Professional Documents
Culture Documents
CPP Report
TITLED
BAJAJ AUTO LIMITED
For fulfilling the requirement of the award of degree of BBA
Subject: CPP (IMS-206)
Under the supervision of
Dr. JK Chandel
Assistant professor
Submitted to: -
Submitted by:-
The Director
Mayank Bangar
MBA 5years 3rd sem.
Roll no. 33
Registration no. 12-UD-14
Institute of management studies
Kurukshetra University Kurukshetra
DECLARATION
I, MAYANK BANGAR hereby declare that I have completed the report entitled assigned to me by the Institute,
to be submitted in the partial fulfillment of the MBA 5 Year Degree from Kurukshetra University. Further, I
declared that this is original work done by me and the information provided in the study is authentic to the best
of my knowledge and belief.
Signature
(MAYANK)
ACKNOWLEDGEMENT
In this project, I have made an honest and dedicated attempt to make the Project Report so easy to understand
for a person who is willing to get knowledge about the ORIENTAL BANK OF COMMERCE.
I am deeply indebted to my esteemed teacher & our chairman Prof. M.K Jain, K.U.K., because he gave
me opportunity of making project report. I am also thankful to my lecturer as well as my supervisor (Guide)
Dr.J.K CHANDEL for their kind support & suggestion for making project report.
Signature
Mayank bangar
MBA 5yrs. 3rd sem.
Roll no. 33
CONTENT
CHAPTER NO
1
TITLE OF CHAPTER
AUTOMOBILE SECTOR
1.1 INTRODUCTION
1.2 PLAYERS IN SECTOR
PAGE NUMBER
5-7
5
6-7
8-30
8
8-10
10-11
12-13
2.2 HISTORY
14-18
18-19
19-20
2.5 PRODUCTS
21-24
24-25
2.6 AWARDS
26-30
11-12
31-40
31-33
34-35
35-37
37-40
41-42
41-42
42
42
43
44-46
CHAPTER 1
AUTOMOBILE INDUSTRY
1.1 INTRODUCTION
The automotive industry in India is one of the larger markets in the world. It had previously been one of the
fastest growing globally, but is currently experiencing flat or negative growth rates India's passenger car and
commercial vehicle manufacturing industry is the sixth largest in the world, with an annual production of more
than 3.9 million units in 2011. According to recent reports, India overtook Brazil and became the sixth largest
passenger vehicles produced in the world (beating such old and new auto makers as Belgium, United Kingdom,
Italy, Canada, Mexico, Russia, Spain, France, Brazil), grew 16 to 18 percent to sell around three million units in
the course of 2011 and 2012. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind
Japan, South Korea, and Thailand. In 2010, India beat Thailand to become Asia's third largest exporter of
passenger cars.
As of 2010, India is home to 40 million passenger vehicles. More than 3.7 million automotive vehicles were
produced in India in 2010 (an increase of 33.9%), making the country the second (after China) fastest growing
automobile market in the world in that year. According to the Society of Indian Automobile Manufacturers,
annual vehicle sales are projected to increase to 4 million by 2015, no longer 5 million as previously projected.
The majority of India's car manufacturing industry is based around three clusters in the south, west and north.
The southern cluster consisting of Chennai is the biggest with 35% of the revenue share. The western hub
near Mumbai and Pune contributes to 33% of the market and the northern cluster around the National capital
region contributes
32%.Chennai,
with
the
India
operations
of Ford, Hyundai, Renault, Mitsubishi, Nissan, BMW,Hindustan Motors, Daimler, Caparo, and PSA Peugeot
Citron is about to begin their operations by 2014. Chennai accounts for 60% of the country's automotive
exports.Gurgaon and Manesar in Haryana form the northern cluster where the country's largest car
manufacturer, Maruti Suzuki, is based. The Chakan corridor near Pune, Maharashtra is the western cluster with
companies
like General
and
Mahindra, Tata
Motors, Mercedes
Benz, Land Rover, Jaguar Cars, Fiat and Force Motorshaving assembly plants in the area. Nashik has a major
base
of
Mahindra
and
Mahindra
with
SUV
assembly
unit
and
an
Engine
assembly
unit. Aurangabad with Audi,Skoda and Volkswagen also forms part of the western cluster. Another emerging
cluster is in the state of Gujarat with manufacturing facility of General Motors in Halol and further planned
5
for Tata Nano at their plant in Sanand. Ford, Maruti Suzuki and Peugeot Citroenplants are also set to come up in
Gujarat.Kolkata with Hindustan Motors, Noida withHonda and Bangalore with Toyota are some of the other
automotive manufacturing regions around the country.
In 2011, there were 3,695 factories producing automotive parts in all of India. The average firm made US$6
million in annual revenue with profits close to US$400 thousand.
The two wheeler industry has been in the country since 1955. It generally consists of three segments Mopeds,
Motorcycles and Scooters. Two wheelers have played a pivotal role in the rising growth of the Indian
automobile industry. Over the years the domestics sales of two wheelers have grown by huge margins.The two
wheeler market has witnessed a sea change over the years. In the past Indians preferred scooters and mopeds
but with the rising income levels and standard of living there is a remarkable rise in the demand for motorcycles
which along with serving the purpose of a vehicle has become a style statement for the youth of the country.
1.2 Two wheeler manufacturers are:a) Hero Honda Motors Ltd: Hero Honda Motors Ltd is the result of a joint venture between India's Hero
group and the Japanese Honda Motors Company in the year 1983. The joint venture has only resulted in
making Hero Honda the world's largest two wheeler manufacturing company. Her Honda is a global
name and is commonly known for being the most fuel-efficient and the largest CBZ selling company in
India. During the 198's Hero Honda proved to the world that that it was possible to drive a two wheeler
without polluting the roads. The company possesses three manufacturing units in Dharuhera, Gurgaon
and Haridwar which are capable of producing 4.4 million units per year. It was this company that
introduced new generation motorcycles that set the industry benchmark for fuel efficient and low
emission two wheelers.Some of the important two wheelers manufactured by Hero Honda Motors Ltd
are CD-DAWN, SPLENDOR and PASSION.
b) Bajaj Auto: Bajaj Auto is the largest exporter of two and three wheelers in India. In collaboration with
Kawasaki Heavy Industries of Japan Bajaj Auto Ltd manufactures a wide range of two wheelers which
are the best in the industry. This company has introduced certain models like Pulsar, Discover DTSi and
Kawasaki Bajaj Eliminator which has given other two wheeler manufacturing companies a run for their
money.
c) TVS Motor Company: TVS Motor Company is the third largest two wheeler manufacturer in India and
among the top ten in the world. In its wide range of products TVS offers a two wheelers for everyone
right from mopeds to racing bikes. It has a range of products for women as well like the TVS Wego,
6
Scooty Streak, Scooty Pep+, ScootyTeenz and among its most famous road dominators are: TVS Apache
RTR 180. and TVS Flame DS 125
d) Majestic Auto Ltd: The Company began operations in the year 1975, having understood the
requirements of the Indian two wheeler market the company started off with manufacturing mopeds. The
company is synonymous for its mopeds under name of Hero Majestic. The company has a phenomenal
growth record since its very inception in the year 1973.
e) Kinetic: Kinetic is the name that is almost synonymous with scooters in India. They were the first to
introduce auto chokes, auto fuel cork, TLAD suspensions, and gearless two wheelers to the Indian
market which was an immediate hit with the Indian women. However the latest two wheelers introduced
by Kinetic are Kinetic 4S and Kinetic Luna TFR Plus.
f) Suzuki Bikes and Scooters: Suzuki motors first entered India in collaboration with TVS Motors.
Suzuki motors ruled the two wheeler market for quite a long time until competitors started flooding in.
Some of the most famous and stylish two wheelers by Suzuki are Suzuki Samurai, Suzuki Shogun and
Suzuki Max 100.
CHAPTER 2
BAJAJ AUTO LIMITED
2.1 INTRODUCTION
Bajaj Auto is a major Indian automobile manufacturer started by a Rajasthani merchant.
It is world's fourth largest manufacturer of two-wheelers and India's second largest two
wheeler manufacturer and the world's 4th largest two- and three-wheeler maker. It is
based in Pune, Maharashtra, with plants in Akurdi and Chakan (Pune), Waluj (near
Aurangabad) and Pantnagar in Uttaranchal. Bajaj Auto makes and exports motor
scooters, motorcycles and the auto rickshaw.
The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1946.
Over the last decade, the company has successfully changed its image from a scooter
manufacturer to a two wheeler manufacturer. Its product range encompasses
scooterettes, scooters and motorcycles. Its real growth in numbers has come in the last
four years after successful introduction of a few models in the motorcycle segment.
The company, headed by Rahul Bajaj, is worth more than US$1.5 billion.
Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading
Corporation Private Limited. It started off by selling imported two- and three-wheelers in
India. In 1959, it obtained license from the Government of India to manufacture two- and
three-wheelers and it went public in 1960. In 1970, it rolled out its 100,000th vehicle. In
1977, it managed to produce and sell 100,000 vehicles in a single financial year. In 1985,
it started producing at Waluj in Aurangabad. In 1986, it managed to produce and sell
500,000 vehicles in a single financial year. In 1995, it rolled out its ten millionth vehicle
and produced and sold 1 million vehicles in a year.Bajaj has grown operations in 50
countries by creating a line of value-for-money bikes targeted to the different
preferences of entry-level buyers.
Bajaj doesn't have a straight vision or mission statement. They define it in terms of brand identity, brand essence
(derived from mission) and brand values
Our Brand Identity
experience.
In doing so, we ensure a special place for ourselves in the hearts and the minds of our customers.
Our Brand Essence
Innovation
Innovation is how we create the future. It is a value that provokes us to reach beyond the obvious in
pursuit of that which exceeds the ordinary.
Perfection
Perfection is how we set new standards.It is a value that exhibits our determination to excel by
endeavoring to establish new benchmarks all the time.
Speed
Speed is how we convey clear conviction. It is a value that keeps us sharply responsive, mirroring our
commitment towards our goals and processes.
Transparency
Transparency is how we characterise ourselves. It is a value that makes us worthy of credibility through
integrity, of trust through sensitivity and of loyalty through interdependence
(Market Shares of the major players in the two wheeler market segment)
10
The industry exhibits some degree of collusive behavior and thus represents an oligopolistic form of market
structure. Product and brand differentiation are seen as the primary means of sustaining competitive advantage.
In order to sustain brand equity, players spend large percentages of their revenues in advertising and brand
building activities. The supply and distribution networks are decisive factors in staying competitive and
normally need a huge capital investment.
The two wheeler industry is capital intensive with large fixed cost requirements and new model introductions
mandatory at frequent intervals in order to sustain the demand. This involves substantial design and R&D costs.
Such high fixed costs can be offset only by achieving economies of scale. Moreover, developing a distribution
channel is extremely difficult in a country like India. Therefore, it is difficult for a new player to enter this
industry.
Indian market -- including the Kawasaki Bajaj Eliminator -- India's first heavy cruiser. Nearly 3 million units of
Bajaj's products are annually distributed to more than 50 countries. Bajaj Auto was founded in 1945.
PROFILE
Founder
Year of Establishment
Industry
Business Group
Listings & its codes
Presence
Joint Venture
Registered & Head Office
Jamnalal Bajaj
1926
Automotive - Two & Three Wheelers
The Bajaj Group
BSE: 532977, NSE: BAJAJ-AUTO
Distribution
network
covers
50
countries.
Dominant presence in Sri Lanka, Bangladesh, Columbia, Guatemala,
Peru, Egypt, Iran and Indonesia.
Kawasaki Heavy Industries of Japan
Akurdi, Pune - 411035
India
Tel.: +(91)-(20)-27472851
Fax: +(91)-(20)-27473398
Works
E-mail
Website
Managing Director
Company Secretary
Executive Director
Vice Chairman
Wholetime Director
President
Vice President (Finance)
Vice President (Insurance)
12
N. H. Hingorani
P. B. Menon
R. L. Ravichandran
C. P. Tripathi
Niladri Banerjee
Ramesh Bhargava
K. P. Chander
Kevin DSa
R. V. Govind
Arvind Gupta
R. S. Gupta
N. V. Iyer
Anil G. Khopkar
G. B. Laddha
ShrikantMarathe
N. G. Maengane
K. P. Nair
C. K. Rao
V. M. Rao
P. K. Rath
S. R. Rage
D.K. Sharma
2.2 HISTORY
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 Auto Limited is India's largest manufacturer of scooters and motorcycles.
The company generally has lagged behind its Japanese rivals in technology, but has invested heavily to catch
up. Its strong suit is high-volume production; it is the lowest-cost scooter maker in the world.Although publicly
owned, the company has been controlled by the Bajaj family since its founding.
13
Origins
The Bajaj Group was formed in the first days of India's independence from Britain. Its founder, Jamnalal Bajaj,
had been a follower of Mahatma Gandhi, who reportedly referred to him as a fifth son. 'Whenever I spoke of
wealthy men becoming the trustees of their wealth for the common good I always had this merchant prince
principally in mind,' said the Mahatma after Jamnalal's death. Jamnalal Bajaj was succeeded by his eldest son,
27-year-old Kamalnayan, in 1942. Kamalnayan, however, was preoccupied with India's struggle for
independence. After this was achieved, in 1947, Kamalnayan consolidated and diversified the group, branching
into cement, ayurvedic medicines, electrical equipment, and appliances, as well as scooters.The precursor to
Bajaj Auto had been formed on November 29, 1945 as M/s Bachraj Trading Ltd. It began selling imported twoand three-wheeled vehicles in 1948 and obtained a manufacturing license from the government 11 years later.
The next year, 1960, Bajaj Auto became a public limited company. Rahul Bajaj reportedly adored the famous
Vespa scooters made by Piaggio of Italy. In 1960, at the age of 22, he became the Indian licensee for the make;
Bajaj Auto began producing its first two-wheelers the next year. Rahul Bajaj became the group's chief executive
officer in 1968 after first picking up an MBA at Harvard. He lived next to the factory in Pune, an industrial city
three hours' drive from Bombay.The company had an annual turnover of Rs 72 million at the time. By 1970, the
company had produced 100,000 vehicles. The oil crisis soon drove cars off the roads in favor of two-wheelers,
much cheaper to buy and many times more fuel-efficient. A number of new models were introduced in the
1970s, including the three-wheeler goods carrier and Bajaj Chetak early in the decade and the Bajaj Super and
three-wheeled, rear engine Autorickshaw in 1976 and 1977. Bajaj Auto produced 100,000 vehicles in the 197677 fiscal year alone. The technical collaboration agreement with Piaggio of Italy expired in 1977. Afterward,
Piaggio, maker of the Vespa brand of scooters, filed patent infringement suits to block Bajaj scooter sales in the
United States, United Kingdom, West Germany, and Hong Kong. Bajaj's scooter exports plummeted from Rs
133.2 million in 1980-81 to Rs 52 million ($5.4 million) in 1981-82, although total revenues rose five percent to
Rs 1.16 billion. Pretax profits were cut in half, to Rs63 million. Rahul Kamalnayan Bajaj, 66, has stepped down
as managing director of Bajaj Auto passing on the mantle of the company to his eldest son, Rajiv. Rahul Bajaj
will continue as the chairman of the Bajaj conglomerate. Bajaj Auto is facing increased competition from
Honda and Piaggio. Honda has overtaken Bajaj as India's No.1 scooter maker in the past two years.
New Competition in the 1980s
Japanese and Italian scooter companies began entering the Indian market in the early 1980s. Although some
boasted superior technology and flashier brands, Bajaj Auto had built up several advantages in the previous
decades. Its customers liked the durability of the product and the ready availability of maintenance; the
14
company's distributors permeated the country. The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc
motorcycle was immediately successful, and the company aimed to be able to make 60,000 of them a year by
1985. Capacity was the most important constraint for the Indian motorcycle industry. Although the country's
total production rose from 262,000 vehicles in 1976 to 600,000 in 1982, companies like rival Lohia Machines
had difficulty meeting demand. Bajaj Auto's advance orders for one of its new mini-motorcycles amounted to
$57 million. Work on a new plant at Waluj, Aurangabad commenced in January 1984.The 1986-87 fiscal year
saw the introduction of the Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles. The company was making
500,000 vehicles a year at this point. Although Rahul Bajaj credited much of his company's success with its
focus on one type of product, he did attempt to diversify into tractor-trailers. In 1987 his attempt to buy control
of Ahsok Leyland failed.
Still, intense competition was beginning to hurt sales at home and abroad during the calendar year 1997. Bajaj's
low-tech, low-cost cycles were not faring as well as its rivals' higher-end offerings, particularly in high-powered
motorcycles, since poorer consumers were withstanding the worst of the recession. The company invested in its
new Pune plant in order to introduce new models more quickly. The company spent Rs 7.5 billion ($185
million) on advanced, computercontrolledmachine tools. It would need new models to comply with the more
stringent emissions standards slated for 2000. Bajaj began installing Rs 800 catalytic converters to its twostroke scooter models beginning in 1999. Although its domestic market share continued to slip, falling to 40.5
percent, Bajaj Auto's profits increased slightly at the end of the 1997-98 fiscal year. In fact, Rahul Bajaj was
able to boast, 'My competitors are doing well, but my net profit is still more than the next four biggest
companies combined.' Hero Honda was perhaps Bajaj's most serious local threat; in fact, in the fall of 1998,
Honda Motor of Japan announced that it was withdrawing from this joint venture.
Principal Subsidiaries: Bajaj Auto Finance Ltd.; Bajaj Auto Holdings Ltd.; Bajaj Electricals
Ltd.; Bajaj Hindustan Ltd.; Maharashtra Scooters Ltd.; Mukand Ltd.
Principal Competitors: Honda Motor Co., Ltd.; Suzuki Motor Corporation; PiaggioSpA.
Mukand Ltd.
Jeevan Ltd.
R&D
Engineering
19
Sanjiv Bajaj said that they are trying to make the organisational structure more responsive. They have brought
down the number of layers between the chief executive officer (CEO) and the shop-floor level to four, which is
in line with existing standards. They are further looking at cutting down on one more layers in the
organisational structure. This re-organisation, according to him, is a reflection of the changing market structure
and dynamics. Bajaj Auto Ltd also plans to invest in marketing, sales and the R&D side. BAL had recently
announced a voluntary retirement scheme for middle-level management covering around 400-500 people of
which 170 odd, opted for the VRS. BAL has previously stated that it intends to bring down its workforce level
to 10,000 from its current 13,000 odd levels. Interestingly, the countrys other major two-wheeler manufacturer
Hero Honda has also embarked on a manpower rationalisation drive at the top level. The aim is to induct fresh
competencies at the senior level.
2.5 PRODUCTS
Bajaj manufactures and sells motorcycles, scooters, auto-rickshaws and most recently, cars. Bajaj Auto is
Indias largest exporter of motorcycles and three-wheelers. Bajaj Autos exports accounted for approx. 35% of
20
its total sales. 47% of its exports are made to Africa. Boxer motorcycle is the largest selling single brand in
Africa.
Motorcycles
Two-wheeler sales of Indian players are dominated by the domestic market and, within it, by motorcycles. After
growing at a sharp clip from the late 1990s, motorcycle sales witnessed a7.8% drop in volume in 2007-08, due
to falling domestic demand as a result of rising interest rates and many private sector banks reducing their retail
lending exposures. 2008-09 saw a modest increase in motorcycle sales of 4%, driven largely by growth in cash
sales. Even so, sales of motorcycles (both domestic and exports) in 2008-09 has been lower than what it was in
2006- 07, before the slowdown hit this sector. Chart A depicts the data from 1998-99.
Despite the slight uptick in the industrys sales volume, Bajaj Auto did not maintain volume growth, for reasons
that will be discussed below. From 1.66 million motorcycles in 2007-08, the companys domestic sales fell
by23% to 1.28 million units in 2008-09. Some of this was compensated by a 31% increase in exports to 631,383
units. But it was not enough Consequently, Bajaj Autos market share (domestic and exports, combined) fell
from 32.7% in 2007-08 to 28% in 2008-09. Table 1 gives the data.
Table 1: Motorcycle sales, domestic and exports (in numbers)
21
Year ended
Sales (nos.
Sales growth
BAL (nos.
BALs
BALs
31 March
2003
2004
2005
2006
2007
2008
2009
Millions)
3.757
4.317
5.218
6.201
7.100
6.544
6.806
31.3%
14.9%
20.9%
18.8%
14.5%
(7.8%)
4.0%
Millions)
0.868
1.024
1.450
1.912
2.379
2.140
1.908
growth
32.3%
17.9%
41.6%
31.9%
24.4%
(10.1%)
(10.8%)
Market share
23.1%
23.7%
27.8%
30.8%
33.5%
32.7%
28.0%
OF FEATURES
BAL PRODUCTION
COMPETITOR
THE BIKES
ENTERY
PRODUCTS
Hero Honda Passion
SEGMENT
35,000.
Plus
segment accounted
for 34% in India in
EXECUTIVE
Comprise 100cc to
2008-09
In this segment with two brands: HERO HONDA CBZ
SEGMENT
135cc motorcycles,
XCD and
Extreme and
prices between
Discover.
Splendour
PERFORMANC
Rs.40,000 to Rs.50,000
These are sleek, high
HEO HONDA
E SEGMENT
performance, with
11
Of Rs.50, 000.
Three wheelers
The companys domestic sales of three-wheelers in 2008-09 were 12% lower compared to the previous year,
and stood at 135,473 units. Export demand grew at 2% to 139,056 units. However that was not sufficient to
22
prevent a decline in the companys total threewheeler sales which fell by 5.4% to 274,529 units in 2008-09.
Given that total industry sales shrank by 1.6% in 2008-09 over the previous year, while Bajaj Autos fell by
5.4%, the companys market share dropped by 2.3 percentage points to 55.1%. At this market sharehowever,
Bajaj Auto remains the leading three-wheeler player in India.
PASSENGER VEHICLE 2007-2008
2008-2009
RATE OF GROWTH
SALES
INDUSTRY SALES
375,180
BAJAJ AUTO SALES
263,598
BAJAJ AUTO MARKET 70.3%
415,411
264,332
63.6%
10.7%
0.3%
(6.7%)
SHARES
GOODS CARRIERS
INDUSTRY SALES
130,826
BAJAJ AUTO SALES
26,714
BAJAJ AUTO MARKET 20.4%
82,382
10,197
12.4%
(37.0%)
(61.8%)
(8.0%)
SHARES
TOTAL 3-WHEELERS
INDUSTRY SALES
506,006
BAJAJ AUTO SALES
290,312
BAJAJ AUTO MARKET 57.4%
497,793
274,529
55.1%
(1.6%)
(5.4%)
(2.3%)
SHARES
Cars
In 2010, Bajaj Auto announced cooperation with Renault and Nissan Motor to develop a US$ 2,500 car, aiming
at a fuel efficiency of 30 kilometres per litre (85 mpg; 71 mpg) (3.3 L/100 km), or twice an average small car,
and carbon dioxide emissions of 100 g/km. On 3 January 2012, Bajaj auto unveiled the Bajaj RE60, a mini car
for intra-city urban transportation. The target customer group will be Bajaj's three-wheeler customers.
According to its Managing Director Rajiv Bajaj, the RE60 powered by a new 200 cc rear mounted petrol engine
will have a top speed of 70 kilometres per hour (43 mph), a mileage of 35 kilometres per litre (99 mpg; 82 mpg)
and carbon dioxide emissions of 60 g/km.
23
1997 (Bajaj KB125) Kawasaki Bajaj Boxer, rear engine diesel autorickshaw
2004 Bajaj KT 100, New Bajaj Chetak 4-stroke with Wonder Gear, Bajaj Discover DTS-i
2007 Bajaj Pulsar-200 (Oil Cooled), Bajaj Kristal, Bajaj Pulsar 220 DTS-Fi (Fuel
Injection), XCD 125 DTS-Si
2008 Bajaj Discover 135 DTS-i sport (upgrade of existing 135 cc model)
2009 Bajaj Pulsar 135, Bajaj XCD 135 cc, Bajaj Pulsar 150 DTS-i UG IV, Bajaj Pulsar 180
DTS-i UG IV, Bajaj Pulsar 220 DTS-i, Bajaj Discover 100 DTS-Si, Kawasaki Ninja 250R
2012 Bajaj Pulsar 200 NS, launch of 200 cc bike, Discover 125ST, launch of 125 cc bike
two key requirements of the market which, over the years, have pretty much remained
constant for either fuel-efficient commuter bikes or sporty, powerful products. The
Discover has now been positioned to fulfill the former need in a segment where Hero
Honda reigns supreme while the Pulsar has established itself in the sporty slot, with
monthly sales of over 40,000 units. Bajaj Auto Ltd has announced that the company may
launch a small car in the year 2010 in India. The second largest two wheeler maker in
India will enter the small car segment in partnership with French car giant Renault and
Nissan. The small car prototype was unveiled today and the company wants to promote
the vehicle as economical and affordable car.
The Bajaj Autos car will be expensive as it will meet safety and emission norms. The
standard version will come with an air conditioner.
Bajaj Auto Ltd = 50 per cent
Bajaj Auto, which is yet to sign a joint venture agreement with its partners, Renault and Nissan. The ULC
project was conceived as a three-way alliance where Bajaj would hold 50 per cent equity.
Renault = 25 per cent
The ULC project was conceived as a three-way alliance where Renault would hold 25 per cent equity.
Nissan = 25 per cent
The ULC project was conceived as a three-way alliance where Nissan would hold 25 per cent equity.
Bajaj Auto, which is yet to sign a joint venture agreement with its partners, Renault and Nissan. The ULC
project was conceived as a three-way alliance where Bajaj would hold 50 per cent equity with Renault and
Nissan accounting for 25 per cent each. Bajaj-Renault-Nissan will miss its 2011 deadline on its ultra-low-cost
car project. Bajaj Auto managing director Rajiv Bajaj has ordered that the work done so far on the project be
scrapped and has demanded major modifications on design, positioning and other details, according to a person
familiar with the development.
Bajaj Auto Launches RE600 Cargo Vehicle
Bajaj Autos R&D team has created this unique product to deliver the highest mileage and lowest operating
costs in the commercial 3-wheeler category. RE600 offers best in class mileage which is at least 5 km per liter
of diesel more than other vehicles. It has a robust solid construction and comes at an attractive price point which
makes for the lowest cost of ownership. RE600 is priced at Rs.1, 03,686. The RE 600 is being launched phase
wise across the country from September 2009 onwards
26
2.6 AWARDS
PRODUCT
AWARD
Bajaj Eliminator
Most Exciting Bike of the Year 2001
Bajaj Eliminator
Bike of the Year 2002
Bajaj Pulsar
Most Exciting Bike of the Year 2002
Bajaj Pulsar
Bike of the Year 2002
For year 2001-2002
AWAED BODY
OVERDRIVE
OVERDRIVE
OVERDRIVE
Business Standard Motoring
PRODUCT
Bajaj pulsar
AWARDS
Bike of the year 2003
Bajaj pulsar
AWARD BODY
ICICI Bank OVERDRIVE
Awards 2003
NFO Automotive
BBC World Wheels
70,000
BBC World Wheels
Viewers Choice Two
Wheeler of the
Year 2003
PRODUCTS
AWARDS
AWARD BODY
Bajaj Pulsar
DTS-i
DTS-i
Technology
Bajaj Auto
General
CNBC AUTOCAR
AUTOAWARDS 2004
ICICI Bank OVERDRIVE Awards
2004
ICICI Bank OVERDRIVE Awards
2004
ICICI Bank OVERDRIVE Awards
2004
Economic Times
Bajaj Pulsar
DTSi
Bajaj Discover
DTS-i
Bajaj Discover
DTS-i
AWARD
TNS Automotive Total Customer Satisfaction in
Premium Segment
Bike of the Year
Indigenous Design of the Year
AWARD
BODY
NFO Automotive
OVERDRIVE
OVERDRIVE
PRODUCTS
AWARDS
AWARD BODY
Autocar Professional
Bike India
Bajaj CT 100
TNS Automotive
Bajaj Discover
DTS-i
OVERDRIVE
General
Bajaj Discover
DTS-i
OVERDRIVE
28
PRODUCT
Chakan Plant
Chakan&Waluj
Plants
General
Pulsar DTS-Fi
AWARDS
Super Platinum Award for Manufacturing
Excellence
Audit Passed for TPM Excellence Award
Category I
Bikemaker of the Year
Bike of the year
Platina
General
TPM
Overdrive Awards 07
CNBC-TV18 Autocar Auto
Awards
NDTV Profit Bike India
NDTV Profit Bike India
PRODUCT
General
AWARD
Best Two-wheeler Company
Pulsar
Rural Financing
HR
General
Pulsar 220 DTS-Fi
AWARD BODY
Frost and Sullivan
AWARD BODY
NDTV Profit Business Leadership
Awards
4Ps Power Brand Awards
IMTMA-SIEMENS Productivity
Championship Award 2007
FIE (Fuel Instruments and Engineering)
NITIE
TNS Voice of Customer Awards
CNBC-TV18 Autocar Auto Awards
NDTV Profit Car India and Bike India
Awards
Business Standard Motoring
Overdrive
NDTV Profit Car India and Bike India
Awards
Avaya Global Connect-Economic Times
Automonitor
Automonitor
All Auto Mags-Overdrive, AutoCar, BS,
Bike Top Gear
PRODUCT
Kawasaki Ninja
AWARD
Bike of the Year
AWARD BODY
IMOTY
29
Pulsar 135LS
Discover DTS-Si
Pulsar 135LS
Kawasaki Ninja
Pulsar 135LS 4-V
Discover DTS-Si
Kawasaki Ninja
Bajaj Discover DTSSi
Kawasaki Ninja
Bajaj Discover And
Pulsar
Kawasaki Ninja
Bajaj Discover
Pulsar135LS
Pulsar135LS
Bajaj Discover
Kawasaki Ninja
Bajaj Auto
Pulsar
Bajaj Auto
Bajaj Auto
ET NOW - ZigWheels
ET NOW - ZigWheels
ET NOW - ZigWheels
ET NOW - ZigWheels
ET NOW - ZigWheels
ET NOW - ZigWheels
NDTV Profit - Car & Bike
NDTV Profit - Car & Bike
Bajaj Auto
CNBC - Overdrive
CNBC - Overdrive
UTV Bloomberg-AutoCar
UTV Bloomberg-AutoCar
Auto India
BS Motoring
Auto India
Effie
Brand Equity
Global Youth Marketing
Forum 2010
ET - Frost & Sullivan
Bajaj Auto
PRODUCT
Bajaj Pulsar 135
LS
Bajaj Pulsar
Bajaj Pulsar 135
LS
Bajaj Pulsar 135
LS
Bajaj Avenger 220
Bajaj Pulsar 135
LS
Discover 150 DTSI
AWARD
Bike of the Year 2010
AWARD BODY
BBC - TopGear
CNBC - Overdrive
Bike India
Bike India
CHAPTER: 3
ANALYSIS AND DISCUSSION
Current Ratio:
YEAR
CURRENT ASSETS
(RS. In Cr.)
CURRENT LIABILITIES
(RS. In Cr.)
CURRENT RATIO
2008
1780.67
2019.29
0.88 times
2009
2401.45
2602.35
0.92 times
Analysis:-Current ratio is higher in 2009 as compared to 2008. There is decreased all current assets except other
receivables which increased in 2009. The net current assets increased by Rs.238.62 cr. in 2009 and at same time
current liabilities increased by Rs.200.9 cr. in 2009. It means Bajaj Auto Ltd., has sufficient current assets to pay
current liabilities. Short term solvency of the company is satisfactory.
(ii)
YEAR
Cr.)
2008
1334.34
1587.59
0.84 times
2009
1570.00
1869.69
0.84 times
Analysis:-We have seen that the company had a higher current ratio in 2009 and was able to meet its short term
obligations as compared to 2008. Whereas the quick ratio identifies the role played by the inventories in this
31
context. Therefore the ratio shows that in year 2009 it has increased as compared to 2008 due to the fact that the
quick assets is increased by Rs.164.14 cr. only and current liabilities have increased by Rs.583.12 cr. The
company is able to meet its short term obligations.
(iii)
YEAR
QUICK ASSETS
QUICK LIABILITIES
QUICK RATIO
2008
2009
(Rs. In Cr.)
331.38
495.52
(Rs. In Cr.)
2019.23
2602.35
0.16 times
0.19 times
Analysis:-This ratio says that both year 2008 and 2009 as same. In 2009 increased debt by Rs.236 cr. That is
increased in Debenture, Long Term loan, Redeemable Preference shares. And equity means Equity share
capital, Preference shares other than redeemable, Reserves and surplus, Losses and Fictitious assets increased
by Rs.282.1 cr. in 2009 tear.
(iv)
YEAR
2008
2009
SALES TURNOVER
(Rs. In Cr.)
9856.66
9310.24
INVENTORY
(Rs. In Cr.)
349.61
338.84
INVENTORY
TURNOVER RATIO
28.19
27.47
Analysis:-The inventory turnover ratio in the year 2008 was 28.19 which indicate that 28.19 times in a year the
inventory of the firm is converted into receivables or cash. However, in 2009, the inventory turnover ratio
slightly decreased to 27.47. This was due to the fact that the Bajaj Auto Ltd. in 2009 invested more then 0.72
times the inventory in 2008.
32
(v)
YEAR
SALES
FIXED ASSETS
FIXED ASSETS
2008
2009
(Rs. In Cr.)
8827.15
8700.17
(Rs. In Cr.)
4906.42
5752.26
TURNOVER
1.79%
1.51%
Analysis:-According to the calculations above the productivity of fixed assets in year 2009 is not better than it
was in previous years. In 2008, it was 1.79% and now it has been slightly decreased to 1.51%. This change was
brought about by decreased in total sales by Rs.126.98 cr., whereas the fixed assets increased only by Rs.845.84
cr.
33
Discover - The same DTSI technology of Pulsar extended to 125 cc Discover was a great success. With this,
Bajaj could realize its success riding on the back of technological innovation rather than the joint venture way
followed by competitors to gain market share.
BAL now is taking a leaf out of the FMCG business model to take the company to greater heights.Bajaj has
kicked off a project to completely restructure the company's retail network and create multiple sales channels.
Over the next few months, the company will set-up separate sales channels for every segment of its business
and consumers. Bajaj Auto's entire product portfolio, from the entry-level to the premium, is being sold by the
same dealers. The restructuring will involve separate dealer networks catering to the urban and rural markets as
well as its three-wheeler and premium bikes segments. Bajaj Auto also plans to set-up an independent network
of dealers for the rural areas. The needs of financing, selling, distribution and even after-sales service are
completely different in the rural areas and do not makes sense for city dealers to control this. The company also
plans to set-up exclusive dealerships for its three-wheeler products instead of having them sold through an
estimated 300 of its existing dealers.
Other Strategic Issues:
Cash is strength: Bajaj Auto has been sitting on a cash pile for over five years now. Over the next couple of
years, competition in the two-wheeler market is set to intensify. TVS Motors and Hero Honda are on a product
expansion binge. To fight this battle and retain its hard-earned market share in the motorcycle segment, Bajaj
Auto will need its cash muscle. A look at its own story over the past five years provides valuable insight.
Stake for Kawasaki: Bajaj Auto's attempt to vest the surplus cash in a separate company may be a prelude to
offering a stake to Kawasaki of Japan in the equity of the automobile company. The latter has been playing an
increasingly active role in Bajaj's recent models, and its brand name is also more visible in Bajaj bikes than in
the past.
Better value proposition: Shareholder interests may be better served if the cash is retained to pursue growth in
a tough market. This would also obviate the need to fork-out fancy sums as stamp duty to the government for
the de-merger. A combination of a large one-time dividend and a regular buyback program through the tender
route may offer better value. A strategic stake for Kawasaki would only positively influence the stock's
valuation.
35
Income
Sales Turnover
Excise Duty
Net Sales
Other Income
Stock Adjustments
Total Income
Mar '09
12 mths
19,997.25
0.00
19,997.25
795.49
-24.00
20,768.74
9,310.24
610.07
8,700.17
-6.20
-24.49
8,669.48
20,475.74
959.09
19,516.65
413.66
94.15
20,024.46
17,386.51
934.71
16,451.80
1,176.00
82.79
17,710.59
12,420.95
607.70
11,813.25
22.50
47.60
11,883.35
It is interpreted from the above table that the total income is more in 2013 than 2012. The total income is
20768.74 in 2013 and in 2012 it is 20021.46. Because of increase in net sale the net sale in 2013 is 19997.25
and in 2012 it is 19516.65.
Table 3.3 B
Expenditure
(2009-2013)
Expenditure
Raw Materials
14,761.83
14,580.24
11,965.30
8,187.11
6,502.10
36
121.33
639.48
0.00
101.85
541.04
73.76
86.61
494.33
61.77
70.35
411.76
57.54
60.89
366.67
57.08
Expenses
Selling and Admin
0.00
364.06
517.27
407.61
381.73
Expenses
Miscellaneous Expenses
Preoperative
815.36
0.00
263.37
-49.43
168.53
-16.66
221.94
-15.67
225.56
-14.42
ExpCapitalised
Total Expenses
16,338.00
15,874.89
13,277.15
9,340.64
7,579.61
It is interpreted from the above table that the total expenses are more in 2013 than 2012 the total expenses in
2013 is 16338.00 and in 2012 is 15874.89. It is because of more expenses on raw materials, employee cost.
the raw material cost in 2013 is 14761.83 and in 2012 is 14580.24
Table 3.3 C
Liabilities
(2009-2013)
Liabilities
Mar '13
12 mths
In Rs Cr.
Mar '12 Mar '11
12 mths
12 mths
Mar '10
12 mths
Mar '09
12 mths
Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
289.37
289.37
0.00
0.00
7,612.5
289.37
289.37
0.00
0.00
5,751.70
289.37
289.37
0.00
0.00
4,620.85
144.68
144.68
0.00
0.00
2,783.66
144.68
144.68
0.00
0.00
1,725.01
Revaluation Reserves
Networth
8
0.00
7,901.9
0.00
6,041.07
0.00
4,910.22
0.00
2,928.34
0.00
1,869.69
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
5
0.00
71.27
71.27
7,973.2
0.00
97.48
97.48
6,138.55
23.53
301.62
325.15
5,235.37
12.98
1,325.60
1,338.58
4,266.92
0.00
1,570.00
1,570.00
3,439.69
2
It is interpreted from the above table that the total liabilities are more in 2013 than 2012 the total liabilities are
7973.22 in 2013 and in 2012 is 6138.55. It is because of increase in reserves the reserves of the company are
7612.58 in 2013 and in 2012 are 5751.70.
Table 3.3 D
37
Asstes of BAL
(2009-2013)
Mar 13 Mar 12
12 mths 12 mths
Mar 11
12 mths
Mar 10 Mar 09
12 mths 12 mths
Application Of Funds
Gross Block
3,828.8 3,425.94
3,395.16
3,379.25 3,350.20
5
2,024.4 1,914.33
1,912.45
1,899.66 1,807.91
Net Block
2
1,804.4 1,511.61
1,482.71
1,479.59 1,542.29
3
293.55
343.15
6,430.4 4,882.81
149.34
4,795.20
120.84
106.48
4,021.52 1,808.52
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
8
636.28
678.53
0.00
423.20
558.86
446.49
1,195.1 1,548.22
547.28
362.76
155.45
1,065.49
4
1,987.4 1,744.82
3,891.66
2,291.29 1,567.09
Fixed Deposits
Total CA, Loans & Advances
4
0.00 1,208.36
3,182.5 4,501.40
401.04
5,358.19
1.21
1.19
3,111.75 2,401.45
Deffered Credit
Current Liabilities
Provisions
8
0.00
0.00
668.22 2,925.53
1,742.4 2,174.89
0.00
2,624.35
3,925.72
0.00
0.00
2,218.06 1,378.20
2,248.72 1,224.15
7
2,410.6 5,100.42
6,550.07
4,466.78 2,602.35
9
771.89 -599.02 -1,191.88 -1,355.03 -200.90
0.00
0.00
0.00
0.00
183.30
9,300.3 6,138.55 5,235.37 4,266.92 3,439.69
446.21
272.84
100.20
819.25
338.84
358.65
135.68
833.17
5
It is interpreted from the above table that the total are more in 2013 as compared to 2012 the assets are 9300.35
in 2013 and in 2012 it is 6138.55. It is because of more investments the total investments are 6430.48 in 2013
and 2012 it is 4882.81.
Table 3.3 E
38
Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord
Mar '13
12 mths
3,635.25
4,430.74
0.54
4,430.20
163.97
0.00
4,266.23
0.00
4,266.23
Mar '12
12 mths
3,735.91
4,149.57
22.24
4,127.33
145.62
2.14
3,979.57
46.60
4,026.17
Mar '11
12 mths
3,257.44
4,433.44
1.69
4,431.75
122.84
2.14
4,306.77
46.77
4,353.54
Mar '10
12 mths
2,520.21
2,542.71
5.98
2,536.73
136.45
0.00
2,400.28
26.87
2,427.15
Mar '09
12 mths
1,096.07
1,089.87
21.01
1,068.86
129.79
0.00
939.07
18.72
957.79
Items)
Tax
Reported Net Profit
1,222.66
3,043.57
1,022.12
3,004.05
1,011.02
3,339.73
710.12
1,702.73
301.61
656.48
It is interpreted from the above table that the net profit in 2013 is more than compared to 2012s net profit. The
net profit of 2013 is 3043.57 and of 2012 is 3004.05. its is because of increases in PBDIT. The PBDIT is
4430.74 in 2013 and in 2012 it is 4149.57
CHAPTER 4
SWOT ANALYSIS
Weaknesses:
Opportunities:
Threats:
4. Substitutes: There is no perfect substitute to this industry. Also, if there is any substitute to a twowheeler, 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.
REFERENCES
1.
2.
3.
4.
5.
www.bajajauto.com
econimictimes.indiatimes.com
www.zigwheels.com
www.moneycontrol.com
Profit.ndtv.com
41
CONCLUSION
The impression of Bajaj in the minds of the public is that it is a moped & a three-wheeler company, & it
is a very orthodox &unhappening image in the minds of the youth. It should use a powerful brand
ambassador & individual whom the youth can relate with.
It should aggressively market itself as a motorcycle company & move from its traditional mindset
(Rahul Bajaj had once stated that he had only one department in his company the dispatch department &
that he did not require a marketing department.)
Bajaj should aggressively push sales of higher margin products & launch new products in niche
segments.
Bajaj should also try & push for tie-ups & Joint Ventures in foreign market & try & increase its export
base. (E.g. Tata Motors tie-up with Rover for marketing of India & Joint Venture with Senegal
government for manufacturing trucks & commercial vehicles.)
Bajaj should look for possible mergers & acquisitions. (E.g. Maharashtra Scooters) & try & improve its
distribution network & provide it with products in niche segments & help increase production capacity
& provide economies of scale.
Bajaj should evaluate the process of backward integration as it has huge cash reserves surplus. This
process would help it in acquiring inputs continuously at lower cost & at regular intervals.
42
Increase its dealer network to tap rural growing markets by going in for tie-ups & offering better
margins to dealers.
The key to Bajaj real success lies in Research & development. How it is able to use value analysis &
value engineering by adding new features to its existing product line & how it is able to come out with
new product for different niche markets. Analysis of different alternatives like outsourcing, in-house,
purchase & tie-up should be evaluated.
43
ANNEXURES
In Rs Cr.
Mar '12 Mar '11
12 mths
12 mths
Mar '10
12 mths
Mar '09
12 mths
Sources Of Funds
Total Share Capital
Equity Share Capital
Share Application Money
Preference Share Capital
Reserves
289.37
289.37
289.37
289.37
0.00
0.00
0.00
0.00
7,612.5 5,751.70
289.37
289.37
0.00
0.00
4,620.85
144.68
144.68
144.68
144.68
0.00
0.00
0.00
0.00
2,783.66 1,725.01
Revaluation Reserves
Networth
8
0.00
0.00
7,901.9 6,041.07
0.00
4,910.22
0.00
0.00
2,928.34 1,869.69
Secured Loans
Unsecured Loans
Total Debt
Total Liabilities
5
0.00
0.00
71.27
97.48
71.27
97.48
7,973.2 6,138.55
23.53
301.62
325.15
5,235.37
12.98
0.00
1,325.60 1,570.00
1,338.58 1,570.00
4,266.92 3,439.69
Mar '12
12 mths
Mar '11
12 mths
Mar '10
12 mths
Application Of Funds
Gross Block
3,828.8 3,425.94
3,395.16
3,379.25 3,350.20
5
2,024.4 1,914.33
1,912.45
1,899.66 1,807.91
Net Block
2
1,804.4 1,511.61
1,482.71
1,479.59 1,542.29
3
293.55
343.15
6,430.4 4,882.81
149.34
4,795.20
120.84
106.48
4,021.52 1,808.52
Inventories
Sundry Debtors
Cash and Bank Balance
Total Current Assets
8
636.28
678.53
0.00
423.20
558.86
446.49
1,195.1 1,548.22
547.28
362.76
155.45
1,065.49
2
Mar '13
12 mths
446.21
272.84
100.20
819.25
Mar '09
12 mths
338.84
358.65
135.68
833.17
44
4
1,987.4 1,744.82
3,891.66
2,291.29 1,567.09
Fixed Deposits
Total CA, Loans & Advances
4
0.00 1,208.36
3,182.5 4,501.40
401.04
5,358.19
1.21
1.19
3,111.75 2,401.45
Deffered Credit
Current Liabilities
Provisions
8
0.00
0.00
668.22 2,925.53
1,742.4 2,174.89
0.00
2,624.35
3,925.72
0.00
0.00
2,218.06 1,378.20
2,248.72 1,224.15
7
2,410.6 5,100.42
6,550.07
4,466.78 2,602.35
9
771.89 -599.02 -1,191.88 -1,355.03 -200.90
0.00
0.00
0.00
0.00
183.30
9,300.3 6,138.55 5,235.37 4,266.92 3,439.69
Contingent Liabilities
5
1,252.9 1,445.67
959.66
818.25
924.96
9
273.08
169.69
202.40
129.23
208.77
0.00
364.06
517.27
407.61
Mar '09
12 mths
9,310.24
610.07
8,700.17
-6.20
-24.49
8,669.48
6,502.10
60.89
366.67
57.08
381.73
45
Expenses
Miscellaneous Expenses
Preoperative
ExpCapitalised
Total Expenses
Operating Profit
PBDIT
Interest
PBDT
Depreciation
Other Written Off
Profit Before Tax
Extra-ordinary items
PBT (Post Extra-ord
Items)
Tax
Reported Net Profit
Total Value Addition
Preference Dividend
Equity Dividend
Corporate Dividend Tax
Per share data (annualised)
Shares in issue (lakhs)
Earnings Per Share (Rs)
Equity Dividend (%)
Book Value (Rs)
815.36
0.00
263.37
-49.43
168.53
-16.66
221.94
-15.67
225.56
-14.42
16,338.00
Mar '13
12 mths
3,635.25
4,430.74
0.54
4,430.20
163.97
0.00
4,266.23
0.00
4,266.23
15,874.89
Mar '12
12 mths
3,735.91
4,149.57
22.24
4,127.33
145.62
2.14
3,979.57
46.60
4,026.17
13,277.15
Mar '11
12 mths
3,257.44
4,433.44
1.69
4,431.75
122.84
2.14
4,306.77
46.77
4,353.54
9,340.64
Mar '10
12 mths
2,520.21
2,542.71
5.98
2,536.73
136.45
0.00
2,400.28
26.87
2,427.15
7,579.61
Mar '09
12 mths
1,096.07
1,089.87
21.01
1,068.86
129.79
0.00
939.07
18.72
957.79
1,222.66
3,043.57
1,576.17
0.00
1,302.15
221.30
1,022.12
3,004.05
1,294.65
0.00
1,302.15
211.24
1,011.02
3,339.73
1,311.85
0.00
1,157.47
187.77
710.12
1,702.73
1,153.53
0.00
578.73
96.12
301.61
656.48
1,077.51
0.00
318.30
54.10
2,893.67
105.18
450.00
273.08
2,893.67
103.81
450.00
208.77
2,893.67
115.42
400.00
169.69
1,446.84
117.69
400.00
202.40
1,446.84
45.37
220.00
129.23
46