This document provides an overview and analysis of Bajaj Auto Limited (BAL), an Indian motorcycle, scooter, and auto rickshaw manufacturer. It discusses BAL's mission, vision, competitive environment using Porter's Five Forces model, and competitive position through a SWOT analysis. It also analyzes BAL's financial performance, competitors like Hero MotoCorp and Honda Motorcycle and Scooters India using an EFE matrix. Key competitors in the highly competitive two-wheeler industry are discussed.

1. BAJAJ AUTO
LIMITED
Strategic Management Assignment- Module 1&2
Submitted by:
Arpana M
Anastha F
Iarihun N
Md. Maaz
Tom P

2. Index
1. About the company
2. Mission and Vision Statement
3. Competitive Structure of the Industry
a. Porter’s Five Force Model Analysis
4. Competitive Structure of the Company
a. SWOT Analysis
5. Competitiveness and Position of Major Rivals
a. EFE (External Factor Evaluation Matrix)
6. Competitive Advantages of the firm
7. Internal Assessment
a. Financial Analysis of the company with the competitor
b. IFE Matrix
8. SWOT MATRIX
9. BCG MATRIX
10. Business Model
11. Functional , Business and corporate Strategies
12. Future direction of the Company

3. About The Company – Bajaj Auto Limited
Founded in 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. The group's flagship company, Bajaj
Auto, is ranked as the world's fourth largest two- and three- wheeler manufacturer and the Bajaj brand is
well-known across several countries in Latin America, Africa, Middle East, South and South East
Asia. It started operations as an importing agent for Piaggio's Vespa scooters in 1948. Its tie-up with
Piaggio ended in 1975.
Bajaj Auto Limited(BAL) is an Indian two-wheeler and three-wheeler manufacturing company. Bajaj
Auto manufactures and sells motorcycles, scooters and auto rickshaws. Bajaj Auto is a part of the Bajaj
Group. It was founded by Jamnalal Bajaj in Rajasthan in the 1930s. It is based in Pune, Mumbai, with
plants in Chakan (Pune), Waluj (near Aurangabad) and Pantnagar in Uttarakhand. The oldest plant at
Akurdi (Pune) now houses the R&D centre 'Ahead'. In the last three years, it concentrated on its Pulsar
and Discover brands, launching several refreshed and all-new models under their brands. In association
with KTM and Kawasaki, it could introduce stylish and performance- oriented products.
VISION AND MISSION STATEMENT
VISION: “To attain World Class Excellency by demonstrating Value added Products to customers”
MISSION: “Focus on value based manufacturing Continual Improvement Total elimination of wastes
Pollution free & safe environment.

4. Competitive Structure of the Industry
Porter’s Five Forces Analysis
Entry barriers are high
 The market runs on high economies of scale.
 The need for technical expertise is high.
 Owning a strong distribution network is important and is very costly.
Supplier Bargaining Power
 Suppliers of auto components are fragmented and are extremely critical for this industry since
most of the component work is outsourced.
 Proper supply chain management is a costly yet critical need.
Buyer's Bargaining Power
 Buyers in automobile market have more choice to choose from and the increasing competition is
driving the bargaining power of customers uphill.
 With more models to choose from in almost all categories, the market forces have empowered
the buyers to a large extent.
Industry Rivalry
 The industry rivalry is extremely high with any product being matched in a few months by
competitor. This instinct of the industry is primarily driven by the technical capabilities acquired
over years of gestation under the technical collaboration with international players.
Substitutes
 There is no perfect substitute to this industry. Also, if there is any substitute to a two-wheeler,
Bajaj has presence in it. Cars, which again are a mode of transport, do never directly compete or
come in consideration while selecting a two-wheeler, cycles do never even compete with the low
entry level moped for even this choice comes at a comparatively higher economic potential.
Summarizing the industry analysis, it can be said that the two-wheeler market is attractive as it scores
well on three out of five categories.

5. Competitive Structure of the Bajaj Auto Limited
SWOT ANALYSIS
Strengths
1. Highly experienced management.
2. Product design and development capabilities.
3. Extensive R & D focus.
4. Widespread distribution network.
5. High performance products across all categories.
6. Great financial support network (For financing the automobile)
7. High economies of scale.
Weaknesses
1. Hasn't employed the excess cash for long.
2. Still has no established brand to match Hero Honda's Splendor in commuter segment.
3. Not a global player in spite of huge volumes.
Threats
1. The competition catches-up any new innovation in no time.
2. Threat of cheap imported motorcycles from China.
3. Margins getting squeezed from both the directions (Price as well as Cost)
4. TATA Ace is a serious competition for the three-wheeler cargo segment.
5. Entry of international brands
6. Other motorcycle players have a strong brand presence
7. Changes in prices of second-hand cars:
8. Implementation of mass transport system:
Opportunities
1. Untapped market above 180 cc in motorcycles.
2. More maturity and movement towards higher-end motorcycles.
3. The growing gearless trendy scooters and scooterette market.

6. 4. Growing world demand for entry-level motorcycles especially in emerging markets.
5. Bajaj Auto says its $2,500 car, which it is building with Renault and Nissan Motor, will aim at a
fuel-efficiency of 30 km per litre.
6. Cheaper variants for tapping more in the rural segment.
7. Premium sports bikes for urban areas
8. Constant growth in the two-wheeler segment.
9. Improvement in disposable income
17.2
21.3 20.2
20 19.1
7.1
14.4
15.3 15.2
25
20
15
10
5
0
250
200
150
100
50
0
1 2 3 4 5
Thousand Mil.
Financial Figures BAL -Motorcycles
Net Sales (mn) Op. Margin (%) Net Profit ( %)
833026
847379
876127
479634
538291
513251
260762
253926
303088
263876
353392
480057
515155
447674
186912
226131
202979
312176
0 100000 200000 300000 400000 500000 600000 700000 800000 900000 1000000
FY 2014
FY 2013
FY 2012
FY 2014
FY 2013
FY 2012
FY 2014
FY 2013
FY 2012
SALES EXPORTS
TOTAL SALES
DOMESTIC
BAL Three Wheeler Sales - BAL and Industry
BAL Sales Industry Sales

7. Competitiveness and Position of Major Rivals
EFE (External Factor Evaluation Matrix)
Opportunities Weight Rating Weighted
Score
1. The growing gearless trendy scooters and scooter market. 0.06 2 0.12
2.Can use the existing R&D capabilities for new models 0.07 2 0.14
3.Can invest and grow the life style segments 0.04 1 0.04
4. Double-digit growth in two-wheeler market. 0.08 4 0.32
5.Untapped market above 180 cc in motorcycles 0.05 3 0.15
6. Cheaper variants for tapping more in the rural segment 0.07 3 0.21
7. Premium sports bike in urban areas 0.08 3 0.24
8.Improvement in disposable income 0.1 4 0.4
Threat
1. The competition catches-up any new innovation in no time. 0.05 1 0.04
2.Threat of cheap imported motorcycles from China 0.07 3 0.21
3.Margins getting squeezed from both the directions (Price and
0.05 2 0.1
Cost)
4.TATA Ace is a competitor for the three-wheeler cargo segment 0.06 2 0.12
5.Entry of international brands 0.05 3 0.18
6.Other motorcycle players have a strong brand presence 0.09 4 0.36
7. Changes in prices of second-hand cars 0.04 2 0.08
8.Implementation of mass transport system 0.04 2 0.08
Total 1 2.79
The total weighted score of Bajaj Auto Ltd is 2.79 which are above the average midpoint of 2.5, so this
company is doing well, taking the advantages of external opportunities and avoiding the threat facing the
firms. There is definitely room for improvement, though, because the highest total weighted score would
be 4. This business need to capitalize more on innovation by using the R&D that the firm has.

8. Rivalry among assemblers in the automotive industry, once contained within national boundaries, has
evolved into global competition. First movers established market dominance in the early 1900s, and
their brands are still the most recognized by consumers today. The fact that auto producers choose
market strategies based on what their rivals are doing indicates that this is an oligopolistic industry.
Players in the Industry
 Hero MotoCorp Ltd
Hero MotoCorp Ltd was incorporated as Hero Honda Motors Ltd on January 19, 1984. The
company was formed as a JV between Hero Group and Honda Motor Company (HMC) of Japan.
However, both parties agreed to end the JV with HMC exiting from the company by selling their
entire stake to Hero group.
Hero retains its leadership position with a 42.9 per cent market share in 2012-13 in the Indian
two-wheelers industry. It operates across key segments, has a wide portfolio and a widespread
distribution network. Hero also leads the motorcycles segment with a domestic market share of
53.2 per cent in 2012-13 on account of its dominant position in the executive category. The key
brands driving volumes for the company included Super Splendor and Passion Plus in the
executive segment.
 Honda Motorcycle and Scooters India
Honda Motorcycles and Scooters India (HMSI), established in 1999, is a wholly owned
subsidiary of Honda Motor Company, Japan. The company manufactures motorcycles and
scooters in India. HMSI is the market leader in the scooters segment which enabled it to improve
its market share in domestic two-wheeler market from 13.7 per cent in 2008-09 to 18.9 per cent
in 2012-13.
As of 2012-13, HMSI is the second largest two-wheeler company in India, which overtook the
homegrown rival Bajaj Auto and pushed it to the third position. HMSI registered a phenomenal
growth of 31 per cent for FY 2012-13 (y-o-y) against the subdued two-wheeler industry growth
of 2.8 per cent during the same period.

9. HMSI continues to dominate the scooters market, with 49 per cent market share, but lost around
9 per cent share in last 5 years. Also, HMSI registered a stout growth of 53.8 per cent in the
motorcycle segment which was fuelled by its newly launched model Dream Yuga.
 Mahindra Two-Wheelers Pvt. Ltd
Mahindra & Mahindra (M&M) forayed into the two-wheeler industry in July 2008 by
acquiring Kinetic Motor Co Ltd (KMCL) for Rs. 1.1 billion. M&M also offered KMCL a 20 per
cent stake in the new entity, Mahindra Two-wheelers Pvt. Ltd (MTL). Currently, M&M
holds an 83 per cent stake in the company.
MTL's total domestic sales dropped by 22 per cent y-o-y to 104,884 units in 2012-13, owing to
sluggish automobile market. However, from 2009-10 to 2012-13, domestic sales increased by
14.4 per cent. MTL exports its products to Nepal, Sri Lanka, Bangladesh, Kenya and Cuba. It is
also planning to start exports to Columbia, Uganda, Nigeria, Tanzania, Brazil and Nicaragua.
 Suzuki Motorcycle India Pvt. Ltd
Suzuki Motorcycles India Pvt. Ltd (SMIPL) is a subsidiary of Suzuki Motor Corporation,
Japan. SMIPL marks Suzuki's re-entry into the Indian two-wheeler market after it served ties
with partner TVS in 2000-01.
SMIPL's share in the domestic scooters market rose sharply to 11.2 per cent as of 2012-13
from 2.3 per cent in 2007-08. However, the company's share in the Indian two-wheeler industry
has only increased only marginally to 2.5 per cent from 1.2 per cent in the same period, as
penetration of motorcycle models remains low.
 TVS Motor Company
TVS Motor Co Ltd was incorporated in 1982 as TVS Suzuki, a JV between the TVS Group and
Suzuki Motors of Japan. It was the first Indo-Japanese motorcycle venture in India. TVS started
manufacturing mopeds in the early 1980's and Suzuki 100 cc motorcycles in 1984. In April 2013,
TVS signed a long-term co-operation agreement with BMW Motors with a plan to develop and
produce a new series of motorcycles that will cater to the segment above 500 cc.

10. TVS continued to remain at fourth position in the Indian two-wheeler industry in 2012-13, after
slipping down from third position in 2011-12. The company has been losing market share in the
motorcycles as well as scooters segments mainly to Honda Motorcycles and Scooters India Ltd
(HMSI). Over the last 5 years (2008-09 to 2012-13), the domestic market share of TVS fell from
15 per cent to around 13 per cent. This decline in market share was the result of a lackluster
performance in the high-volume domestic motorcycles segment
 India Yamaha Motors Pvt. Ltd
Japanese two-wheeler manufacturer Yamaha Motor Co (YMC) was one of the first global
players to set up a manufacturing base in India. In 2008, Mitsui & Co Ltd entered into an
agreement with YMC to become a joint investor. Subsequently, the company's name
was changed to India Yamaha Motor Pvt. Ltd (IYM).
The launch of premium motorcycle models helped IYM marginally gain market share in the
domestic motorcycles market (to 3 per cent in 2012-13 from 1.8 per cent in 2007-08).
However, IYM continues to lose share to established players like Hero MotoCorp, HMSI and
Bajaj Auto. This is due to the lack of strong dealership network and weak product mix in the
economy and executive segments.

11. COMPETITIVE ADVANTAGE OF THE FIRM
The core competency of Bajaj Auto Ltd is its technology and innovation. Both DTS-i
(Digital Twin Spark Ignition) and DTS-Fi (Digital Twin Spark Fuel Ignition) are
technological breakthroughs by Bajaj. BAL is also a pioneer in product innovation
having introduced technologies such as ExhausTEC (Exhaust Torque Expansion
Chamber), LED Tail Lamps, LCD Display, SNS, Spare parts (Tubeless tyres, rear disc
brakes), Black colour scheme etc
Bajaj Auto maintained its excellent growth in exports, and continued to be India’s largest
exporter of two and three-wheelers.
Managerial Style:
Off late Bajaj Auto Limited, India’s premier automotive company has emphasized a lot
on organizational restructuring for the Auto business. With this restructuring,
the existing business roles and responsibilities at the company has beenstrengthened and
enhance to ensure greater operational empowerment and effective management.
The five pillars of this new structure (Strategic units) are R&D, Engineering, Two
Wheeler Business Unit, and Commercial Vehicles Business Unit & International
Business Unit. These pillars will be supported by functions of Finance, MIS, HR,
Business Development and Commercial.
FINANCIAL OF THE COMPANY WITH THEIR COMPETITORS
COST COMPARISON
BAJAJ AUTO’S MAJOR COSTS
In crore
Particular 2013 2012
Sales 20,617.87 19,827.03
Total revenue 20,792.74 20,137.02
Expenses:
Cost of raw material and components 13,523.74 1 3 , 4 4 5 . 5 4

12. consumed
Purchases of traded goods 858.83 751.15
Finance costs 0 . 5 4 2 2 . 2 4
COMPETITOR’S COSTS
HERO MOTOCORP
In crore
Particulars 2013 2012
Gross sales of products 25,474.54 25,024.04
Expenses
Cost of materials
17,364.86 17,365.41
consumed
Finance costs 11.91 2 1 . 3 0
HONDA
In Crore
Particulars 2013 2012
Income 515.55 540.28
Expenditure:
Raw material 360.94 317.12
Power and fuel 7.21 5.67

13. Selling and distribution costs:
TVS Motors has the highest proportion of S&D expenses. Over the past five years, the
S&D expenses of Hero MotoCorp grew by around 17 per cent followed by TVS
Motors at 14 per cent. However, Bajaj Auto's S&D expenses declined marginally due to
the company's tight control over distribution costs.
Player-wise selling and distribution expenses as percentage of revenue

14. Market Share for Two wheelers
Market Share for Three wheelers

16. IFE MATRIX
Strengths
Weight Rating Weighted
Score
1. Highly experienced management. 0.09 2 0.18
2. Product design and development
capabilities. 0.12 3 0.36
3. Extensive R & D focus.
0.1 4 0.4
4. Widespread distribution network.
0.09 3 0.27
5. High performance products across all
categories. 0.1 2 0.2
6. Great financial support network (For
financing the automobile) 0.09 2 0.18
7. High economies of scale.
0.09 2 0.18
Weaknesses
1. Hasn't employed the excess cash for
long.
0.1 2 0.2
2. Still has no established brand to match
Hero Honda's Splendor in commuter
segment. 0.12 3 0.36
3. Not a global player in spite of huge
volumes 0.1 2 0.2
TOTAL 1 2.53

17. SWOT MATRIX Strengths weaknesses
Strengths weaknesses
1. Highly experienced management. 1. Hasn't employed the excess cash for long.
2. Product design and development capabilities.
2. Still has no established brand to match Hero
Honda's Splendor in commuter segment.
3. Extensive R & D focus. 3. Not a global player in spite of huge volumes.
4. Widespread distribution network.
4. Lack of performance bikes like major
international brands and sports bikes & cruisers
5. High performance products across all categories.
6. Great financial support network (For financing the automobile)
7. High economies of scale
Opportunities SO Strategies WO Strategies
1. Untapped market above 180 cc in motorcycles. 1.Product development 1.Use cash to bring in new bikes
2. More maturity and movement towards higher-end
motorcycles. 2. Low cost because of economies of scale 2.Increased Installed Capacity
3. The growing gearless trendy scooters and scooterette
market. 3.Market penetration
4. Growing world demand for entry-level motorcycles
especially in emerging markets. 4. build brand and move into the 4 wheeler segment
5. Bajaj Auto says its $2,500 car, which it is building
with Renault and Nissan Motor, will aim at a fuel-efficiency
of 30 km per litre.
6. Cheaper variants for tapping more in the rural
segment.
7. Premium sports bikes for urban areas
8. Constant growth in the two-wheeler segment.
9. Improvement in disposable income
Threats ST Strategies WT Strategies
1. The competition catches-up any new innovation in no
time. 1.Invest in r&d to keep up with competitors and constantle innovate1.Advertise more and build customer relationship to promote brand
2. Threat of cheap imported motorcycles from China. 2. economies of scale will help in reducing cost
3. Margins getting squeezed from both the directions
(Price as well as Cost)
4. TATA Ace is a serious competition for the three-wheeler
cargo segment.
5. Entry of international brands
6. Other motorcycle players have a strong brand
presence
7. Changes in prices of second-hand cars:

18. BCG Matrix
Product
Portfolio
Sales
(in
number)
Relative
Market
Share
Industry
Growth
Rate
Quadrants
Motorcycles 3422403 51.9% 11% Stars
Three
447647 73.8% 17% Stars
wheeler
Implication:
Stars represent the organization’s long run opportunities for growth and profitability.
Substantial investment is need to maintain or strengthen their dominant position.
Forward, backward and horizontal integration, market penetration, market development
and product development are appropriate strategies.
Business Model
Diversified business model – Bajaj Auto has a dominant position in the 125+cc
premium motorcycle category (high-margin segment) and in passenger three wheelers.
Also the company Exports to countries like Africa, Middle East, & Latin America which
enables the company to maintain superior margins & highest profitability compared to
the industry peers. Overall the company has healthy regional mix & product mix that
drive overall volumes & help it to sustain margins.
Diversification is a corporate strategy to enter into a new market or industry which the
business is not currently in, whilst also creating a new product for that new market. This
is a risky section, as the business has no experience in the new market and does not know
if the product is going to be successful.
The notion of diversification depends on the subjective interpretation of “new” market
and “new” product, which should reflect the perceptions of customers rather than

19. managers. Indeed, products tend to create or stimulate new markets; new markets
promote product innovation.
Product diversification involves addition of new products to existing products either
being manufactured or being marketed. Expansion of the existing product line with
related products is one such method adopted by many businesses. Adding tooth brushes
to tooth paste or tooth powders or mouthwash under the same brand or under different
brands aimed at different segments is one way of diversification. These are either brand
extensions or product extensions to increase the volume of sales and the number of
customers
Product Portfolio
Marketing History:
Bajaj entrusted the responsibility of communicating the brand value of Pulsar through
media campaigns through Ogilvy & Mather, who came out with the brilliant ad of
“DEFINITELY MALE”. Pulsar was initially targeted to 18-24 age groups. The youth
wanted powerful, stylish bikes, which would suit their pockets and give them good
mileage. The higher powered bikes in the market e.g. RE, CBZ were too pricey, high on
maintenance or low on mileage. What O&M needed to do was to attract attention of the

20. youth, more so since the target market for the product was very niche. And the punch line
“DEFINITELY MALE” did fire the youth’s imagination. It was very novel of O&M to
come up with the idea of associating a motorbike with Gender.
 Pulsar got positioned as the He- Bike of India. The product was unquestionably a
success and Bajaj started increasing the breadth of its target market.
 Bajaj constantly kept working on upgrading the product and came up with DTSI
(Digital Twin Spark Ignition) version of the Bike in the year 2005. The new
technology helped the bike to give better mileage.
 The mega-successful “DEFINITELY MALE” slogan was given away with. This,
though it communicated the introduction of the new technology to the consumers,
missed the trick in positioning it as the classic HE-BIKE.
 However Pulsar had been so well established as a Product and its pricing and
distribution were so strong that even indifferent promotional campaigns could
hardly make too much of a difference to sales figures.
 In continuation of Bajaj’s strategy to come up with better products, the upgraded
version of pulsar was launched in 2007 with digital console display and LED
taillights, which were a novelty in the Indian market.
 Subsequently Bajaj came up with newer variants of Pulsar 200cc & 220 cc. The
200cc bike had a lot of innovations like oil cooled engine, twin rails etc. The bike
was launched with a “FREE BIKING” campaign shot in Cuba by O&M.

21. Customer centric approach:
 Dealership And Service Network:
Bajaj Auto has an extensive network of about 485 dealers and 1500 service
centers around the country. Lately it has been concentrating on the rural front
which has largely been an untapped, growing market in terms of performance
segment bikes. Bajaj has identified a segment of customers 'Probikers', who are
knowledgeable, appreciative of contemporary technology, they are trendsetters and
very choosy about what they ride. Hence, Probikers need to be addressed in a
meaningful way that goes beyond the product. Bajaj Auto is in the process of
expanding it’s chain of retail stores across the country exclusively for high-end,
performance bikes. These stores are called "Bajaj Probiking".
 Customer Retention:
Lifecycle of bike is relatively large (compared to other products like grocery
items, clothes, etc.) and it is not that sort of product that people will buy twice a
year or even once every year. So customer retention is not limited to the act of
customers coming back to buy the same product again and again. Here, it takes a
broad meaning and encompasses customer satisfaction with its usage; service by
the vendors and service centres; and as a result customers who have already bought
the product recommending the same to other prospective customers, users forming
clubs to support the brand and also helping in testing etc of any new launches. We
must say Bajaj has done extremely well in this area also. Sales of Bajaj Bikes as
well as its popularity have been leading those of other bikes. Also in cities like
Pune there are bikers clubs, which owe serious allegiance to the brand Bajaj. This
all is testimony to the successful customer retention for Pulsar by the Bajaj Auto. It
needs to be seen how this new initiative does in achieving goals of customer
retention.

22. Marketing management is often described as the art and science of choosing target
markets and getting, keeping and growing customers through creating, delivering,
and communicating superior customer value. While “DEALERSHIP AND
SERVICE NETWORK” is focusing on getting and growing customers,
“CUSTOMER RETENTION” focuses on keeping customers through superior
customer value.
Identifying Customer Groups and Market Segment
Bajaj has positioned its bikes in the “high style and high Price” segment along with Hero
Honda Karizma, CBZ and Royal Enfield Bullet. It also has positioned CT 100 in the “low
style- low price” segment along with Hero Honda Splendor, TVS star City.
Bajaj Auto Products
Motorcycles
Segment of Bikes Features BAL Product Competitors
Entry Segment 100 cc Motorcylces at Rs
45,000
Platina- The
Segment accounted
for 34% in India
Hero Honda
Passion Plus
Executive Segment  100cc to 135cc
motorcycles, priced
between Rs 45,000- Rs
60,000
XCD and Discover Hero Honda
CBZ extreme &
Splendor
Performance Segment  Sleek, High
performance with price
Flagship brand-
Pulsar, Cruiser and
Hero Honda
Karizma &

23. in excess of Rs 80,000 Avenger Dominate
this space with
domestic market
share in excess of
47%
Hunk
Cars
 Bajaj Lite concept
 Bajaj RE60 - the Tata Nano competitor.
Discontinued Products
Bajaj Chetak Kawasaki Eliminator EL-175 Bajaj Discover 110 CC
Bajaj Cub Bajaj Kawasaki Wind 125 Bajaj Discover DTS-I 125 cc
Bajaj Super Bajaj Kawasaki 4s Champion Bajaj Pulsar 200 DTSi
Bajaj Saffire Bajaj Kawasaki KB RTZ Bajaj CT 100
Bajaj Wave Bajaj Boxer
Bajaj M80, M50 Bajaj Caliber
Bajaj Legend Bajaj Wind

24. Commercial Vehicles - Three-Wheelers
Bajaj Auto is the world’s largest three-wheeler manufacturer. The domestic
industry as a whole, comprising four major participants and countless small local
players, saw domestic sales for three-wheelers in FY2014 falling by 10.9% over
the previous year — thanks to an unstable political environment across many states
and a marked reluctance of road transport authorities to issue fresh permits
It also maintained its dominance of the small diesel market with a market share of
68%. Moreover, Bajaj Auto’s market share in the large diesel segment increased
from 12% in FY2013 to 16% in FY2014. The Company launched a number of new
product variants focusing on best mileage, lowest maintenance, competitive
pricing.
These were:
 The RE Compact in petrol, CNG, LPG and diesel options, for the small vehicle
markets.
 The RE Optima in CNG, LPG and diesel options, pitched for the large as well as
small vehicle markets.
 The RE Maxima in diesel, for the large vehicle markets.
R&D: New Products
1. Pulsar 200 NS After the successful launch of Pulsar 200 NS in May 2012, this
model has been well received in markets like Colombia. In FY2014, it was
launched in Indonesia under the joint brand of Kawasaki Bajaj. The bike has
been well received. New colour, decals and graphics have been introduced on
the 200 NS to make look even more exciting.

25. 2. KTM Duke 390 with ABS The joint venture between KTM and Bajaj Auto
saw yet another successful launch in the form of the KTM Duke 390. With its
trademark orange frame and alloy wheels typical to KTM, the bike lives upto
the ‘Ready to Race’ tag of the KTM brand. It is selling very well in export
markets as well as in India.
Subsidiaries
1. PT. Bajaj Auto Indonesia (PT BAI)
2. Bajaj Auto International Holdings BV, Netherlands (BAIH BV)
3. Signing of anti-corruption Initiative of World Economic Forum (WEF)

26. Corporate
Level
Divisional
Level
Business Level Product Level Brand Level
BAJAJ
Bajaj Auto
Ltd
Two Wheeler
 100cc
 180cc
 200cc
 220cc
Bajaj Pulsar
Bajaj XCD
Bajaj Discover
Bajaj Avenger
Commercial Vehicles
 Petrol Engine
 Gaseous Engine
 Diesel Engine
Bajaj RE
1. Bajaj Auto
International
Holdings BV
(BAIH BV)
2. International
Business
 Sri-lanka
 Bangladesh
 Columbia
 Central America
 Egypt
 Indonesia
 Motor-cycles
 Three-Wheelers
KTM Duke
Kawasaki Ninja

27. Branding:
The new visual identity of Bajaj Auto emanated from the confirmation of core values,
which Bajaj identified as its brand values. The brand essence for the new Bajaj was
defiened as ‘Excitement’ which Bajaj promises to live its essence through a set of Brand
values of Learning, Innovation, Perfection, speed and Transparency.
The change in identity was part of the ongoing changes. Bajaj had transformed its
facilities to state of the art manufacturing, infrastructure, with an enviable distribution
and service network, had created a benchmark R&D facility and at a time when the
customer had changed in terms of its exposure to quality and style.
Advertising Strategy
Bajaj is always known for its outstanding ads over the period of time. Since its inception,
Bajaj has come out with variety of ads and were always successful in their
advertisements. Bajaj is always known for its ads without well-known brand ambassadors
which is again a plus point to its cart as it saves a huge cost in terms of brand
ambassadors unlike Hero Honda and TVS. Prior, Bajaj used to convey the feeling of
‘Indianness’ in its ads. With a punch line ‘Hamara Bajaj’ Bajaj drove into everybody’s
hearts.
A couple of years back, Bajaj introduced an advertisement which promoted all the
different ranges it had, wherein they showed each product they had with a feeling of
Indianness. Such ads revealing Indian culture had a great effect on Indians and Bajaj was
successful in most of its ads. Bajaj changed its brand logo along with its punch line i.e.
‘Hamara Bajaj’ which got converted to ‘Inspiring Confidence’ and later to ‘Distinctly
Ahead’. The reason for these changes as told by the company officials was to keep pace
with the new technologies in the fast moving world. Even though it had changed its
punch line, it didn’t have much effect on its brand image. A year back, Bajaj introduced
DTSi technology upgrading its successful PULSAR 180cc and 200cc. Though Bajaj had
changed its identity it still dominates for its creativity in ads.

28. Value Chain of Bajaj Auto
Bajaj selects those suppliers who provide majority of the required raw materials together.
Bajaj Auto has 198 key suppliers for their raw materials. A large number of suppliers are
located near Pune & Aurangabad. To improve quality, Bajaj Auto has also begun actively
assisting its suppliers in finalizing joint ventures with counterparts in Japan, Italy, Taiwan
and Spain.
Suppliers Materials
JBM Frames
MRF & Dunlop Tires
Minda Locks & Ignition Systems
Reinder Headlamps and Lights
Endurance Brakes, Clutch and Cast vehicles
Varroc Digital Meter & Plastic Parts
Max Auto Components Ignition System and Switches
Silico Cable Wires and Cables
Makino Industry Brake Shoes, Brake Lining & clutch
Center

29. Future Plans
1. Company to soon launch its new Discover 150cc, and is confident of regaining the
lost volumes with the launch of a new product
2. Exports
Bajaj Auto's rising exposure to exports may drive its earnings growth, and hence
neutralise the impact of its declining domestic volumes, they reckon. But earnings
growth supported by growing export sales won't be enough to fetch a higher price to
earnings multiple as it has been observed that markets always attach more importance
to a higher domestic sales growth.
The global market size for two-wheelers is around 31 million, of which around 90
per cent is contributed by vehicles with engine capacity of less than 200cc an area
that is Bajaj Auto's forte. In the last five years, the Indian two-and three-wheeler
industry has become internationally competitive in terms of the variety, quality and
fuel efficiency of its products, inherent cost advantages and a keen understanding
of consumer preferences. Going forward, Bajaj Auto will continue to utilise these
competitive strengths to increase their global presence. We believe that a focus on
exports would not only keep their toes in areas of technology and design, but
would also be a step towards de-risking the vagaries of the domestic market
3. BAJAJ Rural Approach
The country's second largest two-wheeler maker has appointed 135 dealers in
small towns and mini metros, where it had only 25 dealers, and will offer special finance
scheme for rural customers even if they have no bank account. Bajaj Auto is going at full
throttle to challenge market leader Hero Honda in rural and semi-urban markets that
account for more than half of two-wheelers sold in the country.

30. Company has been conducting a lot of market research in Rural Sectors and found
that the rural customers are seeking for bikes with wider tyres that gives more road
grip, which essentially requires higher engine power
4. Bajaj RE60
The RE60 is the result of several years of work by the company, which has an
agreement to make a small car for the Renault-Nissan Alliance.Bajaj is aiming for drivers
of rickshaws, which are powered by motorcycle engines and operate as short-distance
taxis in India. The RE60 offers features not found on current rickshaw models, including
seat belts, doors and a hard top. It will have windows, although ones that fold out rather
than roll down.
5. Bajaj Auto to Launch Pulsar Super Sport
A new Pulsar will be launched in the next six months. The bike christened as the
Super Sport Pulsar was showcased at the 2014 Auto Expo.A motorcycle fairing is a shell
placed over the frame of some motorcycles, especially racing motorcycles and sport
bikes. The fairing is not just for aesthetics and its primary purpose to reduce air drag. The
fairing improves aerodynamics of the bike and provides stability at high speeds.

31. Financial Projections
In crore
Year 2015 2016 2017
Net Sales 22,385.00 24,176.00 26,110.00
EXPENDITURE
Consumption of Raw
14,226.00 14,652.00 15,091.00
Materials
Stores and tools 127 128 129
Employee cost 798 893 991
Factory and administrative
700 770 850
expenses
Sales and after sales
expenses
842 926 1018
Total Expenses 16,693.00 17,369.00 18,079.00
EBITDA 5,692.00 6,807.00 8,031.00
Interest 1 1 1
Depreciation and
201 225 252
amortization
PBT 5,490.00 6,581.00 7,778.00
Tax 1592.1 1908.49 2255.62
PAT 3,897.90 4,672.51 5,522.38
Assumption
1.sales to be increased by
8%
2. Raw material cost to increased by 3%
3. Tax rate is 29%