Realigning Manufacturing StrategyProject By:Shraddha Nimse – 31Mihir Shah – 45Sidhant Shah – 47Sachin Sharma – 48Vishal Shroff – 51Neha Wadhwa – 59

About the Company:Bajaj Auto Ltd

• India's largest and the world's 4th largest two- and three-wheeler maker.

• Bajaj Auto came into existence on November 29, 1945.

• Present Chairman – Rahul Bajaj• Present Net Income - 30.45 billion

Summary of the Case:Bajaj Auto Ltd

• Establishment – 1945• Market Leader in 2 wheelers (scooters) till the

trend changed in favor of motor cycles• Due to competitiveness reasons planning to

shut down Akurdi Plant• Shift production of scooter & motorcycle to

Waluj (Aurangabad)

Summary of the Case:Bajaj Auto Ltd

• 3 manufacturing facilities – Waluj, Chakan & Pantnagar

• Benefits at Pantnagar - Tax exemption- Mass Production 2000units daily of 100cc

bikes (Platina)

Decision to close down Akurdi Plan:Bajaj Auto Ltd

• Competition & Operational Efficiency

• Unproductive plant• Lack of Government

Support• Increased Cost of

ProductionAPPROPRIATE DECISION TO CLOSE DOWN

Effects to realign the strategies:Bajaj Auto Ltd

POSITIVE:• Plant at Pantnagar - capacity to produce 1

million bikes annually

• Tax exemption at Pantnagar

• Savings – Rs.5000 to 6000 per Bike

Effects to realign the strategies:Bajaj Auto Ltd

NEGATIVE:• 2,730 workmen at Akurdi refuse to accept the

voluntary retirement scheme (VRS)

• Shut down of many spare part manufacturers at Chakan

Financial Strategies:Bajaj Auto Ltd

• Shifted plant from Akurdi which saved major taxes and Octroi Charges

• Per unit cost reduction – Rs. 5000 – Rs. 6000

Managerial Style:Bajaj Auto Ltd

• The company has been strengthened and enhanced to ensure greater operational empowerment and effective management.

• The new structures (Strategic units) are R&D, Engineering, Two Wheeler Business Unit, and Commercial Vehicles Business Unit & International Business Unit.

Marketing Recommendations:Bajaj Auto Ltd

• Company should keep focusing on the fast growing motorcycle segment.

• In view of the new threat posed by Honda Motors in the scooter segment, the company needs to review its products line-up and launch new products to cater the changed demand.

• The company needs to tap the export market more efficiently as there is a huge potential to make India as the world's two-wheelers production base.

• It needs to target the young age group more effectively as this group is extremely trend savvy.