INDUSTRY OVERVIEW, SALES PROCEDURE AND ANALYSIS AND CONSUMER BEHAVIOR

-DIGVIJAY MOTIANI

INDIAN AUTOMOBILE INDUSTRY

77.44%

15.07%

4.45%3.02%

Contribution

Two wheelersPassenger vehiclesCommercial vehiclesThree wheelers

Bajaj Auto Ltd.

• World’s third largest manufacturer for motorcycles and India’s second largest.

• World’s largest three wheeler manufacturer.• Has operations in 50 countries.• 35% of total sale is from exports and 45% of

exports are to Africa (mainly Boxer).

Observations made from 2013-14 sales data

• M2 segment has the highest market share compared to other segments (60%), but when compared to it’s competitors, Bajaj accounts for only around 11% market share in that category of two wheelers.

• Bajaj has the highest market share in the sports segment compared to it’s competitors (>40%).

• There is a regular increase in sale during certain months because of the festivals which varies regionally.

• Gujarat sees a good sale in the M2 segment because people prefer “value for money” motorcycles. Again, this varies regionally.

Growth-segment wise

INDUSTRYSEGMENT GROWTH

M1 -21.90%

M2 -0.15%

M3 -15.28%

Sports 7.02%

BAJAJSEGMENT GROWTH

M1 -22.19%

M2 -23.53%

M3 -54.19%

Sports -8.42%

Market share-Gujarat

16.31

55.83

1.551.85

20.92

0.36 1.80 1.31

Sales

BALHEROTVSYMLHMSISUZMTWLENF

Comparison: 2012-13 and 2013-14

BAL HERO TVS YML HMSI SUZ MTWL ENF0

50000

100000

150000

200000

250000

300000

350000

400000

450000

500000

2012-132013-14

Steps for purchasing as a customer

Showrooms visited:

BAJAJ• Amin bajaj, Lal darwaja.• Amin bajaj, Juna Wadaj.• Smit bajaj, Nehrunagar.• Gallops bajaj, Gurukul road.

OTHERS• Shradha automobiles-Hero,

Lal darwaja.• Pepal Yamaha, 132ft ring

road.• Petal Suzuki, Gurukul road.• Punjab Honda, Gurukul

road.• Oceanic TVS, Gurukul road.

Observations• “Pulsar” brand has created a benchmark for

all it’s competitors in the market.• Bike specifications and features are not given

much importance, mileage and on-road price is the only thing mentioned and talked about.

• Competitors lay more stress on explaining the bike features, for pulsar it is considered that the customer knows it already.

Manan Bajaj-Ahmedabad

• Ahmedabad is among the top three cities of India with highest number of two wheelers on road.

• Manan bajaj (including branches and ASC) sells more Bajaj two wheelers compared to any other dealer in Gujarat.

Target structure:

Targets are set based on:

• Ward wise total population for various branches in various areas (out of which the target population is calculated).

• Sales trend analysis.• Growth analysis.• Market conditions.

Steps for the sales executive

• Reception• Enquiry card• Demonstration• Test ride• Exchange/Schemes• Follow up

Enquiry comparison 12-13 and 13-14:

Total S/R-Enquiries

2012-13 2013-14 DIFF

Q1 1836 1410 425

Q2 1832 1554 277

Q3 2496 1578 919

Q4 1701 1283 419

TOTAL 7865 5825 2040

Q1 Q2 Q3 Q4 TOTAL0

1000

2000

3000

4000

5000

6000

7000

8000

9000

Total S/R-Enq 2012-13Total S/R-Enq 2013-14

Sales comparison 12-13 and 13-14:

Q1 Q2 Q3 Q4 TOTAL0

500

1000

1500

2000

2500

3000

3500

4000

2012-132013-14

TOTAL S/R sales

2012-13 2013-14 DIFF

Q1 852 598 254

Q2 891 668 223

Q3 1203 784 419

Q4 712 505 207

TOTAL 3658 2555 1103

• Enquiries and sales both have come down by around 27% comparing the 2012-13 and 2013-14 figures.

• Sales figures have come down simultaneously with the reducing enquiries and there is not much reduction in the conversion rate. This clearly indicates that things are working fine at the showroom level.

• Enquiries and sales figures not as per expectation in Q3 of 2013-14 (following the trend from previous years).

Main reasons for deals not being finalized:

• Expected finance scheme not available. (ROI is high, part payment not available)

• Exchange price is not as expected.• Getting the old vehicle repaired which was

supposed to be exchanged.• Going for a competitor company’s motorcycle.• Buying it from another dealer because of

better discounts or better accessories.

Converting a losing call:

• To get instant flexibility in the finance scheme as per customer’s comfort. (whatever is possible)

• Comparing it to the other schemes and assuring them that they are getting the best deal.

• Explain how Bajaj could be a comparatively better option in the long run with low maintenance cost.

• Try to meet the customer’s expected exchange price.

Advantages of the follow-up method:

• Each and every customer is followed up on the exact dates without fail.

• The pipeline system allows this process even after a long period of months.

Improvements:• A computerised reminder system could be a

much easier and better option.

Top 3 reasons for leakage from login to final purchase(only finance):

(This is an average from Jan-May 2014 at Manan Bajaj HO)• Customer says “we will come later”- 16.13%• Exchange price not satisfactory – 16.46%• Bought competition motorcycle- 21.10%

• Also got some idea about the basic working of the FINANCE and SERVICE departments.

Branches visited:• Anandnagar• Naranpura• Paldi• OdhavWhole of the sales talk with the customer changes in certain areas depending on the type of customer in that particular locality. This can not be generalized for all customers though.

Odhav Paldi Bapunagar Naroda% decrease in enquiry 2012-13 to 2013-14.

22.43% 33.65% 22.88% 25.14%

% decrease in sales 2012-13 to 2013-14.

19.27% 28.40% 27.40% 31.05%

• % decrease in enquiries is more than the % decrease in sales in Odhav and Paldi branches.

• % decrease in enquiries is less than the % decrease in sales in Bapunagar and Naroda branches.

Possible reasons for decrease in enquiries:

• Low market conditions.• Higher demand for competition bikes.• Previous Bajaj customers not satisfied with

their service.• Higher maintenance cost.

Main reasons for enquiries being closed:

Not Satisfied with exchange price

Purchased from other dealers

Purchased other motorcycle

Anandnagar 9.00% 7.00% 25.00%

Naranpura 18.50% 14.50% 16.50%

Paldi 26.40% 8.82% 14.70%

Odhav 8.38% 10.17% 23.35%

Average 15.57% 10.12% 19.88%

Promotional and sales activities:

1. Canopy2. Test drive3. Demo

On going activity: At a cricket tournament held in Karnavati club.

Consumer behaviour:

• People usually riding more than an average of 40km/day prefer purchasing Discover or Platina. This clearly shows how the need of the customer is developed.

• Most of the customers purchase their motorcycles after they get to know about it from their friends/relatives. And the second highest would be the ones who get to know about the motorcycle at the showroom.

• As per the survey TV news, paper advertisement or internet does not hold much importance.

• Hero and Honda motorcycles are the most preferred second options for Bajaj customers.

(Mainly Splendor, Passion, Shine and Dream neo)• There is a good amount of Bajaj customers who

purchase only Bajaj vehicles because of the company’s history.

• A very high percentage of people are not satisfied with the after sales service offered by Bajaj.

• “Discover does not give the mileage claimed by the company”- is what most of the discover customers feel.

Improvements possible:

Odhav branch Naranpura branch

Posters for bikes that are no more supplied:

ODHAV BRANCH:

This space could be used as well:

More and better accessories:

THANK YOU