History of Bajaj Auto

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.
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 two- and 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 1976-77 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 Rs 63 million.

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 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.
The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S Champion followed a year later. About
this time, the Indian government was initiating a program of market liberalization, doing away with the
old 'license raj' system, which limited the amount of investment any one company could make in a
particular industry.
A possible joint venture with Piaggio was discussed in 1993 but aborted. Rahul Bajaj told the Financial
Times that his company was too large to be considered a potential collaborator by Japanese firms. It was
hoping to increase its exports, which then amounted to just five percent of sales. The company began by
shipping a few thousand vehicles a year to neighboring Sri Lanka and Bangladesh, but soon was reaching
markets in Europe, Latin America, Africa, and West Asia. Its domestic market share, barely less than 50
percent, was slowly slipping.
By 1994, Bajaj also was contemplating high-volume, low-cost car manufacture. Several of Bajaj's rivals
were looking at this market as well, which was being rapidly liberalized by the Indian government.
Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The company was the world's fourth
largest manufacturer of two-wheelers, behind Japan's Honda, Suzuki, and Kawasaki. New models
included the Bajaj Classic and the Bajaj Super Excel. Bajaj also signed development agreements with
two Japanese engineering firms, Kubota and Tokyo R & D. Bajaj's most popular models cost about Rs
20,000. 'You just can't beat a Bajaj,' stated the company's marketing slogan.
The Kawasaki Bajaj Boxer and the RE diesel Auto-rickshaw were introduced in 1997. The next year saw
the debut of the Kawasaki Bajaj Caliber, the Spirit, and the Legend, India's first four-stroke scooter. The
Caliber sold 100,000 units in its first 12 months. Bajaj was planning to build its third plant at a cost of Rs
4 billion ($111.6 million) to produce two new models, one to be developed in collaboration with Cagiva
of Italy.
New Tools in the 1990s
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, computer-controlled machine 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 two-stroke 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.
Bajaj Auto had quadrupled its product design staff to 500. It also acquired technology from its foreign
partners, such as Kawasaki (motorcycles), Kubota (diesel engines), and Cagiva (scooters). 'Honda's
annual spend on R & D is more than my turnover,' noted Ruhal Bajaj. His son, Sangiv Bajaj, was
working to improve the company's supply chain management. A marketing executive was lured from
TVS Suzuki to help push the new cycles.
Several new designs and a dozen upgrades of existing scooters came out in 1998 and 1999. These, and a
surge in consumer confidence, propelled Bajaj to sales records, and it began to regain market share in the
fast-growing motorcycle segment. Sales of three-wheelers fell as some states, citing traffic and pollution
concerns, limited the number of permits issued for them.
In late 1999, Rahul Bajaj made a bid to acquire ten percent of Piaggio for $65 million. The Italian firm
had exited a relationship with entrepreneur Deepak Singhania and was looking to reenter the Indian
market, possibly through acquisition. Piaggio itself had been mostly bought out by a German investment
bank, Deutsche Morgan Grenfell (DMG), which was looking to sell some shares after turning the
company around. Bajaj attached several conditions to his purchase of a minority share, including a seat
on the board and an exclusive Piaggio distributorship in India.
In late 2000, Maruti Udyog emerged as another possible acquisition target. The Indian government was
planning to sell its 50 percent stake in the automaker, a joint venture with Suzuki of Japan. Bajaj had
been approached by several foreign car manufacturers in the past, including Chrysler (subsequently
DaimlerChrysler) in the mid-1990s.
Employment fell from about 23,000 in 1995-96 (the year Bajaj suffered a two-month strike at its Waluj
factory) to 17,000 in 1999-2000. The company planned to lay off another 2,000 workers in the short term
and another 3,000 in the following three to four years.
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; Piaggio SpA.

Chronology

 Key Dates:
 1945:Bajaj Auto is founded.
 1960:Rahul Bajaj becomes the Indian licensee for Vespa scooters.
 1977:Technical collaboration with Piaggio ends.
 1984:Work begins on a second plant.
  1998:Bajaj plans to build its third plant to meet demand.
 2000:Thousands of workers are laid off to cut costs.

Additional Details

Personal

 Incorporated:1945 as M/s Bachraj Trading Ltd.

 Employees:17,200
 Sales:Rs 42.16 billion ($903.36 million)(2000)
 Stock Exchanges:Pune Mumbai Delhi London Berlin Frankfurt Munich
 Ticker Symbols:BAJAJAUTO 490 BJATq.L 893361.BE 893361.F 893361.MU
 NAIC:336991 Motorcycle, Bicycle, and Parts Manufacturing

Rahul Bajaj: The Man And His Company

Rahul Bajaj was born on 10th June 1938 at Bengal. Residency, British India. He is an Indian
businessman, industrialist, politician, Forbes billionaire and a member of the Indian Parliament. In 2010,
Forbes had estimated his net worth to be US $ 1.1 Billion making him one of India’s Top 50 richest
persons. He is the Chairman of Bajaj Auto, a leading Indian Automobile Manufacturer.
Businessman Jamnalal Bajaj who started Bajaj Auto in 1945. He has one brother, Shishir Bajaj, with
whom there was a recent business settlement ending the family dispute. He has 3 cousins, Shekhar,
Madhur and Niraj together with whom he controls the Bajaj Group of companies. He is married to
Ruparani and has two sons Rajiv & Sanjiv who are involved in the management of his companies and a
daughter, Sunaina Kejriwal who is married to Manish Kejriwal who heads Temasek India.

Growing Up
Rahul Bajaj went to The Cathedral and John Connon School. He graduated from St. Stephen's College in
Delhi in 1958 with an honors degree in economics. He underwent on-the-job training for 4 years at two
of the group companies. During that time, he also earned a law degree in Bombay. He is also an alumnus
of the prestigious Harvard Business School in USA.

The Beginning
Given his family background- at the tender age of 12, he started dreaming of becoming a businessman.
His grandfather had bought a steel mill and a sugar mill, and in 1945 his father founded Bajaj Auto, now
the crown jewel in the Bajaj Group.

In the 1970s, India was a socialist state barred by rules and regulations. As a result, there was no
entrepreneurship and nothing could be done without government approval. At this difficult time Bajaj
became the CEO of Bajaj Auto Ltd. (BAL) in 1968 at the age of 30 making him one of the youngest
 CEOs of that time.

In this environment, the company was limited to produce just 20,000 units a year. Supply and demand
didn't match. Hence, after placing their order, customers had to wait for roughly ten years to receive it.

To lower costs while improving the price and quality of the products, he increased production to avail
“Economies of Scale”. He ignored a government regulation and increased volume by more than the
permitted 25 percent of his licensed capacity.

His grandfather had been known as the "fifth son" of Mahatma Gandhi and his parents and grandparents
had spent time in British prisons for the sake of Indian independence. Hence, he didn't fear of going to
jail for the (illegal) excess production.

Also, the fact that he was producing a commodity that most Indians needed gave him the strength to take
the risk. He established factories at Akurdi and Waluj and worked hard to expand BAL- now the world's
fourth-largest maker of motorized scooters, three-wheel vehicles, and motorcycles - India's most common
forms of transportation.

Achievements
Since Rahul Bajaj took over the charge of Bajaj Group in 1965, under his leadership Bajaj Auto has
grown to new heights year after year. The turnover of Bajaj Auto has risen from a mere Rs.72 million to
Rs.46.16 billion. He created one of India's best companies in the difficult days of the license-permit raj.

Apart from his achievements as the CEO of BAL, his individual achievements are:

 He is the only top executive to have served two terms as president of the Confederation of Indian
Industry (CII), which represents over 5,000 companies from India's private and public sectors.

 He is a member of International Advisory Committee and his expertise in these matters are tapped by
the New York Stock Exchange.

 For his contribution to Indian industry, he was awarded the nation's third-highest civilian honor, the
Padma Bhushan, in 2002.

 He was nominated to the Rajya Sabha from Maharashtra in June 2006 with cross party support from the
NCP, BJP and the Shiv Sena.

 He was said to be the 20th richest man of India according to the Forbes India poll on top 40 richest
persons in India.

 The Government of India appointed Mr. Bajaj as the Chairman of the Development Council for
Automobiles and Allied Industries, 1975-77.
 In 1975, Mr. Bajaj received the “Man of the Year” Award from the National Institution of Quality
Assurance.

 Mr. Bajaj was selected as Business India's Businessman of the Year 1985.

 In 1988, Mr. Bajaj was felicitated for his achievements in a public function by the Pune Municipal
Corporation.

 Mr. Bajaj was Chairman of Indian Airlines between 1986-89.

 Mr. Bajaj received the Bombay Management Association Award for The Most Distinguished Services
in the Field of Management – 1990.

 Mr. Bajaj was appointed by His Royal Highness, The Prince of Wales as a Member of the Prince of
Wales International Business Leaders Forum in February 1992.

 FIE Foundation awarded Mr. Bajaj the Rashtrabhushan Award in 1996. Lokmanya Tilak Smarak Trust
awarded Mr. Bajaj the Tilak Award in 2000.

 He was also conferred the Alumni Achievement Award by the Harvard Business School in September
2005.
 He was a recipient of many more national as well as international honors.

Failure Of Bajaj Auto

In the early 1990s, the market saw a great recession in the Indian two wheeler sector; overall sales of
two-wheelers declined by 15% in 1991 and 8% in 1992. This period also saw a steep rise in fuel prices,
which resulted in consumers placing greater emphasis on fuel efficiency when purchasing a new two
wheeler. Fuel efficiency of scooters were comparatively less with motorcycles. When banks started
financing for buying new vehicles common people shifted to motorcycles which can save a fortune in
fuel.

Japanese companies like Honda motor co. ltd (Honda), Suzuki and Yamaha started their operations in
India through joint ventures with Indian companies like hero Cycles ltd, TVS, Escorts, etc. All these joint
ventures were in the motorcycle segment. The foreign firms came with the latest technology and efficient
production systems, which dramatically improved the quality of motorcycles available in the Indian
market. Soon the foreign companies started introducing more new models with contemporary
technology, styling and greater fuel efficiency.

Then, the entire Indian market witnessed a change that was not at all foreseen by the company. The
consumer preference shifted from scooters to motorcycles, which affected the company drastically in a
much big way. This was because the difference in the ratio of youngsters and mature adults. In addition
the motorcycles became cheaper, more fuel-efficient and was capable to ride with ease in any terrain. The
arch rivals, Hero Honda was the company the Bajaj had to compete, but it was in vain as Bajaj had not
once thought of modifying their scooters or thought of bringing new motorcycles into market and
ultimately Bajaj had to give up its throne of the largest two wheeler company.
The model Bajaj was rolling out of the company was a geared scooter. In the year 2005-06 with the entry
of gearless scooters Bajaj lost its dominance over the Indian market to the gearless scooter named Activa
from Honda, which was more comfortable for old people as well as women and even men have started to
use Activa for their short errands because of its ease of use.

Forces of Change
“Organisational change is triggered by performance falling below expectations or aspiration levels”
(Nilakant & Ramnarayan, 2006) or change is initiated by disconfirmation. Forces of change can be two
types: the external and the internal.

External Forces

 Consumer preference

In the 1990s, the Indian two wheeler market witnessed a shift in consumer preferences.

 License Raj

The private investment was extensively regulated by the government through licensing. All the important
business decisions like the entry of a firm into an industry, capacity expansion, choice of product,
capacity mix and the technology were controlled by the government in an attempt to prevent
concentration of economic power. This was referred as License Raj. Also there was a change in emission
norms.

 Poor conditions of the road

The conditions were really bad at that time. The consumers need a vehicle with strong reliability and fuel
efficient.

 Poor conditions of the transport system

The suppliers had a hard time for supplying materials. Also the growth was partly attributed to the
inefficient public transport systems in the country’s towns and cities, which led to a greater demand for
personal transport.

Internal Forces
 Company’s inability to force the market and shift in the trend patterns

BAL had been slow in reading the demand pattern and how to cater to the changing consumer tastes and
preferences.

 Company was not interested in R&D

It was believed that the dramatic shift happened because BAL did not pay sufficient attention to design,
research and development and consumer satisfaction.

 No additional features

Motorcycles with better ground clearance, stronger suspensions, and larger wheel bases, performed well
on the village roads. Also the fuel economy was an added bonus

 No other brand of scooters

No young and fresh minds in the company’s management

Change Models
The format and the procedure by which a change has been made in a particular scenario is known as the
change model. Change models are tools for driving change forces in an organization. Managing the
complex process of change mainly involves managing a set of activities, in which each of the activity is
crucial for the overall success of change. The change process involves translating the need for change
into a desire for change, and deciding who will manage the change and creating a effective workable
relationship.

Change Models provided by Kurt Lewin (1951) and V. Nilakant & S. Ramnarayan (2006) is one of the
prominent change models followed in the present world. The best model suited for the current scenario is
the combination of both of these models by above authors. It can be divided into three phases:

The first phase involves preparing the people for change with the focus on getting them to let go of what
is familiar.

The second phase involves taking the steps that actually implement the change.

The last phase involves returning the organization to a stable state again based on the new culture.

The first stage according to Kurt Lewin, in order to implement a change is Unfreezing and most of the
cases it will be done by the change agent. In this scenario, Rahul Bajaj, the chairperson of the company is
the change agent and this stage involves alerting and communicating the problems, performance gap and
need for change to the internal customers/employees. It is basically modifying the current situation in
order to achieve the proposed change by proper communication and understanding to the restrainers of
change which helps to reduce the resistance and it is the best strategy for change.

The second stage involves the application of the change model provided by V. Nilakant and S.
Ramnarayan. It mainly highlights the importance of leadership in the process of change. The task of
appreciating change requires the leader to understand the forces of change and prevailing mindset inside
the organisation, where as task of mobilizing support require leaders to facilitate the idea of change. In
the same model, task of executing change involves creating the right structure and processes in an
organisation, which is crucial and very important for the vertical and horizontal communication within
the organisation, which ensures that employees are highly focused during the change process.
Building Change capability involves empowering employees and making them believe in their own
abilities to face new challenges; undertake and complete new tasks. Above all, high emphasizes is placed
on leadership in the organisation which is the driving force of the above tasks, which also plays a vital
role in creating and sustaining change within an organisation. Managed Change, is a data-driven process
that guides the project teams, internal change agents and sponsors to follow as they just need to follow
guidelines through simple projects or complex initiatives.

The third stage is refreezing stage which stabilizes the organization at a new state of equilibrium. The
main point about this stage is that new behaviour must be, to some degree, congruent with the rest of the
behaviour, personality and environment of the learner or it will simply lead to a new round of
disconfirmation (Schein, 1996). In organisational terms, refreezing often requires changes to
organisational culture, norms, policies and practices.

SWOT Analysis-

SWOT analysis of Bajaj Auto Limited analyses the brand/company with its strengths, weaknesses,
opportunities & threats. Bajaj Auto Limited is one of the leading brands in the automobiles sector. The table
below also lists the top Bajaj Auto Limited competitors and elaborates Bajaj Auto Limited segmentation,
targeting, positioning & USP.

Bajaj Auto Limited

Parent Company Bajaj Group

Category Motorcycles, Scooters

Sector Automobiles

Tagline/ Slogan Hamara Bajaj; Distinctly Ahead

USP Wide variety of motorcycles for the average Indian

Bajaj Auto STP

Segment Middle-class people who want a bike that is stylish and gives a good mileage

Target Group Middle class youth from the age bracket of 25-35
Positioning Two-wheelers for every Indian

Product Portfolio

1. Bajaj Avenger 2.Bajaj Discover

3. Bajaj Kawasaki Ninja 4.Bajaj Platina
Brands 5. Bajaj Pulsar

Bajaj Auto SWOT Analysis

Below is the Strengths, Weaknesses, Opportunities & Threats (SWOT) Analysis

of Bajaj Auto Limited. Strengths are:
1. Excellent brand presence and marketing in India make Bajaj Auto a popular
company
2. Extensive research and development focus and highly experienced player in
the motorcycle segment
3. Widespread distribution network of Bajaj Auto across India
4. Bajaj Auto has a wide product range in terms of price, quality and categories
5. Featured in the Forbes Global brands list
Strengths 6. It has more than 9000 people employed in the organization

Here are the weaknesses in the Bajaj Auto Limited SWOT Analysis:
1.Bajaj Auto is still not a global brand despite high volume production
2.Lack of performance bikes like major international brands and sports bikes &
Weaknesses cruisers

Following are the Opportunities in Bajaj Auto Limited SWOT Analysis:

1. 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
2. Cheaper variants for tapping more in the rural segment
3. Premium sports bikes for urban areas
Opportunities 4. Constant growth in the two-wheeler segment

The threats in the SWOT Analysis of Bajaj Auto Limited are as mentioned:
1. Cheaper imports from countries like China can affect business for Bajaj
2. Entry of international brands
Threats 3.Other motorcycle players have a strong brand presence
 Bajaj Auto Limited Competition

Below are the top 7 Bajaj Auto Limited competitors:

1. Yamaha
2. Hero Moto Corp
3. TVS Motors
4. Suzuki Motors
5. Harley Davidson
6. Royal Enfield
Competitors 7. Ducati Superbike

The brand guide table above concludes the Bajaj Auto Limited SWOT analysis along with its marketing and
brand parameters. Similar analysis has also been done for the competitors of the company belonging to the
same category, sector or industry.
Browse marketing analysis of more brands and companies similar to Bajaj Auto Limited. The Brand Guide
section covers SWOT Analysis, USP, STP & Competition of more than 6000 brands from over 20 categories.

PESTEL / PEST Analysis of Bajaj Auto

The PESTEL / PEST Analysis of Bajaj Auto will cover all macro environment factors that impact
Recreational Products - political factors, economic factors, social factors, technological factors,
environmental factors and legal factors. Bajaj Auto (BAJA) is listed on NSE stock exchange and has a
market capital of 786.53B.

What is PESTEL Analysis and Why PESTEL Analysis is Important?

PESTEL Analysis is a strategic management tool that Bajaj Auto management can use to make better
decisions. PESTEL stands for – Political, Social, Economic, Technological, Environmental and Legal
factors that impact the macro environment of the enterprise that it operates in.

Bajaj Auto operates in a dynamic environment where it is influenced by – technological changes,

increasing environmental activism among consumers, government decisions, consumer spending
behavior, collective social trends, increasing regulatory framework for environmental factors, regulatory
framework, and ever evolving legal system.

Bajaj Auto PESTEL / PEST Analysis

WHAT ARE POLITICAL FACTORS IN PESTEL ANALYSIS?
Political factors are often related to the level of intervention and nature of intervention of the local and
national government in the business and economic environment. Government policies and governance
system plays a huge role in nature and objectives of the policies.

Political Factors that Impact Bajaj Auto

- Other stakeholders such as non-government organizations, protest & pressure groups, activist
movements play critical role in policy making in India. Bajaj Auto should closely collaborate with these
organizations so that it can contribute better to the community goals as well as with corporate goals.

- Governance System – The present governance system in India has served its purpose for the long time
and I don’t think much will change in the process even though it may throw up leaders that can lead
divergent policy making from the historical norm. Bajaj Auto has to keep a close eye on the industry
wide government priorities to predict trends.

- Changing policies with new government – Studying the current trends it seems that there can be a
transition of government in India in next election. Bajaj Auto has to prepare for this eventuality as it will
lead to change in governance priorities of Consumer Cyclical sector.

- Political stability in the existing markets – Bajaj Auto operates in numerous countries so it has to make
policies each country based on the Recreational Products industry specific requirements. Given the recent
rise in populism across the world I believe that India can see similar trends and may lead to greater
instability in the India market.

- Government resource allocation and time scale – The India new government policies can improve the
investment sentiment in the Consumer Cyclical sector. Given the wider acceptance of the suggested
policies among population, it is safe to assume that the time scale of these policies will be longer the
mandated term of the present India government.
- Armed Conflict – There are no imminent threats to India from the disruption in the business
environment because of military policies, terrorist threats and other political instability. Bajaj Auto has
experience of handling operations in difficult circumstances.

Economic Factors that Impact Bajaj Auto

- Downward pressure on consumer spending – Even though the consumer disposable income has remain
stable, the growing inequality in the society will negatively impact consumer sentiment and thus impact
consumer spending behavior.

- Availability of core infrastructure in India – Over the years India government has increased the
investment in developing core infrastructure to facilitate and improve business environment. Bajaj Auto
can access the present infrastructure to drive growth in sectorname sector in India.

- Efficiency of financial markets in India – Bajaj Auto can access vibrant financial markets and easy
availability of liquidity in the equity market of India to expand further globally.

- Inflation rate – The easy liquidity in the market post the great recession of 2018 will lead to increasing
inflation in the India economy.

- Economic Cycles – The performance of Bajaj Auto in India is closely correlated to the economic
performance of the India's economy. The growth in last two decades is built upon increasing
globalization and utilizing local resources to cater to global markets.

- Increasing liberalization of trade policy of India can help Bajaj Auto to invest further into the regions
which are so far offlimits to the firm.

Social Factors that Impact Bajaj Auto

- Attitude towards health and safety – With increasing liberalization the attitude towards health and safety
are getting lax. Bajaj Auto needs to stay away from these attitudes as the cost of failure is too high in
India.
- Leisure interests – the customers in the India are giving higher preferences to experiential products
rather than traditional value proposition in Consumer Cyclical sector. Bajaj Auto can leverage this trend
to build products that provide enhanced customer experience.

- Power structure – There is an increasing trend of income inequality in India. This has altered the power
structure that has been persistent in the society for over last 6-7 decades.

- Education level – The education level is high in India especially in the Bajaj Auto sector. Bajaj Auto
can leverage it to expand its presence in India.

- Societal norms and hierarchy – the society of India is different from the home market of Bajaj Auto. It
should strive to build a local team that understands the societal norms and attitudes better to serve the
customers in India.

- Gender roles – The gender roles are evolving in India. Bajaj Auto can test various concepts to cater to
and support these evolving gender roles in India society.

Technological Factors that Impact Bajaj Auto

- 5G and its potential – Bajaj Auto has to keep a close eye on the development and enhancement of user
experience with increasing speed and access. This can completely transform the customer user experience
in the Recreational Products industry.

- Intellectual property rights and patents protection – If India have higher safeguards for IPR and other
intellectual property rights then more and more players are likely to invest into research and
development.

- Maturity of technology – The technology in the Recreational Products sector is still not reached
maturity and most players are vying for new innovations that can enable them to garner higher market
share in India.

- Technology transfer and licensing issues for Bajaj Auto – In the Consumer Cyclical sector there is no
strong culture of technology transfer and companies often are reluctant to transfer or license technologies
for the fear of creating competitors out of collaborators.
- Latest technology based innovations implemented by competitors of Bajaj Auto – This can provide a
good insight into what the competitors are thinking and where Recreational Products business model
future is.

- Research and development investment at both macro level and micro level in India. If there is an
environment of creative disruption and both government and private players are spending resources on
developing new solutions.

Environmental Factors that Impact Bajaj Auto

- Renewable technology is also another interesting area for Bajaj Auto. It can leverage the trends in this
sector. India is providing subsidies to invest in the renewable sector.

- Paris Climate Agreement has put real targets for the national government of India to adhere to. This can
result in greater scrutiny of environmental standards for Bajaj Auto in India.

- Regular scrutiny by environmental agencies is also adding to the cost of operations of the Bajaj Auto.

- Extreme weather is also adding to the cost of operations of the Bajaj Auto as it has to invest in making
its supply chain more flexible.

- Waste management especially for units close to the urban cities has taken increasing importance for
players such as Bajaj Auto. India government has come up with strict norms for waste management in the
urban areas.

- Environmental norms are also altering the priorities of product innovation. In many cases products are
designed based on environmental standards and expectations rather than catering to traditional value
propositions.

Legal Factors that Impact Bajaj Auto

- Business Laws – The business laws procedure that India follows. Are these norms consistent with
international institutions such as World Trading Organization, European Union etc.
- Data protection laws – Over the last decade data protection has emerged as critical part of not only
privacy issues but also intellectual property rights. Bajaj Auto has to consider whether India have a robust
mechanism to protect against data breaches or not.

- Legal protection of intellectual property, patents, copyrights, and other IPR rights in India. How Bajaj
Auto will be impacted if there are not enough protection.

- Employment law in the India and how they are impacting the business model of the Recreational
Products. Can these conditions be replicated or bettered in international market?

- Environment Laws and guides – The level of environmental laws in the India and what Bajaj Auto
needs to do to meet those laws and regulations.

- Health and safety norms in the India and what Bajaj Auto needs to do to meet those norms and what
will be the cost of meeting those norms.

Findings

Bajaj Auto India announced a new brand identity recently, and have taken the opportunity to outline the
plans the brand has in the country and the direction that they intend to take to expand their presence in
the domestic market. From Electric Vehicles, the Qute quadricycle and even KTM-owned Husqvarna
Rajiv Bajaj outlined Bajaj Auto’s future plans for the country. Here are the top 5 things you need to
know.

1.New Brand Image

Their new brand image that will operate under the tag line “ Worlds favourite Indian” stressing on the
brand’s popularity in the 70 countries across the world where they sell their products. This new identity is
accompanied by a new TVC that shows glimpses of the countries and the products that they have sold in
various countries across the world. Leading the address, was Managing Director at Bajaj Auto also
discussed the brand's entry into electric vehicles as well as how they would manage the impending shift
to BS6 compliant vehicles.
2.Qute Quadricycle

Through the conference, Bajaj touched the subject of the quadricycle the Qute, which is expected to hit
the Indian market in March this year. Pitched as a safer alternative to auto-rickshaws the Qute has since
its inception had troubles with getting homologation for Indian roads. However, Bajaj Auto is still
confident about the relevance of their product and plan to bring an electric version of the quadricycle to
India next year. At about the same time, Bajaj will also launch a series of electric three-wheelers for the
Indian market.
3.Six New Husqvarna Bikes in 2019

That aside, Rajiv Bajaj also spoke about other brands that have come under Bajaj in recent years,
including KTM-owned 'Husqvarna' motorcycles that is slated to enter the Indian market this year with at
least 6 motorcycles. He expressed tremendous confidence in the brand saying that it had even more
potential than KTM, not only in Indian markets but across the globe.
4.Bajaj Electric Scooters & EVs

Bajaj also said while the company had set its sights on the electric marker, it would not yield results
overnight, saying that new technology, presents new uncertainties which would need to be addressed
before the company made any final decisions. He also exemplified the urgent need for electric cars
saying that ‘This we need to do not only for India but for many of our other markets as well. The problem
of pollution and congestion and the need for EVs shared and connected mobility is there, too."

5.Domestic Sales & Market Share:

While Bajaj may have strong market presences in other countries across the globe with as much as 70%
market share in Bangladesh and around 50 per cent in Nepal and Sri Lanka, its presence in India in recent
years has been lukewarm. However, the companies MD is certain that this phase has passed the company
has added almost 6-7 per cent market share to its domestic motorcycle market. This is double of
Yamaha's bike market share in its 35 years of presence in India, an equivalent of TVS Motor Co's
lifetime market share and Honda Motorcycle and Scooter India's motorcycle market share since parting
ways with Hero in 2010, Bajaj said.

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