Overview of the Automobile Industry

A PROJECT REPORT ON

AUTOMOBILE INDUSTRY

IN INDIA

(SPECIAL FOCUS ON

BAJAJ PULSAR BIKES)

SUBMITTED TO :

Prof. Ms.Shivani Bali

(Faculty of QMM )

BY GROUP 1

NIHAREIKA SINHA

PADMADEVI

GAURANG SAHLOT

ISHA VASHIST

SIRAJ SIDDIQUI

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Student Undertaking

We have completed the Study Project titled “Bajaj Bikes-An analysis”

under the guidance of Prof. Ms. Shivani Bali. This is an original piece of

work & we have neither copied and nor submitted it earlier elsewhere.

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TABLE OF CONTENTS

.

1. Acknowledgement……………………………………………

2. Executive Summary…………………………………………..

3. Introduction to the problem…………………………………..

4. Rationale and Scope of Study………………………………..

5. Review of Literature…………………………………………

6. Objective of Study…………………………………………...

7. Research Methodology………………………………………

8. Company Profile……………………………………………..

9. SWOT Analysis ……………………………………………..

10. Data Analysis……………………………………………….

11. Refrences……………………………………………………

12. Questionnaire………………………………………………..

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Acknowledgement

We are extremely grateful to Ms. Shivani Bali for providing us the honor

of carrying out the project, which helped us to put our learning’s into

experience. Without her guidance we would not have been able to proceed

with our project in the right direction.

We would like to express our sincere regards to the staff of LBSIM, New

Delhi, whose help and guidance enables us to know what exactly

consumer’s preference towards television is all about.

We would also like to thank our family friends and relatives who have

helped us and supported us in all possible ways.

A Project report needs co-operation, guidance and experience of many

more other than the persons whose name appears on the cover, we would

like to thank each and everyone who have helped us in our endeavour.

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EXECUTIVE SUMMARY

(Subject to change with the progress of the project)

The project deals with the Analysis of Behavior of people regarding bikes and its different features. The study includes a survey of various mindsets affecting the liking and disliking of bikes. It is being done keeping in mind how these factors will affect it. This will also help the public understand what is affecting their sale and purchase.

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Introduction to the Problem

Spread

Talking about India, the bike market is confined mainly to male gender. So market depends on the perception of

males regarding different bikes.

Preference

Though bikes all over the world are used for fun or leisure travel in India its uses are diverse, ranging from

business (pizza hut, dominos, vegetable vendors), as a family vehicle, load carrying by small time vendors and

normal expected use by youngsters. Depending upon the intended use factors like sturdity, mileage, looks etc.

dominate and guide their choices.

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Rationale and Scope of Study

To gauge the marketing behavior and analyze the data collected by using

mathematical and statistical tools to draw conclusions regarding preferences

of the customers and the sales figures in the bike segment.

Due to geographical and time constraints the scope of the study has been

limited to the Delhi and NCR region and also to Bajaj bikes as the overall 2-

wheeler segment is very large in India.

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REVIEW OF LITERATURE

Article 1 – Marketing research by Jayesh Shah & Saurabh Kishore for academic purposes

OBJECTIVE : To Know The Popularity Of Brands Among Various Segments

Findings : Overall Findings Show That Hero Honda Is The Market Leader In All The Segments Followed By Bajaj And Tvs. Few Other Popular Brands Include Royal Enfield Among Students And Yamaha Among Service And Business Class People.

METHODOLOGY: based on Primary data analysis

Suggestions: Indian market is still price sensitive and goes for better mileage when compared to looks. Also brand awareness is a major factor affecting decision hence important to follow correct campaign trail before launch of a new bike.

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Objective of the research

To find out the consumer preference level and taste across Delhi and NCR region of different segments.

Gauge customer taste and preference for various brands of bikes on available parameters like mileage, style, comfort etc.

What factors guide consumer buying behavior for bikes?

Which is the leading brand in the market and the relative position of the companies from consumer’s point of view?

Identifying possible areas of improvement.

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Product snapshot

HERO HONDA BAJAJ

TVS YAMAHA

Overview of the Two Wheeler Industry – The Bike Segment

The Indian two-wheeler industry has come long way since its humble beginning in 1948 when Bajaj Auto

started importing and selling Vespa Scooters in India. Since then, the customer preferences have changed in

favor of motorcycles and gearless scooterettes that score higher on technology, fuel economy and aesthetic

appeal, at the expense of metal-bodied geared scooters and mopeds. These changes in customer preferences

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have had an impact on fortunes of the players. The erstwhile leaders have either perished or have significantly

lost market share, whereas new leaders have emerged.

Rising income levels, reducing excise duties, higher loan tenure and loan-to-value offered by the financing

companies have all fuelled the growth of two-wheeler sales in the country. Besides, mounting traffic chaos and

limited parking space has also increased the demand for two-wheelers from households that can afford or

actually do own a car. India the second largest market for two wheelers in the world only after China.

Furthermore, with increasing women working population, changing social philosophy and broad-mindedness,

the penetration of two-wheelers is expected to further increase significantly.

The motorcycle has now become one most popular mode of transportation among the Indian middle class

families because of it is cost effective, economical and easy to navigate through the traffic. Moreover, the

people have started preferring bikes instead of scooters and mopeds and today bikes form a major part of the

Indian two wheelers.

Indian companies are one of the largest two wheeler manufacturers in the world. The number one bike

manufacturer in the world, Hero Honda is in close competition with the Indian manufacturer Bajaj India.

The motorcycle industry in India has witnessed a tremendous change in the 90’s with the invention of 4 stroke

engine which makes the bikes more fuel efficient. Further companies are trying to bring in more innovations to

make the motorcycle ride more comfortable, safe and user friendly and economical.

In a nut shell the followings factors can be distinguished for the growth of motorcycle industry in India:

Easy accessibility to cheap consumer loans

The increase in the average income of the family.

The reduction in duties and taxes.

Convenience with regards to commuting as compared to the public transport system.

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Continuous innovations in technology making the bikes economic and fuel-efficient.

The first choice among youths and teenagers.

Key players in the Bike segment :

HERO HONDA MOTORS LTD.

BAJAJ AUTO LTD

TVS MOTOR COMPANY LTD.

KINETIC MOTOR COMPANY LTD.

YAMAHA MOTORS INDIA LTD.

LOHIA MOTORS LTD.

MAJESTIC MOTORS LTD.

ROYAL ENFIELD LTD.

HONDA MOTORS AND SCOOTERS LTD.

RESEARCH METHODOLOGY

Research methodology usually includes how why when and from where data was collected.

Our research data was collected mainly to understand behavior amongst people of Delhi.

- PRIMARY SOURCE DATA

It is a primary source data which will include direct one 2 one collection of data from

consumers based on the above factors.

This objective will be carried out through a generalized and a standard questionnaire.

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- SECONDARY DATA SOURCE

Our secondary source of data usage will be limited.

This will be used only for various details and particulars of bikes. Also we may use these data

sources for help on techniques utilized to analyze our raw data.

Again we may also utilize it for using examples to support our findings, analysis and

conclusions.

This data mainly will be collected from people with different outlooks, mindsets, age and

gender so as to give us a wider scope of study and carry out a competent enough analysis based

on our raw data

COMPANY ANALYSED FOR REPORT: BAJAJ AUTO LTD.

PROFILE OF THE ORGANIZATION

Bajaj Auto is a major Indian automobile manufacturer. It is India's largest and the world's 4th largest two- and

three-wheeler maker. It is based in Pune, Maharashtra, with plants in Akurdi and Chakan (Pune), Waluj (near

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Aurangabad) and Pantnagar in Uttaranchal. Bajaj Auto makes and exports motorscooters, motorcycles and the

auto rickshaw.

The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at 1946.

Over the last decade, the company has successfully changed its image from a scooter manufacturer to a two

wheeler manufacturer. Its product range encompasses Scooterettes, Scooters and Motorcycles. Its real growth in

numbers has come in the last four years after successful introduction of a few models in the motorcycle

segment.

The company is headed by Rahul Bajaj who is worth more than US$1.5 billion and the company worth more

than 46 billion as of January 2009.

Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj Trading Corporation Private Limited. It

started off by selling imported two- and three-wheelers in India. In 1959, it obtained license from the

Government of India to manufacture two- and three-wheelers 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 vehicles in a single financial year. In

1985, it started producing at Waluj in Aurangabad. 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 1 million vehicles in

a year.

Spin-offs and Acquisitions

The demerger of Bajaj Auto Ltd into three separate corporate entities—Bajaj Finserv Ltd (BFL), Bajaj Auto Ltd

(BAL), and Bajaj Holdings and Investment Ltd (BHIL)—was completed with the shares listing on May 26,

2008.

In November 2007, Bajaj Auto acquired 14.5% stake in KTM Power Sports AG (holding company of KTM

Sports motorcycles AG). The two companies have signed a cooperation deal, by which KTM will provide the

know-how for joint development of the water-cooled four-stroke 125 and 250 cc engines, and Bajaj will take

over the distribution of KTM products in India and some other Southeast Asian nations. Bajaj said it is open to

taking a majority stake in KTM and is also looking at other takeover opportunities. On the 8th of January 2008,

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Managing Director Rajiv Bajaj confirmed the collaboration and announced his intention to gradually increase

Bajaj's stake in KTM to 25%.

Products

Some of the models that Bajaj makes (or has made including prototypes) are:

Scooters

Bajaj Kristal DTSi

Cars

Bajaj Lite concept

Bajaj ULC (ultra-low cost)- the Tata Nano competitor.

Motorcycles

Bajaj Platina 100cc

Bajaj Platina 125 DTS-Si

Bajaj Discover 135 DTS-i

Bajaj XCD 125 DTS-Si

Bajaj XCD 135 DTS-Si

Bajaj Pulsar 150 DTSi

Bajaj Pulsar 180 DTSi

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Bajaj Pulsar 220 DTS-i

Bajaj Avenger 200 DTS-i

Competitors

HERO HONDA

Hero Honda Motors Ltd. is a popular motorcycle company in India. This company, started in 1984, was a

successful joint venture between Hero Cycles and Honda Motor Company of Japan.

Since the commencement of the company, Hero Honda has manufactured and sold more than 15 million

motorcycles. The company has established a niche in the competitive Indian and international market for

manufacturing low maintenance and high fuel efficient motorcycles. It’s the no. 1 two wheeler mfg. in the

world.

ROYAL ENFIELD

When it comes to Indian motorcycle, Royal Enfield hits the mind of every Indian motorcycle lovers because it

is one of the premier bike companies in India. This company was founded by the son of George Townsend in

1851 and was further taken over by Albert Edie and R.W. Smith in 1891.

T.V.S MOTORS

TVS Motor Company Ltd and Yamaha Motor India Ltd also have carved a niche in the Indian motorcycle

market. TVS Motor Company, established by T. V. Sundaram Iyengar in 1911, is believed to be the third

largest manufacturer of two-wheeler in India.

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TVS came up with the first two-seater moped in 1980 that eventually defined the dominion of personal

transportation in India. This company entered into a joint venture with Suzuki Motor Corporation of Japan in

1982. This collaboration was the first company to introduce a 100-cc motorcycle in the markets of India

YAMAHA

Yamaha Motor India Ltd. is continuously making efforts to break down the competitive two wheeler market in

India and win the battle with its business strategies. The business strategies and principles of this company is

customer fulfillment through quality service, research and development for introducing high end motorcycles

and optimization of the working system

S.W.O.T ANALYSIS-

STRENGTHS

Product design and development

capabilities.

WEAKNESSES

Hasn't employed the excess cash

for long.

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Extensive R & D focus.

Widespread distribution network.

High performance products across

all categories.

High export to domestic sales

ratio.

Great financial support network

(For financing the automobile)

High economies of scale.

High economies of scope.

Highly experienced management

Still has no established brand to

match Hero Honda's Splendor in

commuter segment.

Not a global player in spite of huge

volumes.

Not a globally recognizable brand

(unlike the JV partner Kawasaki)

OPPORTUNITIES

Double-digit growth in two-

wheeler market.

Untapped market above 180 cc in

motorcycles.

More maturity and movement

towards higher-end motorcycles.

The growing gearless trendy

scooters and scooterette market.

Growing world demand for entry-

level motorcycles especially in

emerging markets.

THREATS

The competition catches-up any

new innovation in no time.

Threat of cheap imported

motorcycles from China.

Margins getting squeezed from

both the directions (Price as well

as Cost)

DATA Analysis

Various techniques have to be applied on the gathered data to actually make sense of it.

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Some of these which can be used are as follows :

Sampling techniques

Primary Data Source Collection and Analysis

Mean, Mode, Median

Graphical methods

Histograms, Bar charts, Pie charts etc.

Various analysis of Frequencies

Standard Deviation

Thus above methods listed are the most contemporary and useful in sensible comprehension of

data.

Questionnaire for Bike Customers

(The findings of this survey will be used only for academic purposes by the students of Lal Bahadur Shastri Institute of Management,New delhi)

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Name of the customer

Age :

18-24

24-30

30-36

ABOVE 36

WHICH BIKE DO YOU OWN PRESENTLY ?

ANUAL HOUSEHOLD INCOME

<I LAKH

1-3 LAKH

3-5 LAKH

5-10 LAKH

>10 LAKH

WHAT IS THE PURPOSE OF YOUR BIKE?

(RATE ON 5 POINT SCALE-5 BEING THE HIGHEST AND 1 BEING THE LOWEST )

OFFICE

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1 2 3 4 5

LOWEST HIGHEST

TRAVELLING

1 2 3 4 5

LOWEST HIGHEST

HOUSEHOLD

1 2 3 4 5

LOWEST HIGHEST

ADVENTURE

1 2 3 4 5

LOWEST HIGHEST

OTHER

1 2 3 4 5

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LOWEST HIGHEST

PLEASE SPECIFY THE OTHER FACTOR

RATE THE KEY FACTORS WHICH AFFECTED YOUR BUYING DECISION?

(5 BEING THE HIGHEST AND 1 BEING THE LOWEST )

MILEAGE

1 2 3 4 5

LOWEST HIGHEST

LOOKS

1 2 3 4 5

LOWEST HIGHEST

BRAND

1 2 3 4 5

LOWEST HIGHEST

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SERVICE

1 2 3 4 5

LOWEST HIGHEST

PRICE

1 2 3 4 5

LOWEST HIGHEST

WHICH OF THE FOLLOWING INFLUENCES YOUR PURCHASE DECISION?


FRIENDS

1 2 3 4 5

LOWEST HIGHEST

FAMILY

1 2 3 4 5

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LOWEST HIGHEST

DEALER

1 2 3 4 5

LOWEST HIGHEST

ADVERTISEMENT

1 2 3 4 5

LOWEST HIGHEST

OTHER FACTORS

1 2 3 4 5

LOWEST HIGHEST

PLEASE SPECIFY THE OTHER FACTOR

WHICH OF THE FOLLOWING MEDIA ARE YOU MOST LIKELY TO NOTICE AN ADVERTISEMENT ?


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TELEVISION

1 2 3 4 5

LOWEST HIGHEST

HOARDINGS

1 2 3 4 5

LOWEST HIGHEST

PRINT MEDIA

1 2 3 4 5

LOWEST HIGHEST

INTERNET

1 2 3 4 5

LOWEST HIGHEST

OTHERS

1 2 3 4 5

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LOWEST HIGHEST

IF OTHERS PLEASE SPECIFY

WHICH BRAND NAME DO YOU FIND EASY TO RECALL?


BAJAJ

1 2 3 4 5

LOWEST HIGHEST

HERO HONDA

1 2 3 4 5

LOWEST HIGHEST

YAMAHA

1 2 3 4 5

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LOWEST HIGHEST

HONDA

1 2 3 4 5

LOWEST HIGHEST

TVS

1 2 3 4 5

LOWEST HIGHEST

RATE THE BIKES ON THE BASIS OF YOUR PREFERENCE?


PULSAR

1 2 3 4 5

LOWEST HIGHEST

APACHE

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1 2 3 4 5

LOWEST HIGHEST

F-Z 150

1 2 3 4 5

LOWEST HIGHEST

HUNK

1 2 3 4 5

LOWEST HIGHEST

ANY OTHER

1 2 3 4 5

LOWEST HIGHEST

IF OTHER,PLEASE SPECIFY

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RATE YOUR PERCEPTION ABOUT PULSAR ON THE FOLLOWING FACTORS-


STYLE

1 2 3 4 5

LOWEST HIGHEST

POWER

1 2 3 4 5

LOWEST HIGHEST

PERFORMANCE

1 2 3 4 5

LOWEST HIGHEST

VALUE

1 2 3 4 5

LOWEST HIGHEST

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BRAND

1 2 3 4 5

LOWEST HIGHEST

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Documents

Overview of the Automobile Industry