Product details

The Indian two-wheeler market was positioned as one of the world''s largest manufacturers of two-wheelers after China and Japan. Among the top players in the Indian two-wheeler sector was Bajaj Auto of the Bajaj group. In 2009, Bajaj occupied second position behind the current leader, Hero Honda. Bajaj remained the leader until 2000 mainly because of its scooter division. After being in business for five decades and making its mark in the market with its flagship model, Bajaj Scooter, it started to lose its ground due to declining sales. Scooter, a boon to the middle class, started to lose its relevance when the bike started to motor its way into the Indian market. People shifted their choice to motorcycles because of looks, design and performance. The eight month sales figure during 2009-10 of the Kristal model (the production of other models had stopped much earlier) was not remarkable. Even though Bajaj was riding high in the motorcycles segment, it posted bad sales in the scooter segment; the sales of Kristal dropped down to 4,084 from 9,332 units in 2008-09. While Bajaj''s scooter segment performance was failing, the overall Indian scooter industry was making a profit, registering a growth of around 10-15%. According to the company sources, the scooter division was not making gains as expected and they saw better prospects and potential in the bike segment. The decline in scooters and focus on bikes signified some valid basis for the company to quit the scooter segment in March 2010. With this background, the case study has tried to trace whether the exit strategy of Bajaj auto was a fair decision or not? It also remained to be seen whether Bajaj Auto''s foray into bikes segment would pay off?