Bajaj Auto Ltd.: Overtaken in the Indian Scooter Market

By the end of FY 2000, the numbers clearly indicated that consumer preference had shifted firmly toward motorcycles with four-stroke engines, and industry watchers predicted that this trend would continue. Geared scooter sales registered a fall of 41% in 2001. "The market has shifted to motorcycles. We will have to follow the trend,"said Venu Srinivasan, chairman, TVS.

BAL realized, though rather belatedly, that it would have to cater to the changing consumer tastes and preferences, if it had to survive. Rajiv, who later agreed that BAL had been slow in reading the demand pattern, said, "See, the company failed to anticipate the consumer behavior...

The late 1990s saw the popularity of scooters wane and motorcycles emerge as the new favorites in the Indian two-wheeler market. It was believed that the dramatic shift happened because players like BAL did not pay sufficient attention to design, R&D, and customer satisfaction. "The decline of the market for scooters was directly related to neglect of this segment over decades vis-à-vis critical benefits (mileage), contemporary technology, and non-stop excitement of launch of newer and newer models offered on the motorcycles platform,"said Francis Xavier, managing director, Francis Kanoi Marketing Planning Services...