RESEARCH REPORT ON

PROBLEMS OF BAJAJ 3
WHEELERS
BAJAJ VS TVS KING

MARKETING RESEARCH PAPER-1

PRIYANKA
MULLICK
INTRODUCTION:
Bajaj Auto an India based company is a manufacturer and marketer of two and 3-
wheeler vehicles which include scooters,motorcycles,passenger carriers and good
carriers. The company operates in India with headquarter in Pune.

After at least two decades as India’s dominant three-wheeler(popularly known as

the auto-rickshaw) maker, Bajaj Auto Ltd, already struggling with sagging
motorcycle volumes, is losing ground to smaller rivals like TVS,Piaggio,Mahindra &
Mahindra. Bajaj, the first to introduce three-wheelers on Indian roads in 1961,
has sold around 3.5 million of them, commanding almost half the market share in
the passenger-carrier segment. Mahindra and Mahindra Ltd launched its first
Champion range of three-wheelers in 2001. The latest is TVS, which entered this
space in 2008 with the TVS King brand.

OBJECTIVE:
The company recorded revenues of INR 84,460.3 million during FY ended March
2009,a decrease of 2.5% compared to FY 2008.The operating profit of the
company was INR 10,937 million during FY 2009, a decrease of 8.6% compared to
FY 2008.The net profit was INR 5,357.9 million in FY 2009,a decrease of 28.5%
compared to FY 2008.

This indicates that Bajaj Auto is constantly losing market share with declining
sales.

3 wheeler ie. Auto rickshaw segment has been the mainstay for Bajaj over the
years. But it was also treated in the same way as the scooter segment and the
company has been paying a huge price for it. Sensing an opportunity, other smart
automakers, like Tata Motors Ltd, Piaggio Vehicles Pvt Ltd, TVS Motors and
Mahindra and Mahindra Ltd (M&M) entered the light commercial vehicle (LCV)
market.Bajaj is slowly losing grounds in the competition and market share of Bajaj
is gradually decreasing every year.
Our objective is to find out the reasons for the problems Bajaj is likely to face in
the future due to entry of various competitors in 3 wheelers segment and provide
recommendations for this problem.

DECLINING MARKET SHARE:

90

80

70

60

50

40

30

20

10

0
2006-07 2007-08 2008-09

Bajaj Auto’s market share is falling significantly over the past years, even
when the three-wheeler market has grown by a compounded annual growth
rate (CAGR) of 18%. During the year 2008 to 2009, Bajaj’s market share in
three wheeler passenger and commercial vehicle segment fell to 63.6% and
12%, respectively from 70.3% and 20%, during the previous year. While the
3-wheel industry registered 10.3% year-on-year growth, Bajaj's production
grew by just 0.3%.
 Rate of
2007-08 2008-09
growth
Passenger
vehicle sales
Industry sales 375,180 415,411 10.7%
Bajaj Auto sales 263,598 264,332 0.3%
Bajaj Auto
70.3% 63.6% (6.7%)
market share

BAJAJ THREE-WHEELER SALES (IN NUMBERS)

Source: SIAM and Company data

CURRENT MARKET SHARE OF COMPETITORS:

bajaj
tvs
others
In the three-wheeler passenger carrier (popularly known as the auto-rickshaw)
segment, during November 2009, Bajaj and Piaggio were able to register an
increase of 61.3% and 68% in sales, respectively. M&M and TVS Motors clocked a
growth of 133% and 211%, respectively. The rising sales of competitors are
sounding the alarm bells for Bajaj, as vehicles from both M&M and TVS Motors
offer better features and performance than Bajaj's auto-rickshaws

Bajaj still tops the passenger auto rickshaw segment, which accounts for
63.6% of the three-wheeler market. Its market share in the passenger
segment is smaller than last year’s. But with the segment expanding with
newer players, Bajaj’s dominance in the three-wheeler segment will continue
to be threatened. The new entrants, with lower bases, is continuing to grow
at a faster pace
COMPETITOR’S ANALYSIS:
TVS KING:
The main competitor of Bajaj 3 wheelers,to whom Bajaj is gradually losing market share
is TVS King.

Despite being a relatively new entrant in the three-wheeler segment, TVS Motor
Company is eyeing a dominant share of the market within the next three years
TVS launched its first three wheeler - The King in Chennai on March 2008.

The company is launching the King in a very gradual manner, as sales have started in
the states of Tamil Nadu, Andhra Pradesh, Kerala,West Bengal and Gujarat.

The three-wheeler, available in CNG, LPG diesel and petrol versions, has an electric
start and is priced in the range of Rs 90,000 to Rs 1.30 lakhs.

The autorickshaw is a modern low friction, seven port engine, that is highly fuel efficient.
Also, the engine operates at lower revolutions for a given road speed, thereby,
improving its reliability.

Styling and comfort is far better than many other rivals in segment.

Fuel Efficiency is said to be 30 Kmpl due to its low friction 200 cc two stroke engine.

 A 4-stroke version of the king is also in the pipeline.

The company has promised a good mileage and a higher capacity engine, with the peak
torque at lower RPMs.

Standard accessories include a water bottle holder and a magazine holder and optional
accessories include wheel covers, FM radio, a digital clock, an idol stand, floor mats
and an additional rear bumper.

The company has added attractive features to the vehicle including a car-like dashboard
with fuel level indicators and mobile phone charging socket, dual tone high quality
seats, and an integrated bumper.
SPECIFICATIONS TVS KING BAJAJ

Engine 4 stroke 4 stroke

Displacement 173cc 145.45 cc

Compression 8.17bhp 7 bhp

Ratio MaxPower

Fuel Tank Capacity 8 litres 8 litres

Maximum Payload 335 Kg 333 Kg

Mileage 35 km/lit 30 km/lit

price 90,000-1.3 lakhs 90,000-1.2 lakhs

Speed 50 kmph 55 kmph
http://www.auto-rickshaw.com/autorickshaw-3-seater.html

SALES REPORT OF TVS KING:

At present, TVS King has a market share of 10 to 40 percent varying among
different towns.
Sales of three wheelers stood at 1212 units in the month of December 2009 as
against 321 units registered in December 2008. Cumulative three wheeler sales
for the period April to December 2009 stood at 8,707 units. 

COMPETITIVE STRATEGY OF TVS:

Family welfare schemes for the autodrivers of tvs

Going beyond the product, TVS Motor Company also announced several family welfare
schemes for autodrivers and their families to attract more customers:

 The company will offer all TVS King owners a one year free accident and
healthcare policy. TVS Motor Company has tied up with several
insurance company for the same.
 This policy will cover the owner and his family i.e. wife and children
against medical care upto Rs. 30,000 per annum on a floater basis.
 The owner will additionally be covered by a personal accident policy for
one lakh rupees.
 Given that auto drivers are cultural ambassadors, TVS Motor Company
also announced a novel training program to enhance the image of these
drivers and thereby create an atmosphere where these drivers enjoy their
work as well.
 Through this program, TVS King drivers would be provided with training
in courtesy and friendliness. They will also be given training in safety
and preventive maintenance.
 TVS Motor Company also announced another unique recognition scheme
to promote education through which the company will recognize and
reward children of TVS King Owner Drivers who secure the three
highest marks in Class X and Class XII examinations in each state in our
country .
 DRIVER’S VIEW ON TVS AUTORICKSHAW

As per the interview of a TVS King owner taken by our group,we found he was very
much satisfied with the product and its service and the attractive offer that comes with it.

 The engine operates at lower revolutions for a given road speed thereby
improving the reliability of the engine.

 TVS King’s electric start option reduces driver's fatigue.

 TVS King redefines all performance characteristics like initial pickup and
power, comfort, convenience, fuel efficiency, reliability and safety to give
pride of ownership to the driver.

 Refined quality and engineering skills ensure that the TVS King will
deliver high value to its customers both in terms of styling and efficiency.

 Much harder and stronger than bajaj auto.

 TVS’s mileage is 35 and Bajaj’s is 30.So TVS is much better.

 Comfortable seats with velvet cover.

 It has attractive additional features like magazine holder,water bottle

holder for convenience

After so many positive points TVS has the same price as Bajaj.TVS has so many
Competitive advantages over Bajaj.

According to the driver’s view TVS auto will surely takeover Bajaj very shortly.
PASSENGER’S VIEW ON TVS AUTORICKSHAW:

 Attractive interiors that add to the styling of the vehicle include an

attractive dashboard, dual tone high quality seats, and an
integrated bumper.

 Better head & legroom in the customer’s compartment.

 The comfortable seat is positioned so as to optimize superior ride

quality for longer duration.

 Better speed and runs faster than Bajaj auto.

 TVS auto provides with water bottle holder, magazine & newspaper
holder and a fire extinguisher. These are not provided by Bajaj
auto.

We found that, the passengers are very happy and satisfied after riding a
TVS auto

According to the customer’s view TVS is going great and is much better
than Bajaj auto in looks, comfort and other additional features.
We Say

TVS is always good in doing refinement and they are bold in

accepting good things of other as well as incorporating their own.
They concentrate on those minor aspects which are usually
overlooked by others. In this Autorikshaw too, we can see comfort
and interiors are not like those hand made but are designed
professionally. Though overall look is as a normal three wheeler but
inners are well finished. We hope that this will turn out to be a good
sign for Auto rickshaw  where up till now comfort was not a matter to
look upon. 
PRODUCT DEVELOPMENT OF TVS KING:

Despite being a relatively new entrant in the three-wheeler segment, TVS

Motor Company is eyeing a dominant share of the market within the next
three years,with continuous product development and new models launch

 company launched TVS King ZS, an all new green, environmental friendly
four stroke CNG auto rickshaw for New Delhi & NCR

 TVS King ZS is India's first 200 cc, four stroke, electric-start, CNG auto
rickshaw equipped with factory fitted CNG kit that delivers superior
performance

 It is a futuristic product designed for today's cities and has a good

combination of `power, comfort, mileage and style. 

 TVS Motor Company, in October 2009, launched TVS King Arjun and TVS
King LS in Kolkata and Bangalore respectively

 TVS King Arjun is an all new green, 4 Stroke LPG mono fuel autorickshaw
designed specially to conform exclusively to the norms of the West Bengal
State Government for Kolkata City.

 TVS King Arjun, India's first 200 cc, 4 Stroke LPG mono fuel with electric
start is a futuristic environmental friendly product designed for today's
cities having a good combination of power, style, comfort and mileage.

 TVS Motors is perhaps the first to seize the opportunity headlong with its
hybrid three-wheeler that runs on petrol, CNG and an electric battery

 The three-wheeler gives 60 km to the litre against the Bajaj CNG vehicle. It's
also got a host of other features like a MP3 player and reclinable seats

 it's also driver-friendly in the sense that its control panel is fabricated of
collapsible plastic so that the driver doesn't get trapped in the unfortunate
event of an accident.
MARKETING MYOPIA OF BAJAJ:
Despite being the market leader and enjoying a monopoly in 3 wheeler
market segment for the past 2 decades it is losing its market share with the
entry of new competitors with innovative products and attractive
features,due to marketing myopia of the company.

The main problems are:

 The declining volumes (for Bajaj) are largely due to the lack of innovative
products from the company and lack of R&D

 The shrinking volumes, also have to do with Bajaj’s focus on cleaner fuels
such as compressed natural gas, or CNG, which are not easily available in
smaller cities and rural areas

 very limited presence in rural segments. focus mainly on the cities

 the market price of the competitors with more attractive features are same
as that of Bajaj.

 an average three-wheeler buyer hails from a lower income group and

cannot afford the vehicle without finance.therefore, access to loans for
vehicle purchases remains key in a market where three out of four three-
wheelers are bought with financing.Bajaj failed to understand this, whereas
TVS King has provided the facility of loan to its cutomers.
 RECOMMENDATIONS:

 Scaling Up Service Centers:

Keeping in line with its growth target for the next 5 years, BAL needs to
scale up its service centers both in numbers and in capacity.

 Focus on Easy Credit Lending:

In the present economical crisis, Bajaj can utilize its subsidiary, Bajaj
insurance in coming up with schemes that will help consumers buy two
wheelers on friendly terms.

 Investment in Research and Development:

We have already identified that the core competency of Bajaj is its R&D
and investment in technology. In order to increase market share and
become the market leader, Bajaj needs to invest heavily in R&D. They
have to introduce new models of 3 wheelers as well as develop alternate
energy options.

 Lowering the price:

Lowering the price of the auto  may also help Bajaj to keep its position.

 Bajaj must put stress on research and find out what the autodrivers
want,their grievances  the problems(if any) faced by the autodrivers by
arranging frequent meetings  with them.
 CONCLUSION:

Through this research we have tried to identify various factors

that would impact growth of the company in three wheeler
industry and to retain its market share. We reflected on the
importance of innovation and customer demand. To continue
being the market leader, Bajaj needs to invest in the right
technologies and develop the right products at the right time.
Bajaj has shown the willingness to change and thus has been
able to achieve strong sales growth in past. To further
consolidate its position and gain market share and
competitive advantage over the new entrants, in the industry,
Bajaj need to overcome its marketing myopia and needs to do
strategic rethinking and assess its product focus. The new
strategy should also be backed by efficient on the ground
customer support and continuous research for product
innovation.
BIBLIOGRAPHY:
 www.indiainfoline.com/Markets/Company/.../TVS-Motor.../532343

 http://www.auto-rickshaw.com/autorickshaw-3-seater.html
 livemint.com
 www.autoindiaforum.com/tvs-motor-enters-autorickshaw-market.html