Bajaj vs Lml

Topics: Bajaj Auto, Bajaj motorcycles, Motorcycle Pages: 12 (3680 words) Published: February 17, 2011

A Comparative Analysis

In today’s world the two wheeler segment is a very competitive industry and there is a very stiff competition among the various companies. There have been many two wheeler companies in India present in the market since a long time, some have been able to transform itself and cope with the modern market and some have faded away into the past. Companies like Hero Honda, Bajaj and TVS have transformed themselves into major giants, while companies like LML and Rajdoot have failed miserably and collapsed and had to shutdown. So in our case study we are taking into consideration two such companies like Bajaj and LML which have been there from the very beginning and trying to analyse why Bajaj was a huge success, while LML suffered huge losses and collapsed and the reasons behind these outcomes.

1) One of the oldest scooter makers in INDIA.
2) Had the largest market share in INDIA before other companies came into India. 3) Emergence of various motor bike industries in India.
4) The scooter industry slowly declined in India and it shifted to motor cycles. 5) LML and BAJAJ also focused on the motorbike production. 6) While BAJAJ was able to transform itself into a two wheeler giant, LML collapsed while doing that. 7) Reasons behind the success of Bajaj and failure of LML. 8) Present position in the market.


A Brief History Of The Two Wheeler Industry In India

The feeling of freedom and being one with the Nature comes only from riding a two wheeler. Indians prefer the two wheelers because of their small manageable size, low maintenance, low pricing and easy loan repayments. Indian streets are full of people of all age groups riding a two wheeler. Motorized two wheelers are seen as a symbol of status by the populace. Thus, in India, we would see swanky four wheels jostling with our ever reliable and sturdy steed: The two wheeler. India is the second largest producer and manufacturer of two-wheelers in the world. It stands next only to Japan and China in terms of the number of two-wheelers produced and domestic sales respectively. Indian two-wheeler industry has got spectacular growth in the last few years. Indian two-wheeler industry had a small beginning in the early 50's. The Automobile Products of India (API) started manufacturing scooters in the country. India became the second largest two wheeler manufacturer in the world and starting in the 1950s with the Automobile Products of India (API) that manufactured the Lambrettas and Bajaj Auto Ltd. with its association with Piaggio of Italy (manufacturer of Vespa scooters) as the largest manufacturers within the country. The license raj that existed from the 1940s to 1980s in India did not allow foreign companies to enter the market and imports were tightly controlled. This regulatory maze, before the economic liberalization, made business easier for local players to have a seller’s market. Customers in India were forced to wait up to 12 years to buy a scooter from Bajaj. The CEO of Bajaj commented that he did not need a marketing department, only a dispatch department. By the year 1990, Bajaj had a waiting list that was twenty-six times its annual output for scooters. The motorcycle segment had the same long wait times with three manufacturers: Royal Enfield, Ideal Jawa, and Escorts. Royal Enfield made a 350cc Bullet with the only four-stroke engine at that time and took the higher end of the market but there was little competition for their customers. Ideal Jawa and Escorts took the middle and lower end of the market respectively. In the mid-1980s, the Indian government regulations changed and permitted foreign companies to enter the Indian market through minority joint ventures. The two-wheeler market changed with four Indo-Japanese joint ventures: Hero Honda, TVS Suzuki,...
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