Bajaj Auto Ltd: Overtaken in the

Indian Automotive Market

Under supervision:
Prof.Dr. Doaa Salman

Presented by:
Hany Farag
Osama Fathy
Content

 Objectives.  Factors affect Demand.

 Introduction.  Supply.
 Company Portfolio.  Demand.
 Our Product.  Supply and Demand.
 Market Volume.  Elasticity.
 Market Share.  Conclusions.
 Market Type.  References.
 Factors affect Supply.
Study Objective
Under this research study, following objectives have
been established.
Main Objective

The main objective of this study is to find out the

reasons behind demanding Indian Three wheelers in
Global markets and specially in Egypt Market.

Find out potential growth of the Indian Three wheeler

for Global market.
Introduction
The Bajaj Group is amongst the top 10 business houses in
India. Its footprint stretches over a wide range of
industries :
 Automobiles (2 and 3 wheelers manufacturer)
 Home appliances
 lighting
 Iron steel
 insurance
 travel
 finance.
Bajaj Auto, is ranked as the world's fourth largest three
and two wheeler manufacturer .
The group comprises 34 companies
Introduction Cont.,
Bajaj Auto Limited
Founded 1926
Founder Jamnalal Bajaj
Headquarters Pune, India
Key people •Rahul Bajaj (Chairman)-1965
•Rajiv Bajaj (CEO)
Products Motorcycles, three-wheeler
vehicles and cars
Net income ₹35.6254 billion(US$550 million)
(2015–16)
Number of 9,347 (March 2016)
employees
Website www.bajajauto.com
Bajaj Mission, Vision, & Goal
Mission
• Focus on value base manufacturing
• Fostering team work & enhancing their capability.
Continual improvement
• Total elimination of wastes
• Pollution free & safe environment
VISION
To attain world class excellency by demonstrating value
added product to customers.
Goal
To catapult Bajaj Auto as the country’s largest automobile
company.
INDIAN AUTOMOTIVE
INDIAN AUTOMOTIVE
INDIAN AUTOMOTIVE
Bajaj Auto Limited Products
Bajaj Auto Limited is a global two-wheeler and three-
wheeler manufacturing company.
Bajaj Auto manufactures and sells

I. Motorcycles
II. Scooters
III. Auto rickshaws
Bajaj Auto Limited Products
I. Motorcycles

Motorcycles in production include the Platina, Discover, 

Pulsar and Avenger and CT 100. In FY 2016, it sold
approximately 3.36 million motorcycles which accounted
for 31% of the market share in India.
Bajaj Auto Limited Products
Cont.,..

II. Three wheeler

It is the world's largest manufacturer

of 3-wheelers and accounts for almost
70% of India's three-wheeler exports.
During the FY 2016, it sold approx.
534,995 three-wheelers which was
57% of the total market share in India.
Bajaj Auto Limited Products
Cont.,..
III. Low cost cars (Bajaj Qute)

In 2010, Bajaj Auto announced cooperation with Renault

 and Nissan Motor to develop a US$2,500 car, aiming at a 
fuel efficiency of 30 kilometres per litre (3.3 L/100 km),
On 3 January 2012, Bajaj auto unveiled the Bajaj RE60, a 
mini car for intra-city urban transportation, the RE60
have a top speed of 70 kilometres per hour.
Our Product : Auto rickshaw (TUK-TUK)
History
An auto rickshaw is a motorized development
of the traditional pulled rickshaw or 
cycle rickshaw.
Japan has exported three-wheelers to Thailand
since 1934.  In 1947 Corradino D'Ascanio, aircraft
designer at Piaggio and inventor of the Vespa,
came up with the idea of building a light three-
wheeled commercial vehicle to power Italy's
post-war economic reconstruction.
Auto rickshaws in Southeast Asia started from
the knockdown production of the 
Daihatsu Midget, which was introduced in 1957.
Auto Rickshaw Companies in India
1. Tuk-TuK
Tuk-Tuk is one of the famous and well-known auto
rickshaw manufacturing company in India.
There are two versions of Tuk-Tuk auto rickshaw
available in the market – Petrol and CNG version
Auto Rickshaw Companies in India
2. TVS
he TVS King three-wheeler is one of the best vehicles
from the renowned company TVS. You can find this
vehicle in the petrol and the CNG versions.
Auto Rickshaw Companies in India
3-Mahindra
Mahindra Alfa Passenger is a three wheeler auto rickshaw
from one of the well-known brand of India i.e. Mahindra. It
has come with 8 hp diesel engine and single cylinder which
make it one of the tough vehicle to be used on daily basis.
Auto Rickshaw Companies in India
4-Piaggio
Piaggio Ape City is a quite common three-wheeler carrier
for passengers in India from the famous company Piaggio. It
originates with an industry’s first a three-regulator engine.
Auto Rickshaw Companies in India
5. Bajaj RE
The top name in the list of top five auto rickshaw
companies in India is Bajaj. The Bajaj RE is an extremely
trustworthy three wheeler from the renowned maker
company “Bajaj “
Features of Bajaj RE Auto rickshaw: 
• You can have options of the diverse
category of fuel engines like Petrol, PLG, Diesel
• The engine capacity of the petrol version is
145.45cc and 447.3 cc for the Diesel version.
• It provides the power output
at 6.6Kw@5000rpm.
• There are 4 forward gears in the petrol
version along with the one reverse gear.
Three-wheeler market volume
India has emerged as the largest three-wheeler industry with
a large domestic market and export base on the back of
strong demand from local as well as international markets.
“With industry volumes of 942,533 units in FY 2016, India is
positioned as the largest manufacturer as well as market for
three wheelers, globally.
Industry sales /unit
1,000,000
939,884
950,000 942,533

900,000 876,127
Industry sales
850,000
833,026
841,379
800,000 795,989

750,000

700,000
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
Bajaj Auto Market share

Bajaj Auto has the most market share in Three wheeler

industry in Local and global market.
Bajaj 3W Global Sales
1,000,000

900,000

800,000

700,000

600,000 Industry sales

58.8% 55.2% 56.8%
Bajaj Auto's sales
500,000 57.1%
54.9% 53.7%
400,000

300,000

200,000

100,000

0
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
Bajaj Auto Market share

Bajaj 3W Domestic sales

600,000

500,000

400,000

Industry sales
Bajaj Auto's sales
300,000
47.4%
42.0% 44.1%
39.1% 39.5%
200,000 39.0%

100,000

0
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
Bajaj Auto Market share
Bajaj 3W Exports Sales
450,000
400,000
350,000
86.0%
300,000 69.8% 69.2%
83.8% 73.8% Industry sales
250,000 85.7% Bajaj Auto's sales
200,000
150,000
100,000
50,000
0
FY2011 FY2012 FY2013 FY2014 FY2015 FY2016
The Indian Auto Rickshaw in Egypt
TUK-TUK
The Indian Auto Rickshaw in Egypt

HISTORY

 TUK TUK import started in 1998

 3 Main company's
GHABBOUR AUTO
SEOUDI GROUP
El AMAL GROUP
 Other Local assembler
 30 million Egyptian uses Tuk-Tuk “un-official record”
 About 3 milion Tuk-Tuk in Egypt “un-official record”
 GHABBOUR AUTOMOTIVE

GB Auto is Egypt`s leading passenger car assembler,

distributor and importer in the Middle East and North
Africa. GB group is the largest market player in terms of
sales revenue, market share and production capacity. GB
Auto was able to historically outperform the market
trend due to being the sole representative of Hyundai,
Mazda and Geely passenger cars in Egypt. The company
also owns the biggest distribution and after sales service
networks.
 GB Motorcycles & Three-Wheelers

Egypt is considered the first motorized assembly line of

production for Bajaj three-wheelers outside India.
GB Auto got the exclusive rights to distribute Bajaj three-
wheelers and motorcycles in Egypt. GB Auto imports
Semi Knocked-Down (SKD) units and assembles the
vehicles locally at the company’s 6th of October City
Industrial Zone factory. GB is Egypt`s market leader for
such vehicles with Sales revenue for motorcycle & 3
wheeler FY17 2,206.2 milion, due to vehicles quality and
GB`s Available after-sales service.
Why 3W is Egypt ?

Motorcycles are the main transportation means for

many families unable to afford passenger cars` prices
and it also assist in conducting small delivery
businesses. While, three-wheelers are Egypt`s informal
economy exclusive vehicle and main sponsor. Such
vehicles come to satisfy the country`s crucial need for
lower-income class citizens to conduct small
businesses, it also help in penetrating the inaccessible
slums and in sometimes play ambulances roles.
 GB Three Wheeler Sales Volume
85,183

68,527
65,988 66,440
61,722 60,801 61,068

42,592
40,805
37,575 36,615

26,790

13,170

5,357

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
EGYPT vs INDIA

INDIA EGYPT

Population 1299 Million 92.8 Million

GDP Growth Rate 1.60% 5.30%
GDP 2263.79 USD Billion 336 USD Billion
GDP Per Capita 1861.5 USD 2724 USD
Unemplyment rate 3.46% 11.30%
Living wage individual 168.65 USD/Month 62.95 USD/Month
Interst Rate 6% 17.75%
Inflation rate 5.07% 17.10%
Government Debt to GDP 69.50% 92.30%
Market Type

The oligopolistic nature of the Indian Three wheeler

industry and the propensity of the major players to
increase their share. In a rapidly growing three
wheeler industry, especially in developing economies
like India, it is extremely important to analyze the state
of competition to check whether a few firms may
increase their dominance and also the implications of
after sale services provided by the Three wheeler firms
to consumers.
Supply factors for automobile industry

• Higher the price of automobiles, higher will be the

supply.
• Higher cost of inputs (rubber, steel, labour,
machinery etc) would lead to decline in production
of automobiles.
• Technological advancement would make production
more profitable and hence would favour production.
• Taxes. Change in government policies which are pro
automobile industry like reduction in road tax,
reduction in custom duty over import of raw
materials needed for manufacturing cars etc would
increase supply of automobiles in the market.
Demand factors for automobile industry :

• Higher the price of automobiles, lower the demand

would be.
• Availability of finance option makes it affordable for
consumers who don’t have enough money in hand and
hence increases demand.
• As income of people increases, their demand for
automobiles also increases.
• Better the presence and quality of public transport,
lower will be the demand for private vehicles.
• Demand for petrol and automobiles move together.
Hence higher the price of petrol, lower will be the
demand for automobiles.
Demand factors for automobile industry :

• If income distribution among the population favours

the rich class, automobiles will be more in demand.
• Economic growth and development. As the economy
grows, per capita income, education, urbanization,
lifestyle of people also improves and this has a positive
impact on automobiles demand too.
• Interest rate drop helps very few people to shift from
base to deluxe model, a large shift can be made only if
customers want to take long term loans rather than
short term loans so as to avail interest benefits. There
is negative relationship between interest rate and
demand of commodity.
Factors affect Demand & Supply in Egypt

Governmental Policies and regulations

- Three Wheeler export prohibit May-2014

- Three Wheeler license
- High Price of Fuel
- Currency Floating in Nov-2017
Demand and Supply of Bajaj Auto (India)

Demand
Supply
Demand and Supply
Price

Quantity
 GB Auto 3W Demand and Supply
Price

Qs
Qd

Quantity
 GB Auto 3W Demand and Supply

Demand
33,100

33,000 33,000

32,900

32,800

32,700 Demand
Linear (Demand)

32,600

32,500 32,500

32,400

32,300

32,200
3000 3500 4000 4500 5000 5500 6000 6500
Demand Elasticity
Price elasticity in oligopoly Market

 In kinked-demand model if a firm increases the

price, they become uncompetitive and see a big fall
in demand; therefore demand is price elastic for a
higher price. This means increasing price would lead
to a fall in revenue.
However, if firm decreases price, they would gain market
share. It is assumed in this situation other firms don’t
want to lose market share and so, therefore, they cut
prices too. Therefore, for a price cut, demand is price
inelastic. Because every firm is cutting prices so they
receive no increase in market share.
Demand Elasticity
 Sometimes firms in an oligopoly try to form
a cartel by agreeing to fix prices or to divide the
market among themselves.
 The contestable market model is an oligopolistic
model based on barriers to entry and barriers to exit
that determine the firm's price and output.
 In many industries, there is a dominant firm, and the
other firms often follow the dominant firm in price
changes. Hence, the dominant firm also becomes
the price leader.
Firms in an oligopoly do not often change prices,
certainly not for minor changes in costs, but they will
change prices if cost changes are substantial.
 Devaluation effect on price elasticity - EGYPT

Qty Demand Price

Month Price
Sold Elasticity  
Oct-16 26,000 6100 ---  
Nov-16 31,000 1400 7.09 Elastic
Dec-16 31,100 2500 175.15 Elastic
Jan-17 31,290 2803 18.76 Elastic
Feb-17 31,550 2496 14.00 Elastic
Mar-17 32,000 5394 51.87 Elastic
Apr-17 32,250 4987 10.08 Elastic
May-17 32,500 6128 26.59 Elastic
Jun-17 33,000 4777 16.23 Elastic
Jul-17 33,250 6196 34.27 Elastic
Aug-17 33,500 6856 13.50 Elastic
Sep-17 33,950 6298 6.36 Elastic
Oct-17 34,200 7296 20.01 Elastic
Nov-17 34,400 7069 5.42 Elastic
Dec-17 34,750 6140 13.90 Elastic
 Elasticity

Elasticity

Total Revenue

TR

QTY
Conclusion
Market: India is probably the most willing competitive
country for the automotive industry. Bajaj considered
one of the most popular company among Indian
customers because of its low class vehicles, cheap and
easy servicing, high market penetration, so our
product market considered oligopolistic. Few players
with different specification.
Elasticity: Our product is Elastic.
Inferior Or Normal: is completely inferior that when it
is price go higher the demand decrease, moreover it is
sold only for the low income countries.
References
 https://www.bajajauto.com/
 http://www.ghabbourauto.com/
 https://www.globalbajaj.com/egypt/arabic/
 https
://www.statista.com/statistics/712185/india-three-wheelers-sales-volume-
distribution-by-company
/
 https://
www.techsciresearch.com/report/global-three-wheeler-market/1448.html
 http://journals.openedition.org/articulo/2872
 http://www.autocarpro.in/analysis-sales/-
wheeler-market-flat-growth-fiscal-10892
 https://en.m.wikipedia.org/wiki/Auto_rickshaw
 http://www.siamindia.com/statistics.aspx?mpgid=8&pgidtrail=13
 www.ibef.org
 https://www.globalbajaj.com/egypt/english/about-us/about-bajaj/history/
 https://
www.quora.com/What-are-the-factors-influencing-supply-and-demand-in-t
he-automotive-industry
 https://tradingeconomics.com/egypt/gdp-growth-annual