Bajaj Auto Ltd.: Overtaken in the Indian Scooter Market
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Case Details:
Case Code : BSTR216
Case Length : 20
Pages Period : 1999-2006
Organization : Bajaj Auto Ltd.
Pub Date : 2006
Teaching Note :Not Available
Countries : India
Industry : Auto and Ancillaries
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts
Background Note
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The Bajaj group was founded in 1926 by Jamnalal Bajaj (Jamnalal) (Refer Exhibit
I for the companies in the Bajaj group as of 2005). In 1945, Kamalnayan Bajaj,
Jamnalal's son, set up Bachraj Trading Corporation Ltd. (BTCL), a trading
company, to import and sell two- and three- wheelers. This business continued
till 1959.
In 1959, the company secured a license from the Government of India (GoI) to
manufacture two- and three-wheelers. In 1960, BTCL was renamed Bajaj Auto Ltd.
(BAL) and the company went public. The same year, it entered into a technical
collaboration with Piaggio for the manufacture of scooters...
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BAL and the Indian
Two-Wheeler Market
Between the mid-1950s and 1980s, the Indian industry operated under what was
popularly termed the "License Raj". During this period, entities that
wanted to produce two-wheelers were required to secure licenses from the GoI.
The production capacity was also determined by the GoI...
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The Turning Point
The early 1990s saw a recession in the Indian
two-wheeler market. Overall sales of two-wheelers declined by 15% in
1991 and 8% in 1992 . This period also saw a steep rise in fuel prices,
which resulted in consumers placing greater emphasis on fuel efficiency
when purchasing a new two wheeler.
However, even as late as 1997-98, the scooter segment was the largest
sub-segment in the two-wheeler market. Scooters, with 42% of the market
(in terms of unit sales), were followed by motorcycles (37%), and mopeds
(21%)... |
Excerpts Contd... >>
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