The automotive industry in India accounts for 7.1% of India's GDP and 45% of manufacturing GDP. Two-wheelers contribute the most at 8.9% followed by three-wheelers at 10.8%. Hindustan Motors and Bajaj Auto were once leaders in the Indian automobile market but lost their dominance due to failures to innovate and adapt their products and strategies to changing customer demands and market conditions. Both companies neglected technological advancements, product quality issues, and an inability to segment their offerings resulting in customers moving to competitors that provided better value.

1. BAJAJ AUTO&
HINDUSTAN
MOTORS

2. • The automotive industry in India is one of the largest
automotive markets in the world.
• The automobile industry accounts for 7.1 per cent of
the country's gross domestic product (GDP).
• In four wheeler category cars is the major segment in
Indian automotive industry.
• The automotive industry accounts for 45% of the
country's manufacturing gross domestic product
(GDP)and employs about 19 Million people both
directly and indirectly.

8. VEHICLE CATEGORY PERCENTAGE
CONTRIBUTED
Two wheelers 8.9%
Three wheelers 10.80%
Passengers carriers 12.16%
Goods carriers 5.27%
Utility vehicles 5.30%
Passenger vehicles 3.9%

9. Growing
demand
Rising income
young population
Availability of
credit and
financing option
Strong growth in
exports
Policy
support
Goal of
establishing India
as an automobile
hub
Focus on R&D
department
Policy sops, FDI
encouragements
Increasing
investment
Rising investment
of domestic and
foreign players
Greater product
innovation, market
segmentation
Demand projected
to remain strong,
making returns
attractive

12. • General Motors plans to invest US$1 billion in India by
2020.
• US-based car maker Chrysler has planned to invest Rs
3,500 crore (US$ 525.5 million)
• Mercedes Benz has decided to manufacture the GLA
entry SUV in India.
• Electric vehicles are most waited investment in India
in up coming months
• Total electric vehicles sales would amount to 6-7
Million units by 2020.

13. Hindustan Motors is an Indian (auto) manufacturer
established by Mr. B. M. Birla in 1942.
The company was the largest car manufacturer in India
before the rise of Maruti udyog.
Hindustan Motors was the producer of the Ambassador
which was once a mainstream car in India.
Moreover first made by Morris Motor Limited at Cowley,
Oxford in the United Kingdom from 1956 to 1959.

14. • Bajaj Auto Limited is an Indian two-wheeler and
three-wheeler manufacturing company. Bajaj Auto is
a part of the Bajaj Group. It was founded by Jamnalal
Bajaj in Rajasthan in the 1930s.
• Bajaj Auto is the world's sixth-largest manufacturer of
motorcycles and the fourth-largest in India. It is the
world’s largest three-wheeler manufacturer.

15. • COMPETITION:
 New players venturing into Indian automobile market due to
globalization.
 Maruti Udyog, General Motors, Honda penetrated into the
market.
• INTERNAL MANAGEMENT:
 Internal environment of the organization was not feasible.
 Huge conflict between management and workers.
 Shortage of funds and large accumulation of liabilities.

16. • CONSUMER BEHAVIOR:
 Preferences and perceptions of consumers changed over time.
 High maintenance, and low fuel efficiency reduced interest
among customers.
 Customers did not find any value for money in ambassadors
after introduction of Maruti 800cc model.
• TECHNOLOGY AND INNOVATION:
 Spending on R&D projects by Hindustan motors were very low.
 No upgradation and updation in technology used by the
company.
• OTHER FACTORS:
 No joint venture with foreign automobile companies.
 Highly depended on government policies.

17. • Liberalization in Indian economy after 1990’s
• Many foreign players entered into the market with strong
competition.
• Not able to co-up with Structural changes happening two
wheeler industry customer were shifting to motor cycles.
• Bajaj continued to invest time and resources in the geared
scooter segment even till the early 2000s when the sales of
geared scooters were negligible as compared to the gearless
scooters.

18. • Technology and innovation
• Bajaj never seriously looked at customer perception and their
changing demands over the time .
• Bajaj were still manufacturing product with same feature , style
no upgradition in model and technology which was a bad sign.
• Scooter were getting out from the market day by day
• Product issue-
• Moreover a great issue was Bajaj super had serious problems
like starting trouble and riding comfort which was neglected by
the company.

19. Customer is king : make the king happy
• Hindustan motors & Bajaj can still be the leader in the
automobile market with their products if they change their
products according to changing demand of the customers
what exactly customers need.
Product is everything:
• Customer always purchase product where they find value
for proposition
• Ambassador and Bajaj failure was just because of the
their product which was not giving value for money
whereas marketing and sales approach comes after
product.

20. Market sensitivity:
In automobile sector consumer feels the fact that today’s
new is tomorrow’s old so Bajaj and Hindustan motors could
have understand the point have to come up with new product
to keep them in market
• As scoter was becoming out of fashion and motor cycle
was becoming the choice of the customers but Bajaj was
ignoring this evolution in two wheeler segment.
• Same was with ambassador, Hindustan motors was still
stuck with their same product and policies and didn’t
change with changing aspects of market.

21. Technology and advancement :
• change is the law of nature
• Hindustan motors and Bajaj can be the leader of the
market if they have upgraded or they would have came
with new features style and looks in their existing
product.
Right approach to market mix :
• Product- what to produce how to produce
• Place -where to produce and where to sell
• Price -what should be the price of the product
• Promotion- what kind of promotional and advertising
strategies company have to adopt.