Professional Documents
Culture Documents
PEST analysis:
Political:
1) At present 100% foreign direct investment is permissible under automatic route in this sector including passenger car segment. 2) The import of technology/technological upgradation on the royalty payment of 5% without any duration limit and lump sum payment of USD 2 million is also allowed under automatic route in this sector. 3) Automatic approval for foreign equity investment upto 100% of manufacture of automobiles and components is permitted. 4) The automobile industry is delicensed. 5) Import of components is freely allowed. 6) In order to enforce compliance and energy conservation act, the government has recently given its nod to fuel mileage standards and labeling for new cars. 7) SIAM is working on a voluntary recall policy that is in favour of auto manufacturers. On a similar note, government is in the process of constituting a national automotive board which would become a formal setup to look into the issue of recall of vehicles and hence improve manufacturing standards.
8) No special tax on diesel cars. 9) General excise duty for automobiles has been hiked by 2% from 10% to 12% which will increase prices of small cars, two wheelers, etc.
Economical:
1) Inflation always has a negative impact on the industry. The industry comes to a standstill when there is an inflation in the market. The sales decrease because of the rise in prices of the vehicles. The prices of the vehicles have to be increased to meet the increase in price of the raw materials required for manufacturing. 2) Higher interest rates have a negative impact on the industry. Higher interest rates means that it costs more for consumers to borrow money for auto loans. Therefore the demand decreases and hence the sales decrease. 3) Inflation and high interest rates also dampens the economic growth. 4) Therefore to obtain high economic growth and to increase the sales the inflation should be controlled and the interest rates should be kept low.
Social:
1) People across all age groups buy personal vehicles. 2) Rising per capita income, rising working population and middle class urbanization have all contributed to the growth of this industry. 3) People are more inclined towards buying personal vehicles to maintain their status quo. 4) People realize that during an emergency a personal vehicle will be more useful rather than relying on public modes of transport.
Technological:
1) Spending on R&D in India has increased over the last few years. 2) Cost advantage India offers makes more players likely to scale up R&D outsourcing to India 3) Role of IT is increasing in this industry. They are developing solutions for the automobile industry. 4) The increasing environmental pollution is a concern for manufacturers and all associated with the industry. Some of the initiatives to reduce emission include introduction of fuel efficient cars, electric and hybrid cars.
Vision
To attain World Class Excellency by demonstrating Value Added products to customers.
Mission Focus on value based manufacturing. Fostering team work & enhancing the capability of the team. Continual Improvement. Total Elimination of wastes. Pollution Free & Safe Environment.
Awards
Bajaj Auto was awarded the NDTV Profit Business Leadership Award 2010 at the hands of the Hon'ble Finance Minister Shri Pranab Mukherjee on 1st September 2010. Bajaj Auto - Bajaj Pulsar DTS-Fi won bike of the year in 2007 by CNBC-TV18 Autocar Auto Awards. Bajaj Platina 100 cc won bike of the year 2007 by NDTV Profit Bike India. Bajaj Auto - Chakan Plant won Super Platinum Award For manufacturing Excellence in 2006-07 by Frost and Sullivan.
Bajaj CT 100 bagged Motorcycle Total Customer Satisfaction Study in 2005 by TNS Automotive.
Product Portfolio
Two Wheelers
Entry Level
Mid Level
Peformance
Kristal DTSi
SWOT Analysis
Strengths SWOT Analysis Highly Experienced Management. Extensive focus on Research & Development. High Performance Products across all categories. Number one position in Exports. Great financial support network for financing the automobile. Strong Cash base but hasnt been invested efficiently. Distribution network is not as strong and extensive as Hero Moto Corp. Not a well established global brand inspite of huge volumes. Rising disposable income. Decline in interest rate for two wheeler financing. Shift from entry level motorbikes to performance oriented bikes. Its $2500 low emission car RE-60. Growing gearless trendy scooters market. Limitation of designs and technological. Foreign players coming in India.
Weakness
Opportunity
Threats
New Plans
Indian two wheeler giants, Bajaj Auto has planning a host of new launches in the Indian two wheeler industry during the coming 12 months to take on rivals like Honda Motorcycle and Scooter India. Bajaj recently lost its number two position in the Indian market to Honda and thus the company is aiming to launch 2 new Pulsar, and 6 new Discover variants during the next 12 months to increase the competition and regain their No 2 position in the country. The company is planning to expand its presence both in the Indian market as well as in foreign markets with the 8 new models planned. Bajaj is planning to launch its new Pulsar 375 motor bike this year in the Indian market to compete better with both domestic and global rivals in the country. The company is planning to launch two super sports motorcycles under its key brand Pulsar. These bikes will be faster than any other bikes in its segment at present in India. Bajaj is planning to launch a range of six new Discover bikes in next six months.
New Launches
1) Bajaj Auto Plans To Launch Super Sports Bikes In Next Few Months. These bikes will be faster than any other bikes in its segment. (July 23, 2013)
2) Bajaj launched Discover 125T at Rs. 52500. (July 13, 2013) 3) Bajaj & KTM launches 390 Duke at Rs. 1.8 Lakh. (June 25, 2013)
Conclusion
Bajaj auto faces stiff competition from the Market leader Honda and closest rival Hero. From the survey, it is seen that Bajaj is only able to somewhat satisfy their costumers from their products. They need to create a great sense of joy in their customers by offering unmatched product features and service that will make their customers loyal to the brand and this will greatly help Bajaj in increasing its market share. Bajajs product prices are in comparison with its leading competitors. The problem is that consumers do not think that Bajaj has that much value and hence prefer to buy other brands. Bajaj need to offer more competitive pricing and better promotions to sell their motor cycle better. The two wheeler industry though it is facing a slight downturn today, is still highly lucrative and is likely to provide immense future potential for Bajaj, as is evident from the forecasts for the industry.