SWOT Research of Bajaj Auto

Keywords: bajaj vehicle swot analysis

Bajaj Auto Ltd is the next largest manufacturer of two-wheelers in India, a drop off their preliberalisation position to be market leaders. They are really, however, the major exporters in this section, which is partly because of the recent strategies that they have followed, including a shift towards more R&D extensive investment, and an effort to cater to all sections of the world. In this statement, we propose to provide a alternative view of the automobile industry, mentioning the many challenges and opportunities available, and Bajaj's role in the same. We start out with taking a look at Bajaj's current position in the two-wheeler market, and analyse that with respect to the current macro-economic circumstance (in conditions of the PEST research) and the industry situation (in terms of Porter's Five Causes Model). We also map the changes in Infestation to changes in the Five Pushes and analyse Bajaj's advantages and weaknesses regarding these. Therefore, we find out whether these changes can be exploited by Bajaj and give our recommendations in regards to what their future strategy should be. Our examination arises with the conclusion that both wheeler industry, though it is facing hook downturn today, is still highly rewarding and is likely to provide enormous future potential for Bajaj, as is apparent from the forecasts for the industry. Appropriately, we make several strategic suggestions which we expect would give Bajaj competitive advantages over other players, and would enable them to regain their strong hold on the two-wheeler industry.



BAJAJ AUTO came into presence on November 29, 1945 as M/s Bachraj Trading Corporation private limited. They started out fresh by advertising two and three wheeler in India and obtained a license from Authorities of India to make and it gone general population in 1960. In 1970, it rolled out its 100, 000th vehicle. In 1977, it managed to produce and sell 100, 000 vehicle within a financial 12 months. In 1985, it started out manufacturing at Waluj close Aurangabad. In 1986, it be able to to create and sell 500, 000 vehicle within a business yr. In 1995, it rolled out its ten millionth vehicle and created and sold 1 million vehicle in a year.

The company is headed by Rahul Bajaj who's worthwhile more than US$1. 5 billion. Based on the author of Globality : contending with Everyone from All over the place for Everything, Bajaj has grown job in 50 countries by developing a type of value -for-money bikes targeted to the different inclination of entry- level potential buyers.

(Kwenkbodenmille, 2008)

SWOT Evaluation:


  • Strong cash platform but hasn't been invested effectively.
  • Not a strong internation brand despite high export volumes.
  • Distribution network is much less strong and comprehensive as Hero Honda.


  • Highly experienced management.
  • Extensive R & D emphasis.
  • High performance products across all categories.
  • Number one position in exports.
  • Collaboration with BAFL for financing.
  • High economies of range and scope.


  • Rising throw-away income.
  • Increase first time in motorbike buyers
  • Decline in interest rate for just two wheeler financing.
  • Shift from basic level motorbikes to performance oriented bikes
  • Inadequate public travel infrastructure.
  • Low operating cost.


  • Imitation of designs and technological
  • Innovations by competition is easy
  • Foreign players coming in India, especially
  • Low cost Chinese motorbikes manufacturers
  • Declining margins anticipated to increasing
  • Competition

PESTEL Research :


  • Investment insurance plan- 100 per cent foreign direct purchases (FDI) are allowed in companies through the automatic approval option- (STRENGTH)

International companies can spend money on India either by picking up a 100 % collateral stake or by acquiring a share jointly with another company in the vehicle and vehicle ancillary sections.

Policy aims to promote a internationally competitive auto industry in India

  • Import policy (STRENGTH)

In order to protect the local industry and limit likely imports, the federal government still places high obligations on these imports.

  • Fiscal rules (STRENGTH)

In order to protect the local industry and restrict likely imports, the government still packages high duties on these imports.

  • Excise duty -Two-wheelers and key raw materials (Durability/ WEAKNESS)

Changes in obligation rates have an impact on demand too. In 2001-02, the excise work on the <75 cc engine motor capacity two wheelers was decreased. This brought on a transfer in consumer preference from mopeds to motorcycles.

  • Value added Taxes (Durability/ WEAKNESS)

State governments charge value added tax (VAT) or local sales taxes and other levies. The differ from local sales taxes to VAT is likely to have benefited the two-wheeler industry in the form of lower tax incidence.

  • Emission control regulations (STRENGTH)

India has one of the most stringent emission norms on the globe.

  • Safety regulations (STRENGTH)

Tighter emission benchmarks have edged out two stroke motorcycles, which give off high degrees of hydrocarbons and particulates vis- -vis four-stroke bikes.


  • Interest Rates(STRENGTH)

Large firms have an expense advantage due to lessen rates of interest they are incurred while trying to get loans (lower risk included). A lot of capital is needed to type in the industry as initial outlays on investment are high, thus higher rates of interest would demonstrate as a disincentive to go into the industry.


The buyer needs information on rates of interest as these help determine whether or not it is cost-effective to make a purchase. Customers are highly price sensitive and higher rates of interest may lead to higher prices if the customer requires a loan to help make the purchase.

  • Inflation (STRENGTH)

Inflation increases cost of purchase for different players diversely, with respect to the inputs and sources, could make it problematic for new players to go into. Inflation may influence the prices of the latest models of differently, in so doing making some players better off than the others, as customers may face costs in moving over players, which might again make it difficult for new players to go into.


The buyer is highly price sensitive, and changes in prices affect the industry all together as buyers might not be in a position to buy a more expensive product. If inflation impacts the two wheeler and four wheeler industry in a different way, then inflation could well have a detrimental effect on this sector

  • Economic Potential clients (STRENGTH)

A great deal of capital is needed to enter into the industry, which might be difficult to come by if the market is not successful, and relatively simpler to obtain if the economy does well. In times of economic increase, there are a sizable number of customers. Switching costs involved with turning to substitutes. Easy to change between suppliers.


These customers are highly sensitive to price, but in times of good economical conditions, prices may no more remain important criteria as throw-away income of the populace also rises. Swiftly growing industry, especially due to dazzling economic leads.



Age of the populace : As the demographics of India is skewed for the youth, increasing numbers of people are likely to tread unknown pathways.

  • Population have a strong/poor opinion on renewable issues

More educated people are focussed towards greener issues, which Bajaj has been able to address significantly.


  • Substantially increasing opportunities in development capacities(STRENGTH)

Do large firms have a cost or enactment benefits in your segment of the industry?

Is a great deal of principal obligatory to enter your industry?

  • Establishing partnerships in India and abroads

Is there a huge number of customers relative to the amount of organizations in the business

  • Proficiency in Understanding Complex Drawings, features and well conversant in all Global Automotive Specifications (STRENGTH/WEAKNESS)

Do large firms have a cost or performance benefits in your fragment of the industry? Are there any brand-named product dissimilarities in your industry? Does indeed your product or service have any trademarked geograpies which give you lower costs?

  • Increased raw material costs

Increasing costs due to business cycles, rising steel and petrol prices

(Kwenkbodenmille, 2008)


1) Use extra capacity present to produce ungeared scooters for women. The female society constituting around 50 per cent of our addressable inhabitants contributes less then ten percent of the total two-wheeler demand. With metropolitan markets with addressable male people getting saturated, players must aggressively target the women population for expansion.

2) Review product combine, focus on R&D to bring services in market

  • Demographics show increased youth population
  • Young people fashion savvy

3) Concentrate on Rural market: Rural market segments currently add around 45 per cent of the industry's demand. However, in the years ahead, with urban marketplaces getting saturated, experts expect a rise in demand from rural market segments. To address the changing dynamics, BAJAJ would have to resort to extreme rural-centric sales and promotional activities. BAJAJ would have to adjust marketing strategies by focusing on rural focused adverting on mass media, educative highway shows and create aspiration beliefs for the products, and develop their sales syndication network.

  • Introduce low cost models
  • Develop sales circulation network which happens to be weaker than other players
  • For rural young ones, introduce low cost trendy vehicles
4) Increase give attention to exports and penetrate new markets

With local demand for two-wheelers slowing down, it might be increasingly important for BAJAJ to look beyond limitations to partly mitigate the slowdown. BAJAJ would consequently have to develop products ideal for different market segments; high opportunities are necessary for setting up making facilities as well as for building a reasonable level of brand equity. Till now BAJAJ focussed only on overall economy class and producing country markets, however now in those segments it is facing competition from cheap Chinese players. Therefore need comes up to permeate new marketplaces like USA and UK.


Bajaj auto faces stiff competition from the marketplace innovator Honda and closest rival Suzuki. For the reason that they cannot create reliable brand image among their customers. They need to focus on expanding their products that can give better experience to their consumer.

From the survey, it sometimes appears that Bajaj is only able to relatively gratify their costumers from their products. They have to generate a great sense of pleasure in their customers by offering unequaled product features and service that can make their customers loyal to the brand which will greatly help Bajaj in increasing its market talk about.

Bajaj's product prices are in comparison with its leading competition. The web that consumers do not feel that Bajaj has much value and therefore would rather buy other brands. Bajaj need to offer more competitive charges and better marketing promotions to market their bike better.

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