Bajaj Auto Ltd.’s Brand-Centric Strategy

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Case Details:

Case Details:

Case Code : MKTG269
Case Length :18 Pages
Period : 2000-2010
Pub Date : 2011
Teaching Note : Not Available
Organization : Bajaj Auto Ltd.
Industry : Automobile (Two-wheelers)
Countries : India

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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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Twin-Brand Focus vs. Multiple Brands Under Single Umbrella cont...

The scooters produced under the Chetak brand dominated the Indian two-wheeler market from the early 1970s to the early 1990s and helped Bajaj Auto become a leader in the industry. As the Indian Two-wheeler Industry was deregulated and thrown open to competition in the 1990s, Bajaj Auto began to face a threat from foreign players, who entered India through collaborations. The new entrants gradually strengthened their foothold by introducing enhanced features, improved technology, and new models into the two-wheeler market. Moreover, in the late 1990s, there was a shift in consumer preference and demand from scooters to motorcycles. All these factors contributed to the decline of Bajaj Auto’s sales and market shares and posed a challenge for

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the company. The market share of geared scooters started declining while that of motorcycles soared. Various reasons were cited for the shift – demographic change, with a significant growth in the proportion of younger people in the population; the growth of the economy and increased disposable incomes of the middle class; and the availability of various models of motorcycles. As a result, by the early 2000s, motorcycle sales surpassed that of scooters and Bajaj Auto lost its market share to Hero Honda³.

In an attempt to recapture market share, Bajaj Auto restructured its business and entered the motorcycle segment launching new models, which arrested the declining trend the company was witnessing. However, Bajaj Auto wanted to continue the manufacture of scooters as well. It launched a few new models and upgraded existing ones. But with the introduction and subsequent popularity of the Activa, a gearless⁴ scooter from Honda Motorcycle and Scooter India (HMSI), Bajaj Auto lost its dominance in the scooter market

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3]Hero Honda is the joint venture between Honda Motor Co. Ltd. and Hero Cycles Ltd. It was established in 1984. In 2002, with its motorcycle sales touching 1.4 million units, it became the world’s largest two-wheeler manufacturer.
4]Gearless/ungeared scooters are scooters with automatic gear transmission. They usually come with convenient features like self-start, auto choke, etc.

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