Cost/price/monitoring
Bajaj should concentrate more at reducing the costs and thereby translate this in the price of the vehicle. The cost if controlled shall help it in competing against competitions. Bajaj is about to launch its chopper style Eliminator motorcycle. It has been successful to a certain extent in reducing the costs at its Akrudi pant, and this needs to be done for the Valuj plant as well.
Technological upgradation
Bajaj should plan for upgrading in technical performance with a manufacturer who has the desired expertise and the technology for making the power bikes. Although, Bajaj is already in technological collaboration with the Kawasaki of Japan, which is a leader in the high displacement engines. Similarly Hero Honda is in collaboration with the Honda of Japan that is a pioneer in both high and low displacement fuel-efficient engine. New players like Kinetic Engineering and Kanpur based LML are coming into the picture and the competition is bound to increase. In such a scenario the company should be proactive rather than being reactive
TargetMarket
Bajaj is targeting only the niche market of the upwardly mobile biker type. To quantify this, it forms a very small part of the over all market segment. What bajaj should do is that it must come up with both high displacement and low displacement motorcycles that could cater not only to the upwardly mobile biker type but also to the general customer. It must launch bikes that are both fuel-efficient and are not highly priced.
DealerPreparedness
The company must ensure that the dealers are well aware of the product when it is launched and the dealers are equipped to provide the after sales services as well. There is a general complain from the dealers that by the time they come to know of a product in totality, the company launches a new product. So to ensure that no such complaints arise the dealers must be asked to do a prior homework. With the launch of products with new technologies, proper training must also be imparted to the employees at the dealerships.
The Indian two-wheelers industry can be broadly classified into three major segments, namely
• Scooters
• Motorcycles
• Mopeds.
History of two wheelers in India:
The Indian two-wheeler industry made a small beginning in the early 1950’s when Automobile Products of India (API) started manufacturing scooters in the country. Until 1958, API and Enfield were the sole producers.
In 1948, Bajaj Auto began trading in imported Vespa scooters and three-wheelers. Finally, in 1960, it set up a shop to manufacture them in technical collaboration with Piaggio of Italy. The agreement expired in 1971.
In the initial stages, API dominated the scooter segment; Bajaj Auto later overtook it. Although various government and private enterprises entered the fray for scooters, the only new player that has lasted till today is LML.
Under the regulated regime, foreign companies were not allowed to operate in India. It was a complete seller market with the waiting period for getting a scooter from Bajaj Auto being as high as 12 years.
The motorcycles segment was no different, with only three manufacturers viz Enfield, Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the Rajdoot were two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initially dominated the motorcycle segment.
The two-wheeler market was opened to foreign competition in the mid-80s. And the then market leaders - Escorts and Enfield - were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel-efficient low power bikes, demand swelled, resulting in Hero Honda - then the only producer of four stroke bikes (100cc category), gaining a top slot.
The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and Hero Honda brought in the first two-stroke and four-stroke engine motorcycles respectively. These two players initially started with assembly of CKD kits, and later on progressed to indigenous manufacturing. In the 1990’s the major growth for motorcycle segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25% CAGR in the last five years
.
The industry had a smooth ride in the 1950’s, 1960’s and 1970’s when the Government prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 1980’s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mn vehicles in 1990.
The entry of Kinetic Honda in mid-eighties with a variometric scooter helped in providing ease of use to the scooter owners. This helped in inducing youngsters and working women, towards buying scooters, who were earlier inclined towards moped purchases. In the 1990’s, this trend was reversed with the introduction of scooterettes. In line with this, the scooter segment has consistently lost its part of the market share in the two-wheeler market.
In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles. Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94. Hero Honda showed a marginal decline in 1992.
The reasons for recession in the sector were the incessant rise in fuel prices, high input costs and reduced purchasing power due to significant rise in general price level and credit crunch in consumer financing. A factor like increased production in 1992, due to new entrants coupled with the recession in the industry resulted in companies either reporting losses or a fall in profits.
India is one of the very few countries manufacturing three-wheelers in the world. It is the world's largest manufacturer and seller of three-wheelers. Bajaj Auto commands a monopoly in the domestic market with a market share of above 80%, the rest is shared by Bajaj Tempo, Greaves Ltd and Scooters India.
The total number of registered two-wheelers and three-wheelers on road in India, as on March 31, 1998 was 27.9mn and 1.7mn respectively. The two-wheeler population has almost doubled in 1996 from a base of 12.6mn in 1990.
Bajaj should concentrate more at reducing the costs and thereby translate this in the price of the vehicle. The cost if controlled shall help it in competing against competitions. Bajaj is about to launch its chopper style Eliminator motorcycle. It has been successful to a certain extent in reducing the costs at its Akrudi pant, and this needs to be done for the Valuj plant as well.
Technological upgradation
Bajaj should plan for upgrading in technical performance with a manufacturer who has the desired expertise and the technology for making the power bikes. Although, Bajaj is already in technological collaboration with the Kawasaki of Japan, which is a leader in the high displacement engines. Similarly Hero Honda is in collaboration with the Honda of Japan that is a pioneer in both high and low displacement fuel-efficient engine. New players like Kinetic Engineering and Kanpur based LML are coming into the picture and the competition is bound to increase. In such a scenario the company should be proactive rather than being reactive
TargetMarket
Bajaj is targeting only the niche market of the upwardly mobile biker type. To quantify this, it forms a very small part of the over all market segment. What bajaj should do is that it must come up with both high displacement and low displacement motorcycles that could cater not only to the upwardly mobile biker type but also to the general customer. It must launch bikes that are both fuel-efficient and are not highly priced.
DealerPreparedness
The company must ensure that the dealers are well aware of the product when it is launched and the dealers are equipped to provide the after sales services as well. There is a general complain from the dealers that by the time they come to know of a product in totality, the company launches a new product. So to ensure that no such complaints arise the dealers must be asked to do a prior homework. With the launch of products with new technologies, proper training must also be imparted to the employees at the dealerships.
The Indian two-wheelers industry can be broadly classified into three major segments, namely
• Scooters
• Motorcycles
• Mopeds.
History of two wheelers in India:
The Indian two-wheeler industry made a small beginning in the early 1950’s when Automobile Products of India (API) started manufacturing scooters in the country. Until 1958, API and Enfield were the sole producers.
In 1948, Bajaj Auto began trading in imported Vespa scooters and three-wheelers. Finally, in 1960, it set up a shop to manufacture them in technical collaboration with Piaggio of Italy. The agreement expired in 1971.
In the initial stages, API dominated the scooter segment; Bajaj Auto later overtook it. Although various government and private enterprises entered the fray for scooters, the only new player that has lasted till today is LML.
Under the regulated regime, foreign companies were not allowed to operate in India. It was a complete seller market with the waiting period for getting a scooter from Bajaj Auto being as high as 12 years.
The motorcycles segment was no different, with only three manufacturers viz Enfield, Ideal Jawa and Escorts. While Enfield bullet was a four-stroke bike, Jawa and the Rajdoot were two-stroke bikes. Enfield 350cc bikes and Escorts 175cc bike initially dominated the motorcycle segment.
The two-wheeler market was opened to foreign competition in the mid-80s. And the then market leaders - Escorts and Enfield - were caught unaware by the onslaught of the 100cc bikes of the four Indo-Japanese joint ventures. With the availability of fuel-efficient low power bikes, demand swelled, resulting in Hero Honda - then the only producer of four stroke bikes (100cc category), gaining a top slot.
The first Japanese motorcycles were introduced in the early eighties. TVS Suzuki and Hero Honda brought in the first two-stroke and four-stroke engine motorcycles respectively. These two players initially started with assembly of CKD kits, and later on progressed to indigenous manufacturing. In the 1990’s the major growth for motorcycle segment was brought in by Japanese motorcycles, which grew at a rate of nearly 25% CAGR in the last five years
.
The industry had a smooth ride in the 1950’s, 1960’s and 1970’s when the Government prohibited new entries and strictly controlled capacity expansion. The industry saw a sudden growth in the 1980’s. The industry witnessed a steady growth of 14% leading to a peak volume of 1.9mn vehicles in 1990.
The entry of Kinetic Honda in mid-eighties with a variometric scooter helped in providing ease of use to the scooter owners. This helped in inducing youngsters and working women, towards buying scooters, who were earlier inclined towards moped purchases. In the 1990’s, this trend was reversed with the introduction of scooterettes. In line with this, the scooter segment has consistently lost its part of the market share in the two-wheeler market.
In 1990, the entire automobile industry saw a drastic fall in demand. This resulted in a decline of 15% in 1991 and 8% in 1992, resulting in a production loss of 0.4mn vehicles. Barring Hero Honda, all the major producers suffered from recession in FY93 and FY94. Hero Honda showed a marginal decline in 1992.
The reasons for recession in the sector were the incessant rise in fuel prices, high input costs and reduced purchasing power due to significant rise in general price level and credit crunch in consumer financing. A factor like increased production in 1992, due to new entrants coupled with the recession in the industry resulted in companies either reporting losses or a fall in profits.
India is one of the very few countries manufacturing three-wheelers in the world. It is the world's largest manufacturer and seller of three-wheelers. Bajaj Auto commands a monopoly in the domestic market with a market share of above 80%, the rest is shared by Bajaj Tempo, Greaves Ltd and Scooters India.
The total number of registered two-wheelers and three-wheelers on road in India, as on March 31, 1998 was 27.9mn and 1.7mn respectively. The two-wheeler population has almost doubled in 1996 from a base of 12.6mn in 1990.