
Mutual Funds including 1,739 6.0 510 2.3
UTI
Debentures & Bonds 8,698 29.4 4,040 17.9
Preferences Shares 854 2.9 917 4.1
Inter Corporate 1,651 5.7 2,609 11.6
Deposits
Loan to Bajaj auto holding 140 0.5 184 0.8
Ltd
Fixed income investments 21,735 74.7 14,057 62.3
Equity Shares based on 7,355 25.3 8,499 37.7
Mutual Funds
Total Cost 29,090 100.0 22,556 100.0
Market Value 29,433 21,235

7. PARTICULARS 2002 2003
Net Sales 4172.1 4829.37
PBIT 705.22 804.12
Less Interest 3.38 1.12
PBT 701.84 803
Less Tax 183.68 268.36
PAT 518.16 534.64
Net Fixed Assets 1368.28 1298.23
Net Current Asset 1989.83 2155.14
Average Fixed Assets 1365.31 1333.25
Average Current Assets 2025.73 2072.48
Average Assets 5024.74 5858.8
Average Equity 215.36 215.36

8. Particulars 2002 2003
PBT 701.84 803
PAT 518.16 534.64
= TAX COVERAGE MARGIN .738 .665
PBIT 705.22 804.12
PBT 701.84 803
= INTEREST COVERAGE MARGIN .995 .999

9. PARTICULARS 2002 2003
NET SALES 4172 4829.37
PBIT 705.22 804.12
= GROSS PROFIT MARGIN 0.207 0.202
NET SALES 4172 4829.37
AVG ASSETS 5024.74 5858.8
= AVG ASSETS TURNOVER 0.830 0.824
AVG ASSETS 5024.74 5858.8
AVG EQUITY 101.19 101.19
= EQUITY MULTIPLIER 49.66 57.90

10. PARTICULARS 2002 2003
TAX COVERAGE MARGIN .738 .665
INTEREST COVERAGE MARGIN .995 .999
GROSS PROFIT MARGIN .207 .202
AVG ASSETS TURNOVER .830 .824
EQUITY MULTIPLIER 25.11 29.3
RETURN ON EQUITY 316.79 323.98

11. BAJAJ AUTO HERO HONDA
Current Ratio 1.20 0.16
BAJAJ AUTO HERO HONDA
Debt –Equity Ratio 0.26 0.16
Interest Coverage 717.76 33.85
BAJAJ AUTO HERO HONDA
PAT (NNRT)as % of sales 17.50 67.10
Return on Capital 21.47 94.64
Employed

12. Complacent.

License Raj Syndrome.

No technological up gradation of

products.
High disposable ideal cash.

Risk averse investment portfolio.


13. Didn’t foresee future trendz .

Bajaj was a late riser to the competition.

No long lasting foreign jv’s

Lack of professional management team.


14. BAJAJ MATRIX
PULSAR SCOOTERETS
SCOOTERS
AUTO

15. STRENGTH WEAKNESS
High economies of scale. Hasn't employed the excess cash for
High economies of scope. long.
Legacy of brand name. Centralized paternalistic
Widespread distribution network. management style Not a global player
in spite of huge volumes.
No collaboration with any of the
foreign players .
OPPORTUNITIES THREATS
The growing gearless trendy The competition catches-up any
scooters and scooterette market. new innovation in no time.
 Can use the existing R&D Threat of cheap imported
capabilities for new models. motorcycles from China.
Can invest and grow the life style Tough competition faced by foreign
segments. as well as domestic players.

16. Mkt share Mkt share 3-wheelers
Motorcycle/Stepthrou's 2002-03
2002-03 2%
Bajaj Auto 15%
Atul Auto
24%
Hero Honda
Bajaj Auto
44%
9%
TVS Bajaj tempo
6%
Yam aha 4%
M&M
18%
Others
8% 70% Piaggio vehicles
Mkt share
scooters/scooterette moped motorcycle/step-throu's
Scooter/Scooterette 2002-03
6000000
5000000
Bajaj Auto
4000000
25%
3000000 39% HMS
2000000
TVS
17%
1000000
Others
0 19%
FY96 FY97 FY98 FY99 FY00 FY01 FY02 FY03

17. Sales - Value wise break up (Rs mn)
Sales value (Rs mn) 2002-03
Motorcycles 26,082
Scooters geared 5,261
Scooters ungeared 1,254
Step thru’s 981
Three wheelers 11,542
Spare parts 2,324
Sales - percentage break up
Sales break up % (value) Sales break up
2002-03 % (volumes) 2002-03
Motorcycles 55 60
Scooters geared 11.1 18.6
Scooters ungeared 2.6 4.2
Step thru’s 2.1 3.8
Three wheelers 24.3 13.4
Spare parts 4.9 -

18. HH.TVS,HONDA
HH, TVS , HONDA
NO
PROBLEM
IN THIS
QUADRANT
CONSUMERS
ADVENT OF WERE
BIKES AND BECOMING
DEMAND OF DEMANDING IN
PERSONAL TERMS OF
MOBILITY CHOICE

19. They should have introduced new products across

segments.
The company should have anticipated the change

in market dynamics and introduce bikes earlier
then they did.
They should have increased the customer –centric

initiatives and command more loyalty.

20.  Bajaj should have discarded the notion of
being the numero- uno and should have
moved with times.
 Investments should have been made in high
yeilding avenues.
The company should have sustained their

JV’s for long term synergies.