Bajaj Auto Ltd is the second largest producer of two-wheelers in India, a drop from their preliberalisation position of being market leaders. They are, however, the largest exporters in this segment, which is in part due to the recent strategies that they have followed, including a shift towards more R&D intensive investment, and an attempt to cater to all segments of the society. In this report, we propose to present a holistic view of the automobile industry, mentioning the various challenges and opportunities available, and Bajaj’s role in the same. We start out with looking at Bajaj’s current position in the two-wheeler market, and analyse that with respect to the current macro-economic scenario (in terms of the PEST analysis) and the industry scenario (in terms of Porter’s Five Forces Model). We also map the changes in PEST to changes in the Five Forces and analyse Bajaj’s strengths and weaknesses with respect to these. Thereby, we find out whether these changes can be exploited by Bajaj and give our recommendations as to what their future strategy should be. Our analysis comes up with the conclusion that the two wheeler industry, though it is facing a slight downturn today, is still highly lucrative and is likely to provide immense future potential for Bajaj, as is evident from the forecasts for the industry. Accordingly, we make several strategic recommendations which we expect would give Bajaj competitive advantage over other players, and would enable them to regain their strong hold on the two-wheeler industry.

Contents

INTRODUCTION

BAJAJ AUTO came into presence on November 29,1945 as M/s Bachraj Trading Corporation private limited. They started fresh by selling two and three wheeler in India and obtained a license from Government of India to manufacture 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 vehicle in a single financial year. In 1985,it started manufacturing at Waluj close Aurangabad. In 1986,it be able to to produce and sell 500,000 vehicle in a single business year. In 1995,it rolled out its ten millionth vehicle and manufactured and sold 1 million vehicle in a year.

The company is headed by Rahul Bajaj who is worth more than US$1.5 billion.According to the author of Globality : competing with Everyone from Everywhere for Everything, Bajaj has grown task in 50 countries by creating a line of value -for-money bikes targeted to the different preference of entry- level buyers.