Two-Wheeler Industry Strategy Implementation: Group Project

Group No. 3 Amit Singh 10PGDM065 Prakhar Singh Chauhan 10PGDM096 Sanjeet Kumar 10PGDM102 Sumegh Kulshrestha 10PGDM109 Sunny Lyngdoh 10PGDM110 Date of Submission: 7 SEP 2011
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Supreet Kaur 10PGDM111

Table of Contents
Executive Summary .................................................................................................. Introduction .............................................................................................................. Company Profile ........................................................................................................ Marketing Mix for Bajaj Auto .................................................................................... Industry Analysis ........................................................................................................ Core Competence ...................................................................................................... SWOT Analysis ........................................................................................................... Competitor Analysis ................................................................................................. Strategic Options ...................................................................................................... Strategic Objectives .................................................................................................. Rollout Plan ............................................................................................................... Contingency Plan ...................................................................................................... References ................................................................................................................. 3 4 4 5 9 10 10 11 14 15 16 17 17

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EXECUTIVE SUMMARY
Bajaj Auto Ltd has been the number two player in the Indian two-wheeler industry behind Hero Honda (now Hero MotoCorp) for the past decade or so, ever since slipping behind because of falling sales of its scooters. The company has since then shifted its focus completely to motorcycles, and has achieved success in the premium segment with the Pulsar range. Its other major motorcycle is the Discover, and together these two form the two-model strategy that Bajaj is currently pursuing. Hero MotoCorp, meanwhile, is leading the pack thanks mainly to its best-selling model, the Splendor. With the Splendor and other entry-level motorcycles, Hero has grabbed the lion s share of the 100-125cc segment, and that s where the volumes are coming from. Honda has also become a serious competitor to Bajaj; having made its presence felt in India with its scooters, Honda is now beginning to aggressively pursue bikers. The other major player in the industry, TVS Motors, is also seeking to increase its pan-India presence. To increase domestic volumes and make a bid to regain the numero uno status in the Indian two-wheeler industry, Bajaj Auto must come up with better products for the rural market. At the same time, it must strengthen its performance bikes portfolio, for its rivals are preparing to attack on that front. The third point that Bajaj must consider is re-entering the scooter segment; sales figures are encouraging and Bajaj might be making a mistake by positioning itself as a motorcycles-only firm. This report suggests a rollout plan that can help Bajaj Auto increase its market share (by volumes) and topple Hero as India s largest two-wheeler manufacturer by 2015.

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Introduction
The two-wheeler industry in India has experienced a trend of increasing demand over the past few years. Having been in existence for over 50 years, Bajaj Auto, though a leading company in the sector, has not been able to occupy the spot of the market leader for over a decade now. This report formulates a strategy that may enable Bajaj Auto to achieve the targeted position and also suggests a rollout plan. This report also highlights some of the key competencies that Bajaj can leverage to boost sales and increase its customer base.

Company Profile
Founded way back in 1926 by Jamnalal Bajaj, the Bajaj group is one of the oldest and most respected business houses of India. Bajaj Auto is the flagship company of the Bajaj group and manufactures motorcycles and three-wheelers. Bajaj Auto is ranked as the world's fourthlargest two- and three-wheeler manufacturer and the Bajaj brand is well-known across several countries in Latin America, Africa, Middle East, South Asia and South East Asia. Kamalnayan Bajaj took over the business from his father in 1942 and consolidated its manufacturing. In 1959, it obtained a licence from the Government of India to manufacture two- and three-wheelers and it went public in 1960. The present chairman of the group, Rahul Bajaj, took charge of the business in 1965. 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. Under his leadership, the turnover of Bajaj Auto has gone up from Rs 72 million to Rs 120 billion, its product portfolio has expanded and the brand has found a global market. 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 one million vehicles in a year. Over the past decade Bajaj has transformed itself into a true two-wheeler manufacturing company from a mere scooter manufacturer. In fact, so radical has been the transformation that Bajaj has done away with the scooter segment completely. Its product range encompasses motorcycles of various specifications. With the introduction of a few new models in the past few years the numbers have really gone up for Bajaj. Its current worth is more than $1.5 billion. Currently Bajaj Auto manufactures five ranges of motorcycles, viz. Avenger, Pulsar, Discover, Platinum and Ninja (sold under the Kawasaki name). Within a range there are different variants based upon the engine displacement. Bajaj also had a technical collaboration with Kawasaki for several years; as per that agreement, motorcycles were sold under the Kawasaki Bajaj brand name. The agreement no longer exists, and the Kawasaki-Bajaj partnership is now limited to the production and sale of the Ninja in India. Its three wheelers have a strong foothold in the goods carriers and passenger carriers segments. Bajaj has established itself in more than 50 countries by being a player that targets entry-level users with its low-cost products. In the 2011 Forbes Global 2000 list Bajaj Auto features at the 1639th position.
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The company is now planning to manufacture low-cost cars. It aims to come up with a $2500 car. The project has kicked off in collaboration with Renault-Nissan. This car will compete directly with the Tata Nano. If successful it will be the first venture of Bajaj Auto in the fourwheeler industry. Bajaj has been quite active on promoting itself sincerely as a company that is extremely sensitive to the environment it operates in. The company believes in sustainable and inclusive growth and well-being. Many of its CSR activities have been inclined towards this objective. It also started a distinctively green movement which was meant to ensure that pollution emissions decrease to radically low levels and they achieve success in coming up with an ecofriendly vehicle. To a large extent they have been successful in doing so.

Marketing Mix for Bajaj Auto

Product: There are various segments where Bajaj Auto is trying to serve. It is trying to target lower level segment with Bajaj Platina (100cc) and Bajaj Discover which targets the middle segment customers. Apart from this the premium is served by Bajaj Pulsar (200cc) and Bajaj Avenger. The largest maker of premium bikes, in the country, which currently sells only 100cc bike, is already working on a plan to launch another low-cost bike, the biggest motorcycle segment in the country. 100 cc Discover 100 Platina 100 125-135 cc Discover 125 Platina 125 Pulsar 135 LS 150-180 cc Discover 150 Pulsar 150 DTS-i Pulsar 180 DTS-i 220-250 cc Avenger 220 DTS-i Pulsar 220 DTS-i Ninja 250R 650 cc Ninja 650R

Price: At present, as per the ex-showroom (Delhi) prices, Bajaj motorcycles may be classified as under: Rs 32,00042,000 Platina 100 Platina 125 Discover 100 Rs 42,00052,000 Discover 125 Discover 150 Pulsar 135 LS Rs 52,00062,000 Pulsar 150 DTS-i Pulsar 180 DTS-i Rs 62,000Rs 2 lakh- Rs 4 lakh72,000 3 lakh 5 lakh Avenger 220 DTS-i Ninja 250R Ninja 650R Pulsar 220 DTS-i

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Place: Bajaj Auto has got showrooms evenly spread all over India. It also sells its premium segment bikes through Probiking showrooms owned by the company. Over the past few years, Bajaj Auto has restructured its marketing and distribution network to address the different requirements of the urban and rural markets. The company launched its high-end bike dealership Probiking in 2005 and then began the process of categorising its dealership network into urban and rural dealerships. While Probiking was meant as a channel for Bajaj s high-end bikes, the rest of the company s two-wheeler dealer network was split into rural and urban. This was done to cater to the different needs of the rural and urban customer in terms of product, infrastructure, working capital, financing and servicing. At the same time, the company has been equally focused on the distribution of its high-end bikes; when the number of Probiking showrooms stood at 21 in 2009, it planned to double that number by this year. Amit Nandi, GM (Marketing & Probiking) of Bajaj Auto had said at the inauguration of the 21st Probiking showroom: "The Bajaj Probiking showrooms will definitely be one of the integral elements in our overall brand strategy to reinforce the image of Bajaj being a manufacturer of quality performance motorcycles in the country. It's the retail experience a dedicated biker feels when he or she steps into a Probiking outlet. It's a new space we have created and there's a lot of work to be completed." As part of its marketing strategy, Nandi had said that all high-end motorcycles from the company's stable, including those from Kawasaki and KTM, would be available only at the Probiking outlets. Bajaj had announced towards the end of 2010 that they would add 130 new dealers, largely in small towns, taking the total number to more than 600 dealerships across India. The selection of the dealers was completed by end of December 2010 and letters of intent issued in the first week of January. The objective for the expansion exercise was to rapidly cover key emerging markets, strengthen existing markets and also to increase sales and market share. The company was also simultaneously upgrading its service centres to enhance the quality standards required to support the advanced DTS-i (Digital Twin Spark ignition) technology used in Discover and Pulsar. Around 1100 service centres were being upgraded at an investment of more than Rs 18 crore to enhance the service standards. Regarding this development, S. Sridhar, president, motorcycle business, Bajaj Auto, had said: "The target of appointing 130 quality dealers, a task which usually takes around 9-12 months will be completed in the short span of 4 months with the use of Internet and delegation through a layered selection process with extremely tight deadlines for both company personnel and applicants. This was the first time we used our website for such an application to reach out to so

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many prospective business associates and so successfully. Instant decisions on field by senior management were the key to the quick selection process."

Promotion: Bajaj is a brand known to most Indians. Its brand awareness can be matched only by the likes of Tata and Maruti. The Bajaj brand has a heritage which has served generations. It has given many sub-brands to India from Chetak, Priya and Super to Caliber, Pulsar and Discover. As Indian consumer preferences changed over the years, Bajaj s promotion strategies followed suit. In the days when it was king thanks to its scooters, Bajaj had become a household name on the back of its Hamara Bajaj campaign, invoking trust and reliability. With its Buland Bharat ki Buland Tasveer tagline, it sought to associate itself with a rising nation. But as rivals slowly but surely adapted themselves to changing consumer tastes and introduced motorcycles that would go on to become bestsellers, Bajaj s focus began shifting from scooters to bikes, and it launched models such as the Boxer and Caliber. In 2001, a new ad was launched by Bajaj which not only showed their diverse product range but also had a touch of modernity conveying that they were changing and adapting. The core values remained the same; Hamara Bajaj was still there. The brand personality was modernised somewhat, but with all its emotional and Indian values intact. That year was not only the year of this ad but also the year of a new Bajaj. 2001 saw the launch of the Pulsar, which changed the way Indians looked at bikes. The CBZ had been launched by Hero Honda in 1999, which showed there was an untapped market in India for performance bikes. Pulsar was launched successfully with the Definitely Male campaign. Bajaj did not go for the Hamara Bajaj tagline for Pulsar, and wisely so, since the two personalities were very different. Till 2007, Bajaj kept on growing in the bike segment as did the Indian market as such. Scooters became a thing of the past, and the Chetaks, Vespas and Priyas were all out of Indian roads. Only scooters like the Activa remained. In 2007, Bajaj repositioned itself from Hamara Bajaj to Distinctly Ahead . Distinctly Ahead comprised three core values: speed, innovation and perfection. The Distinctly Ahead vision was communicated through an all-new commercial. A break from the past, the communication was fast-paced and aggressive and symbolized all that Bajaj Auto stood for. With one Pulsar 220 DTS-Fi morphing into many other Pulsar 220 s and racing against each other, the visualization

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and lyrics Alag Andaaz, Alag hai khoj, Rakhe Aage, Hamari soch set its own standards and competed only with itself.

clearly conveyed that Bajaj

Since then Bajaj has completely ended the Hamara Bajaj campaign and are committed to the Distinctly Ahead theme. All subsequent ads and marketing communication have been based on this theme. In the new promotion strategy that Bajaj has incorporated, it has dropped the association of the name Bajaj with its models and is promoting the different bikes as individual brands and identities. Using tie-ups with TV shows such as Stuntmania, and taglines and websites dedicated to the individual bikes and its fan following, they are trying to target the true bike enthusiasts and the DIY (do-it-yourself) crowd, who like to modify and service their own bikes. There is a clear move away from the use of brand ambassadors. Bajaj Auto is focused on the bikes as individual brands and is creating personas to fit the target audience. A clear indication of this lies in the fact that the print media and online media rarely show the name Bajaj and instead focus on the brand of the bike and the tagline. Only the new Bajaj logo is shown alongside; in many cases, especially with the Pulsar, even the logo is absent. This sets them distinctly apart from the competition where the company name is always extensively used along with the brand names. Some of the taglines used: y y y y y Avenger: Feel like God Pulsar 220: The fastest Indian Ninja: Refined aggression Discover: More excitement per litre (sporadically used) Platina: Dumdaar Sawari

The different brand names, without the Bajaj logo attached:

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Industry Analysis: Porter s Five Forces Analysis

Threat of new entrants Entry barriers are high; the capital and expertise needed to set up a two-wheeler manufacturing facility would be a great enough barrier to prevent many new entrants from setting up. The need for technical expertise is high. Owning a strong distribution network is important and is very costly. However, given India's incredible growth forecasts, infrastructure progress (especially new and better roads), and ever-expanding financing options to rural residents, the market is attractive. As such, we expect the threat of new entrants to be moderate to high. Supplier Bargaining Power Suppliers of auto components are extremely critical for this industry since most of the component work is outsourced. It is likely that the suppliers to the manufacturers have considerable bargaining power. They are not held ransom by one single manufacturer as they can market their products to any of the others in India. Due to the fragmented nature of the suppliers, proper supply chain management is a costly yet critical need. Buyer Bargaining Power Buyers in India have a wide variety of choice. There are more than five foreign brands selling in India (including the high-end ones such as Ducati), apart from local manufacturers. Of course there are also a plethora of incredibly cheap choices, like the CD Dawn and TVS Sport. With more models to choose from in almost all categories, the market forces have empowered the buyers to a large extent. With the launch of the Tata Nano, buyer power has become somewhat strengthened, and is expected to strengthen further with the introduction of more low-cost cars. Of course, Bajaj Auto itself is working on these lines in collaboration with Renault-Nissan. Industry Rivalry The industry rivalry is extremely high with any product being matched in a few weeks/months by competitor(s). This instinct of the industry is primarily driven by the technical capabilities acquired over years of gestation under the technical collaboration with international players. Competition between manufacturers is cut-throat. Threat of Substitutes There is no perfect substitute to this industry. Cars, which do not directly compete or come in consideration while selecting a two-wheeler, have had a new avatar in the form of Tata Nano. Mopeds do not compete even with the entry-level motorcycles, for even this choice comes at a comparatively higher economic potential.
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Core Competence
The core competence of Bajaj Auto Ltd is its values of innovation, perfection and speed. Both DTS-i (Digital Twin Spark Ignition) and DTS-Fi (Digital Twin Spark Fuel Ignition) are technological breakthroughs. Bajaj Auto is also a pioneer in product innovation having introduced technologies such as ExhausTEC (Exhaust Torque Expansion Chamber), LED Tail Lamps, LCD Display, SNS, Spare parts (Tubeless tyres, rear disc brakes), Black colour scheme etc. Attracting and retaining talented professionals is a key element of their strategy and they believe it to be a significant source of competitive advantage. As Bajaj is particularly focused on tapping the rural and semi-urban sectors for providing finance, the success and growth of the business will depend on the ability to identify, attract, hire, train, retain and motivate skilled regional personnel as they continue to grow.

SWOT Analysis
The competitive position of a company is governed both by the internal and external factors. These factors can even pose threats or bring in opportunities. Having looked at the core competencies and sources of competitive advantage, let s look at their strengths, weaknesses, threats and opportunities. The diagram given below summarizes the interplay between external and internal environmental factors for Bajaj Auto. Strengths: y y y y y y y y Highly experienced management Product design and development capabilities Extensive R&D focus Widespread distribution network High performance products across all categories High export to domestic sales ratio Great financial support network High economies of scale Weaknesses: y y y y Large amount of cash reserves not deployed Bajaj does not have an established brand like the Splendor Not a global player in spite of huge volumes. Not a globally recognizable brand

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Threats: y y y y y The competition catches up with innovation in no time Increasing number of players in the industry Increasing number of models Introduction of low-cost cars Margins squeezing from price and costs

Opportunities: y y y y Double-digit growth in two-wheeler market Unsaturated market above 250cc in motorcycles and in rural market Movement towards higher-end motorcycles Growing world demand for entry-level motorcycles

Competitor Analysis
Bajaj Auto s main competitor is Hero MotoCorp (the erstwhile Hero Honda), which is the largest two-wheeler manufacturer in the world. Other major competitors include TVS Motors and Honda Motorcycle & Scooter India (HMSI), both of which are, in fact, the leading players in the scooter segment. A break-up of the market share in the industry is given below.
Motorcycles (%) FY06 Hero Honda Bajaj Auto TVS Motors HMSI Yamaha Royal Enfield Suzuki M&M* LML Kinetic* TOTAL 99.5 99.9 99.9 100 100 100 1.1 4.2 7.6 100 5.9 100 3.4 100.1 0.5 100 100 100 48.2 30.9 13 1.6 4.2 0.5 FY07 45.8 33.5 13 2.4 3.8 0.5 0.9 FY08 49.4 32.7 9.4 4.3 2.6 0.6 0.9 FY09 52.4 28 9.3 5.9 3 0.7 0.7 FY10 51.9 29.7 7.6 6.2 3.4 0.6 0.6 FY11 48 32.3 8 7.1 3.6 0.5 0.5 2.3 7.1 9.5 4.8 10.9 7.5 FY06 1.5 11.7 24.7 50.3 FY07 9.5 2.1 26.5 56 Scooters (%) FY08 9.7 2 24.2 58.5 FY09 13.3 1 21.2 56.9 FY10 14.4 0.3 20.7 50.3 21.9 42.7 FY11 17

Source: Society of Indian Automobile Manufacturers (SIAM) *Mahindra & Mahindra acquired Kinetic Motor in FY09
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As can be seen, Hero Honda has been the leader throughout, followed by Bajaj Auto in motorcycles segment. But the situation is quite different for the scooter segment with Honda being the leader followed by TVS. In 2006, Bajaj occupied the third place but because of its discontinuation with the scooter, the share deteriorated. The details of the major competitors along with their product categories, strengths, weaknesses and future plans (wherever known) have been outlined below. Hero MotoCorp Position: Leader in the industry since 2001. Distribution Network: 4500 touch points (dealers and sub-dealers) Product Mix: Motorcycles 100 cc CD Dawn CD Deluxe Passion Pro Splendor NXG Splendor+ Splendor Pro 125 cc Glamour Glamour Fi Super Splendor 150 cc Achiever CBZ Extreme Hunk 225 cc Karizma Karizma ZMR Scooters 100 cc Pleasure

Strengths: The 100 cc models; 60% of the 9 million motorcycles sold in India annually come from the 100-110 cc segment. Two million are from the Splendor range alone. Weaknesses: Solo presence post-JV, weak R&D, and margin pressures owing to royalties.

TVS Motors Position: Second in scooters, but well behind Hero and Bajaj in motorcycles. Overall third in industry. Distribution Network: Over 600 dealers; total no. of touch points unknown

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Product Mix: Motorcycles 100-110 cc Jive Sport Star City 125 cc Flame DS Flame SR 160-180 cc Apache RTR FI 160 Apache RTR 160 Hyper Edge Apache RTR 180 Apache RTR 180 ABS TVS Motors also sells mopeds for the lower middle class. Strengths: Leader in south India; mopeds and scooters (where the top two either are absent or have negligible presence). Weaknesses: Traditionally perceived as a South India brand. Future Plans: Will launch a new scooter and a new motorcycle in Q4FY12. 60 cc Scooty Teenz Scooters 90-110 cc Scooty Pep+ Scooty Streak Wego

Honda Motorcycle & Scooter India (HMSI) Position: Market leader in scooters, fourth overall in industry. Distribution Network: 800 touch points (dealers and sub-dealers) Product Mix: Motorcycles 110 cc 125 cc 150 cc CB Unicorn CB Unicorn Dazzler 250 cc Scooters 1000-1200 cc 100-110 cc Activa Aviator Dio

CB Twister CB Shine CBF Stunner CBF Stunner PGM-FI

CBR 250R CB 1000R CBR 1000RR VFR 1200F

Strengths: The Honda Activa, for which demand is so high that there is a 10-month waiting period in some markets. Even Honda s technological expertise is a major strength.

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Weaknesses: Has yet to establish itself as a solo power; distribution network needs much more expansion. Future Plans: With the end of the Hero Honda JV, Honda is now free to launch new models in all engine segments, which it will do in the near future.

Strategic Options
Option 1 Launch a 100 cc bike for rural market within Rs 30,000-35,000. Why: Hero s Splendor range sells two million units annually, and yet market penetration of two-wheelers is only 10 per cent in rural India. Problem area: Existing 100 cc bikes are not good enough for rural roads and the kind of loads they have to carry.

Option 2 Launch a 150 cc bike for rural market under Rs 40,000. Why: Market studies show that customers in rural areas are looking for motorcycles with higher engine capacity, which are better suited to road conditions there. Safety and performance are becoming as important as cost and fuel efficiency. Problem area: 150 cc bikes cost over Rs 50,000. To cut the price tag by Rs 10,000 would require eliminating frills such as digital consoles and LED systems.

Option 3 Manufacture a super bike for export. Why: Leverage Bajaj s lower cost as an OEM supplier to KTM, the European sports bike maker, in untapped global markets like the US, Latin America and Australia. KTM needs to increase its volumes to match Harley Davidson s sales and Bajaj can sell the bikes as an OEM; the cost of manufacturing in India would be much cheaper. The Duke 125, which KTM is selling across various markets, has been developed and manufactured at Bajaj s Chakan plant. Problem area: This will boost profits, but will not help domestic volumes.

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Option 4 Re-enter scooter segment. Why: Scooters being versatile, fuel-efficient, and easy to operate and manoeuvre are witnessing heavy demand in India. In the domestic market, the scooter segment grew at a CAGR of 18% over FY07-FY11, outperforming mopeds (16% CAGR) and motorcycles (9% CAGR). While the high CAGR may partly be attributed to the base effect, another point to note is that domestic scooter segment sales as a percentage of domestic two-wheeler sales have increased from 13% in FY06 to 18% in FY11. This trend is expected to continue and scooter segment sales as a percentage of two-wheeler segment sales are set to increase to 20% by FY14. Problem area: There is currently a disagreement in the top management on this issue. While chairman Rahul Bajaj is in favour of re-introducing scooters (their last product in this segment, Kristal, was discontinued early last year), MD Rajiv Bajaj wants to reinforce the idea that Bajaj is a motorcycle company and is unwilling to re-renter the scooter segment.

Option 5 Enter electric scooters market. Why: Business in electric scooters had dropped due to issues with battery technology and the withdrawal of subsidies. But now that the government has announced a national mission for promoting electric and hybrid vehicles, there is potential in the market. Problem area: At present, demand for the product is low.

Strategic Objectives
Having analysed the industry, the competitors, and the company s current position, and also having evaluated the options available to the top management, the group believes that in the medium term Bajaj Auto ought to meet the objectives mentioned below: y y y y y To become the largest motorcycle manufacturing company by 2015 To increase rural market share To leverage the existing financial arm s services To enter untapped global markets To strengthen the premium range, which at present consists only of Pulsar, by investing more in R&D

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Rollout Plan
Phase 1: Launch a 100 cc bike targeted at the rural market in the price range of Rs 3000035000. This bike would take on the other motorcycles in this price range, such as Hero s CD Dawn and TVS Motors Sport. Currently, the Platina 100 is priced similarly, but the problem with it is that it s positioning is confused. While the price seems to suggest that it is targeted at the rural market, the marketing communication seems to be targeted at the English-speaking urban youth. This could be part of the reason why the Platina has not found enough takers. The positioning of the new bike, therefore, will be clearly rural, with advertisements in Hindi and regional languages establishing an association between the motorcycle and rural aspirations. Phase 2: Introduce a 150 cc bike a year after Phase 1, again targeted at rural segment priced below Rs 42000. This bike would compete against Hero s Splendor range. By pricing it at the same level but offering more in terms of engine power (Splendor falls in the 100-125cc bracket), Bajaj would be seen by the rural customer as providing more value for money. For both Phase 1 and Phase 2, Bajaj Auto will have to: y Leverage the competence of Bajaj Finance (its sister concern) to extend easy financing options to the rural segment. For instance, direct cash collection schemes work well in rural areas where often a customer without a bank account, salary slip or a guarantor prefers to pay the financier a lump sum or a fixed amount any month based on his ration card and voter ID card. Organize demonstrations at mandis, fairs, etc. for promoting these launches. Even today, these traditional modes of advertising are more effective in rural India than print or electronic advertising. Associate the Bajaj name with these bikes; use corporate-level branding unlike the product-level branding strategy being used for the current range. The trust factor is crucial in rural areas and, as mentioned earlier, Bajaj is among the most trusted brands in India, even in the interiors.

These two bikes together should provide a much bigger share of the rural pie to Bajaj. At the same time, the company should not lose focus on its premium bikes. The success of the Pulsar has not gone unnoticed, and Bajaj s rivals are already gearing up to provide new offerings in this segment. The Pulsar is unlikely to sustain its popularity in the long term, so Bajaj s R&D team must be prepared to spruce up its premium basket.

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Contingency Plan
Enter the scooter market. Bajaj might be forced to re-enter the scooter segment to keep volumes up, despite internal conflict on this issue. In fact, if scooter sales continue to rise, Bajaj might not have an option but to compete with the likes of Honda and TVS in this space. One option here could be to target teenage urban males (unlike TVS Scooty s positioning of a scooter for girls) with a robust engine in a gearless scooter.

REFERENCES
1. 2. 3. 4. 5. 6. 7. 8. Business Standard BS Motoring The Economic Times Business Line Afaqs.com The Times of India Smartinvestor.in Moneycontrol.com

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