Operations Management at Bajaj

Topics: Bajaj Auto, Motorcycle, Auto rickshaw Pages: 6 (1227 words) Published: March 26, 2010
Motorcycles: Overall
Two-wheeler sales of Indian players is dominated by the domestic market and, within it, by motorcycles. After growing at a sharp clip from the late 1990s, motorcycle sales witnessed a 7.8% drop in volume in 2007-08, due to falling domestic demand as a result of rising interest rates and many private sector banks reducing their retail lending exposures. 2008-09 saw a modest increase in motorcycle sales of 4%, driven largely by growth in cash sales. Even so, sales of motorcycles (both domestic and exports) in 2008-09 has been lower than what it was in 2006-07, before the slowdown hit this sector.


The group comprises of 34 companies and was founded in the year 1926. The group's flagship company, Bajaj Auto, is ranked as the world's fourth largest two- and three- wheeler manufacturer and the Bajaj brand is well-known across several countries in Latin America, Africa, Middle East, South and South East Asia. Founded in 1926, at the height of India's movement for independence from the British, the group has an illustrious history. The integrity, dedication, resourcefulness and determination to succeed which are characteristic of the group today, are often traced back to its birth during those days of relentless devotion to a common cause.

Motorcycles : Domestic Sales for Bajaj Auto
The company classifies motorcycles into three segments, based on consumer categories and approximate price points. These are: a) Entry segment. These are typically 100 cc motorcycles at a price point in the neighbourhood of Rs.35,000. Bajaj AutoDespite the slight uptick in the industry’s sales volume, Bajaj Auto did not maintain volume growth, for reasons that will be discussed below. From 1.66 million motorcycles in 2007-08, the company’s domestic sales fell by 23% to 1.28 million units in 2008-09. Some of this was compensated by a 31% increase in exports to 631,383 units. But it was not enough. Consequently, Bajaj Auto’s market share(domestic and exports, combined) fell from 32.7% in 2007-08 to 28% in 2008-09. b) Executive segment. This largely comprises 100 cc to 135 cc motorcycles, priced between Rs.40,000 to Rs.50,000. We arein this segment with two brands: XCD and Discover. c) Performance segment. These are sleek, high performance, with price points in excess of Rs.50,000. We are present here with our flagship brand, the Pulsar, and our cruiser, the Avenger. We dominate this space, with a domestic market share in excess of 47%.

Using the three-fold classification described above, Chart plots Bajaj Auto’s domestic sales of motorcycles over 2008-09. [pic]



Avenger 200 DTS-i


Pulsar 135 DTS-i

Pulsar 220 DTS-i

Pulsar 180 DTS-i

Pulsar 150 DTS-i


Discover 135 DTS-i

Discover DTS-i


Platina 125

Platina 100 cc


Ninja 250 R

Bajaj Auto’s vehicle manufacturing capacity stands at 3.96 million units — comprising 3.6 million two-wheelers and 360,000 three-wheelers. The newest plant at Pantnagar (Uttarakhand) has a capacity to produce 900,000 two-wheelers. Table gives the capacity data. [pic]

Bajaj Auto’s production at its state-of-the-art Pantnagar plant (Uttarakhand) has been on the rise. In 2007-08, the plant produced 276,925 motorcycles. This increased by 15% to 318,321 vehicles in 2008-09. By end-2008-09, Pantnagar was producing some 40,000 motorcycles per month. To maximise the tax benefits available at Uttarakhand, the company is shifting some of its more profitable products to the Pantnagar plant. After the shift of these products, the plant is expected to produce around 60,000 vehicles by the third quarter of 2009-10. Table gives the data on which products are manufactured in what plant. [pic]


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