Bajaj Analysis

1

FY10 FY09 Gr.

Motorcycles 2,506,791 1,907,853 31%

Total 2Wh's 2,511,643 1,919,625 31%

3 Wh's 340,937 274,529 24%

Total Units 2,852,580 2,194,154 30%

FY10 FY09 Gr.

Motorcycles 1,781,768 1,276,470 40%

Total 2Wh's 1,785,528 1,286,162 39%

TOTAL

UNITS

Domestic

Units

Units H1 Gr. H2 Gr.

Bajaj 744,000 -5% 1,038,000 109%

Domestic motorcycle market

2

Total 2Wh's 1,785,528 1,286,162 39%

3 Wh's 176,050 135,473 30%

Total Units 1,961,578 1,421,635 38%

FY10 FY09 Gr.

Motorcycles 725,023 631,383 15%

Total 2Wh's 726,115 633,463 15%

3 Wh's 164,887 139,056 19%

Total Units 891,002 772,519 15%

Units

Export

Units

Bajaj 744,000 -5% 1,038,000 109%

Others 2,777,000 22% 2,781,000 23%

Total 3,521,000 15% 3,819,000 38%

Market share for motorcycles in

domestic market improved from

21% in H1 / FY10 to

27% in H2 / FY10

Financial Results ( Rs. in crores )Particulars FY10 FY09 Growth

Net Sales 11509 8437

Other operating Income 412 373

Total Income 11921 8810 35%

Expenditure

Material ( net ) 8055 6449

Employee cost 400 354

Other expenditure 874 805

Total expenditure 9329 7608 23%

EBITDA 2592 1202 116%

% 21.7 13.6

Qt r %

Q1 66.2

Q2 66.2

Q3 68.5

Q4 69.3

F ull year 6 7.7

M at er ial co st

Qt r %

Q1 9.5

Ot her expend it ure

3

Interest 6 21

Depreciation 136 130

Operating Profit 2450 1051 133%

% 20.6 11.9

Other income ( net ) 122 112

2572 1163 121%

Exceptional items :

Expenditure incured on VRS 183 183

Loss on derivative hedging instruments -22 22

Profit before tax 2411 958 152%

Tax 708 302

Profit after tax 1703 656 160%

Earnings per share 117.7 45.2

Q1 9.5

Q2 8.1

Q3 6.7

Q4 5.3

F ull year 7.2

Qt r %

Q1 19.5

Q2 22.0

Q3 22.0

Q4 22.9

F ull year 2 1.7

EB IT D A

Summarized Cash flow

Rs. in crores FY09

Cash and cash equivalents

Opening balance 933

Closing balance 3263

Net change during the year 2330

Earned from operations and treasury 2730

4

Earned from operations and treasury 2730

Outflow : CAPEX 117

Investments : PTBAI & KTM 83

Income tax 700

Dividend 372

Working capital and others (872)

Total outflow 400

Net change 2330

MOTORCYCLESMOTORCYCLESMOTORCYCLESMOTORCYCLES

5

INDEXINDEX

• Industry Analysis and Projections

• Category Projections

• Bajaj Performance• Bajaj Performance

• Brand Strategy

• New Initiatives and Outlook for the Yr 2010-11

6

INDUSTRY ANALYSIS

AND

PROJECTIONS

INDUSTRY ANALYSIS

AND

PROJECTIONS

* 7

INDUSTRYINDUSTRY

• 15 year Trend

• Forecast for next 3 years

• Growth Drivers

8

INDIAN MOTORCYCLE INDUSTRY

(DOMESTIC + EXPORTS)

INDIAN MOTORCYCLE INDUSTRY

(DOMESTIC + EXPORTS)

5217995

6201389

7091545

6544649 6805366

8446591

6,000,000

7,000,000

8,000,000

9,000,000

Motorcycle Industry – Volumes (Yearly Total)

Yearly Total

802266 913956

1176779

1612895

2033147

2861061

3756409

4312751

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

96-97 97-98 98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06 06-07 07-08 08-09 09-10

9

DOMESTIC MOTORCYCLE INDUSTRYDOMESTIC MOTORCYCLE INDUSTRY

4725996

5826678

6586443

5756927

5826816

7340417

24%

46%

34%

15%

21%23%

26%

20%

30%

40%

50%

5000000

6000000

7000000

8000000

Yearly Total

1396895

1733147

2537061

3396409

3898751 13%

-13%

1%

-20%

-10%

0%

10%

0

1000000

2000000

3000000

4000000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Volume Growth Y-O-Y

10

MOTORCYCLE DOMESTIC INDUSTRY -

PROJECTIONS

MOTORCYCLE DOMESTIC INDUSTRY -

PROJECTIONS

6,586,443

7,340,417

8,140,816 (11%)

9,259,922 (14%)

10,476,596 (13%)

6000000

8000000

10000000

12000000

Yearly Total

1,396,895

1,733,147

2,537,061

3,396,409

3,898,751

4,725,996

5,826,678

5,756,927

5,826,816

0

2000000

4000000

6000000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

11

GROWTH DRIVERS (YR 2010-11)GROWTH DRIVERS (YR 2010-11)

• GDP

– 8.5%

• Consumer Confidence

– 55% are Rural

• Crop Production (expected was 260 MT vs Actual near to 230 MT)

• MSP (Major Crops Y-O-Y)• MSP (Major Crops Y-O-Y)

– Sugarcane (33% hike)

– Paddy (11%)

– Wheat (8%)

• Rain (Quantity, Time and Spread)

– 45% are Urban and Semi Urban

• Salary rises

12

CATEGORY PROJECTIONSCATEGORY PROJECTIONS

13

CATEGORY SHARE PROJECTIONSCATEGORY SHARE PROJECTIONS

55%59%

59%

49% 48%

52%

56%

61% 64% 65%

60%

80%

Commuter Deluxe

44%

36%33%

43% 44% 38%

31%

25%

19%

16%

2%6% 8% 8% 9%

10%12% 14%

17%

19%

0%

20%

40%

FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

Commuter Std Commuter Deluxe Sports

Commuter Standard

Sports

14

CATEGORY VOLUME PROJECTIONS (MA)CATEGORY VOLUME PROJECTIONS (MA)

286476271616

299110391656

440961

300000

400000

500000

Segment Volumes

Commuter Deluxe

102713 109109

117391

172275

214524

209422

150622

120184 118263

108544

129166

179196208899

199079

234738

4036 17987 26901 3269843663

55568 59500 67714 102449

128896

0

100000

200000

FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10 FY 2010-11

Commuter Std Commuter Deluxe Sports

Commuter Standard

Sports

15

BAJAJ PERFORMANCEBAJAJ PERFORMANCE

16

BAL PERFORMANCEBAL PERFORMANCE

• Overall

• Category Wise

17

OVERALL (MA)OVERALL (MA)

353190 404052

492925

551467

481738

487008

611679

23.0% 24%24%

30%30%

31%

29%

22%

24%

20.0%

25.0%

30.0%

35.0%

450000

600000

750000

Overall

235916

306293

353190 404052

54292

72164 85303

120807145578

173242137587

106369

148479

0.0%

5.0%

10.0%

15.0%

0

150000

300000

FY 2001-02 Fy 2002-03 FY 2003-04 FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 FY 2008-09 FY 2009-10

Industry BAL MS%

18

COMMUTER STANDARD (MA)COMMUTER STANDARD (MA)

172275

214524

209422

150622

40% 41%

33%

44%

36% 39%

38%

38%

30% 30%

35%

40%

45%

50%

150000

200000

250000

Commuter Standard

102713

109109117391

120184

118560

41411

44583

39050

7617878135

81245

5706645169

35506

0%

5%

10%

15%

20%

25%

0

50000

100000


Industry BAL MS%

19

COMMUTER DELUXE (MA)COMMUTER DELUXE (MA)

286476 271616

299110

390892

15%

20%

18%

17%

15%

20%

25%

300000

400000

500000

Commuter Deluxe

129166

179196

208899

199079

234738

286476 271616

11867

1226921343 21448

3597856131

48148 32374

66366

9%

7%

10%

11%

11%

0%

5%

10%

0

100000

200000


Industry BAL MS%

20

SPORTS (MA)SPORTS (MA)

102447

85%

93%

71%

72%

65%

54%60%

70%

80%

90%

100%

100000

150000

Sports

4036

17987

2690132698

4366355568

59500

67714

1014

1531224910 23181

31465 35865

32373

28825

4660725%

43%

46%

0%

10%

20%

30%

40%

50%

0

50000


Industry BAL MS%

21

PORTFOLIO COMPOSITIONPORTFOLIO COMPOSITION

76%

62%

46%

63%

54%

47%

42%

54%

46%

53%

59%

58%

76%

50.0%

60.0%

70.0%

80.0%

90.0%

Discover + Pulsar

41%

42%

24%24%

38% 37%

0.0%

10.0%

20.0%

30.0%

40.0%


Platina + CT100 Discover + Pulsar

Platina + CT 100

22

BRAND STRATEGYBRAND STRATEGY

23

TWO BROAD

MOTORCYCLE SEGMENTS

TWO BROAD

MOTORCYCLE SEGMENTS

Commuter Sports83% of the 17% of the MarketShare of the 83% of the

Market17% of the Market

Middle age, Middle class

Share of the

Market

Target Group Youth

Available

Offerings

Frugal, utility and value

offerings

Premium, stylish and feature

rich bikes with loads of

excitement value

Geography Mainly urban Semi-Urban , Rural

24

BRAND STRATEGYBRAND STRATEGY

• Commuter : Discover

• Sports : Pulsar• Sports : Pulsar

25

DISCOVER – ATTACK STRATEGYDISCOVER – ATTACK STRATEGY

26

To upgrade the commuters to experience

Bigger & Sportier bikes.

Bajaj Idea

Bigger & Sportier bikes.

27

Two step upgradation plan

Upgrade 1 : Feature upgradation – Discover 100

Upgrade 2 : Experience upgradation – Discover 150

28

Upgrade 1 : Feature Up-gradation Upgrade 1 : Feature Up-gradation

29

FEATURE UP-GRADATION :DISCOVER 100FEATURE UP-GRADATION :DISCOVER 100

30

THE CONSUMERS WERE EXCITED….THE CONSUMERS WERE EXCITED….

Making new High

•6 Lacs Discovers sold in record time of 250 days.

•The Fastest growing bike ever.

MONTHVOLUME

31

REASONS BEHIND SUCCESS OF

DISCOVER 100

On-road mileage of 80 Kmpl

Long Wheelbase

DTS-Si Engine

5 Speed Gear Box

Nitrox Suspension

Electric Start

All these at a price of Rs. 41736 : An unbeatable value for money32

Attains new milestone in April ‘10

Discover becomes The 2nd largest selling

brand brand

33

And now….

Upgrade 2 : Experience Up-gradation Upgrade 2 : Experience Up-gradation

34

EXPERIENCE UP-GRADATION :

DISCOVER 150

EXPERIENCE UP-GRADATION :

DISCOVER 150

35

DISCOVER 150 :

EXCITEMENT PER LITRE

DISCOVER 150 :

EXCITEMENT PER LITRE

On-road mileage of 65 Kmpl

Disk Brake

145 cc DTS-i Engine

Wider Rear Tyres

Dark Tone Sporty Graphics

All these at a price of Rs. 46000 (Ex-showroom Delhi)36

Discover 150 Shine Passion Pro Glamour

Engine CC 144.8cc 124.6cc 97.2cc 124.7cc

Max Power [Ps @ rpm] 13.0 @ 7500 10.4 @ 7500 7.8 @ 7500 9.0 bhp @ 7000

10.35 Nm @ 4000

PERFORMANCE CHECK AGAINST

KEY COMPETITION

PERFORMANCE CHECK AGAINST

KEY COMPETITION

Max Torque [Nm @ rpm] 12.75 @ 5500 10.78 @ 5500 8.04 @ 450010.35 Nm @ 4000

rpm

Wider tires Yes No No No

Gears 5 4 4 4

Price

(Ex showroom Delhi)

Rs 46,000/-

Elect. Start + Alloy

wheel + Disc

brake

Rs 50,787/-


wheel + Disc

brake

Rs 44,800/-


wheel + Drum

brake

Rs 48,250 /-


wheel + Disc

brake

37

PULSAR – DEFENSE STRATEGYPULSAR – DEFENSE STRATEGY

38

PULSAR : DEFENSE STRATEGYPULSAR : DEFENSE STRATEGY

• Up the Benchmark

– Fastest Indian : Top Speed – 145 km/hr

– Pulsar Stunt Mania– Pulsar Stunt Mania

• Expand the Category

– Pulsar 135 LS

39

PULSAR VOLUMEPULSAR VOLUME

35328

41663

39214

52022

49437

44349

38013

65002

55022

63353

61687

40000

50000

60000

70000

24233

35328

38194

38013

0

10000

20000

30000

Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10

40

MAJOR INITIATIVES

AND OUTLOOK FOR YEAR 2010 – 11

MAJOR INITIATIVES

AND OUTLOOK FOR YEAR 2010 – 11

41

MAJOR INITIATIVESMAJOR INITIATIVES

Actions 2009-10 2010-11

1. New Products

Discover 100 a

Pulsar 135 LS a

Platina 125 a

Discover 150 a

2. Quality

Oil Frequency Reduction (From 5000 Km to 10000 Km) a aOil Frequency Reduction (From 5000 Km to 10000 Km) a a

Service Frequency Reduction (From 2500 Km to 5000 Km) a a

3. Network

Dealers Expansion (10% increase) a a

Secondary network Quality up gradation (RSO‘s to ASC’s) a

4. Brand

Twin Brand Strategy

•Pulsar a a

•Discover a a

5. Customer Finance (Direct Cash Collection)

850 ASC’s offer DCC model a a 42

OUTLOOK FOR YR 2010 – 11OUTLOOK FOR YR 2010 – 11

• Industry Estimated to grow at 11% to 15%

• Discover 150 will further grow our Commuter Segment

market share

• Pulsar market share will continue to be 50% +• Pulsar market share will continue to be 50% +

• Discover - Pulsar proportion will continue to grow in Bajaj

Domestic Portfolio

43

44COMMERCIAL VEHICLE BUSINESS

SCV Industry

• Growth at 13%

CAGR• Drivers –GDP growth, Hub & Spoke model,Poor public transport, Replacement triggered byavailability of alt. fuel

4Wh

45%

Growth Drivers & characteristics - SCV Industry

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

Cargo 1.44 1.96 2.33 3.05 2.94 2.34 3.01

Pass 2.50 2.54 2.99 3.33 3.50 3.97 5.36

2.50 2.542.99 3.33 3.50

3.97

5.36

1.441.96

2.33

3.05 2.94 2.34

3.01

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

No

of V

eh (

Lacs

)Year

45% 3Wh55%

Passenger

• Growth at 15%

CAGR

• Primarily a rural

people mover

Long trip distance

Cargo

• Growth at 30%

CAGR

• Versatile vehicle

suitable for both

intra and inter city

45% 55%

Passenger

• Growth at 13%

CAGR

Growth driven by

diesel/Incity

passenger

Cargo

• De-Growth at

-3% CAGR

• Affected by

launch of a more

versatile vehicle

81% 19%45COMMERCIAL VEHICLE BUSINESS

Principal application of 3 wheelers/Like

Segment Primary uses Fuel used BAL position Forecast 3yr

CAGR

In-city Home-Office-

Home

Shopping

School children

Home-Railway

Petrol/LPG/CNG Leader –about

90% market share

10%

There are three distinctly different applications, currently needing

different value propositions and catering to distinctly different customer segments and

hence needing different strategies

station/Airport-

Home

Rural Stage coach Diesel 23% market share 11%

Cargo Wholesaler to

retailer

Retailer to end

user

Distribution

Diesel/ CNG Marginal presence -6%


In city

• Auto rickshaws offer an economical transportation to people

• They make a good value proposition to all stake holders

1 1.5 2 2.5 3 3.5 4 4.5 5 5.5 6 6.5 7 7.5 8 8.5 9 9.5 10 10.5 11 11.5 12 12.5 13 13.5 14 14.5 15

Rs / Km

Non - AC ACCall Taxi

• They make a good value proposition to all stake holders

– Attractiveness to operators/users

– Attractiveness to transport and city planners

– Attractiveness to Environmentalists


In city (cont)• Opportunities

– Heavy traffic congestion on city roads.

– Greater realization of the need for sectoral reforms among policy planners.

– Growth of population

– Growth of cities

– Resource limitation in expanding bus fleet and/ or providing other means of mass

transport.

– CNG availability in more cities towns leading to a huge replacement/Fresh demand.– CNG availability in more cities towns leading to a huge replacement/Fresh demand.

• BAL Plans– Set & raise industry standards of excellence in products, service, quality and innovation

– Wider product range – RE 145 family, RE 205 family (07 products)

– Investment in technology development and emission management --- GDI, CNG and

LPG versions optimized for use with alternate fuels and not merely tuned to run on

alternate fuels

– Cutting down on dead weight further by optimized engineering and use of alternate

materials.


Rural -- Current vehicle usage

Magic

RE 445 L

Ape

RE 445 LApe

Jeeps

No

of P

ass.

Car

ried

(avg

)

Magic

Magic

Jeeps

14 +

12

10

• Small 3WH are used for distances < 10 KMs & upto 8 passengers

• Larger 3+1 3WH are used upto 30 KMs lead & upto 12 passengers

• Magic/jeeps is for longer leads (40 – 60 Kms)

RE 445 D RE 445 M

RE 145/205

<10 <20 30 40 >60

8

6

No

of P

ass.

Car

ried

(avg

)

Trip Distance

Ape

Magic


Rural Passenger• In suburban and rural areas 3W are primarily used as substitutes for

buses.

• They thrive because of very poor public transport (Poor Frequency

Impatience?) and on shorter trip distances.

• They carry from 6-15 passengers. Availability of passenger per trip

decreasing as population of 3w increasing

• They compete with host of substitute products doing the same thing • They compete with host of substitute products doing the same thing

i.e. act as substitute for buses eg. jeeps etc.

• Success here in future would depend on providing a vehicle with right

space for, keeping costs low, best fuel efficiency reasonable revenue

to give highest earnings under the given operating conditions.


Rural (cont)• Opportunities

– Inability of State Governments to provide the required number of buses

– Lack of political will to privatize public transport and free up fares

– Increasing number of three wheelers on these routes bringing down load

availability from 10-12 to 6-8 people for 80% of the trips.

– Lack of connectivity from villages to highways leading to a need for feeder

vehicles.

• BAL Plan– Use the ‘RE’ equity to gain leading market share over a two year time frame.

– Developed and launched LPG/CNG versions of RE445M products to be ready

when environmental concerns spread to upcountry markets.


BAL Marketing plans – Brand and Identity• RE to stand for MORE ( Product portfolio upgraded/created new, First to meet Emission

norms effective 1st april )– More mileage

– More space

– More earnings

– More comfort

– More service points

– More customer facilitation

• Beginning FY 11 we will building the brand ‘RE’ so customers start associating it with

‘MORE’ of all they seek.‘MORE’ of all they seek.

• New CI


Marketing plans -- Access

• An expansion of network being implemented

2009-10 2010-11

Dealers 152 183

Dealer branches 327 403Dealer branches 327 403

Sales outlets 265 329

ASCs/CSTs 384 630


Marketing plans -- Financing

• A sharp focus on making competitive finance options available to our

customers

2009-10 2010-11

Nationalized Banks 25% 35%

Dealer funding (No. 10 20Dealer funding (No.

of dealers)

10 20


The CNG boon

• Rapid progress in in the CNG

Pipeline.

• Over 100 City Gas Distribution

(CGD) contracts awarded and under

implementation.

• Huge replacement potential• Huge replacement potential

• BAL best placed to exploit the huge

replacement demand that would

inevitably be created

CGD contracts awarded


BAL’s view of the future of 3W passenger business

• 3W passenger business will grow at a healthy rate

• 3W passenger vehicles will play a significant role in people movement in

• both In-city and rural segments

• Growth will be triggered and sustained due to following favorable factors:

– Emission concerns will force policy makers to acknowledge and recognize the

favorable emission values, more specifically the green house gases, of the

Autorickshaw.Autorickshaw.

– There is no substitute for a cheap and economical mode of transport in a

heavily layered socio-economic structure as in India.

– Heavy traffic congestion and the lack of resources and space for roads in most

Indian cities will force city and traffic planners to relook at strategy for urban

mobility, Public transport like metro trains and buses to be supplemented by

last mile transportation mode like 3w..


Summary of BAL’s medium term strategy for CV business

• We will stay focused as specialist on the passenger segment.

• We see this product category continuing to play a significant role in

people movement both in Cities/towns and short distance inter-town

because of the values and compulsions enumerated earlier.

• We intend to continue our domination of In-city segment

• In the rural passenger movement, we intend to gain significant • In the rural passenger movement, we intend to gain significant

market share through a combination of product and marketing

initiatives.

• Making finance available at competitive interest rates


AN IDEA

WHICH PROVIDED MOBILITY TO INDIA

WILL NOW

ALSO ‘GREEN’ INDIA!!

THANK YOU

CLEAN MACHINE


International BusinessInternational Business

59

Volume Trends

500,000

600,000

700,000

800,000

900,000

1,000,000

Vo

lum

es

Overall CAGR- 37%

CAGR-38%

CAGR-26%

2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

MCY 53,366 90,210 130,949 174,923 301,775 482,030 633,463 726,115

CV 40,875 65,797 65,767 75,447 140,645 136,315 139,056 164,887

TTL 94,241 156,007 196,716 250,370 442,420 618,345 772,519 891,002

0

100,000

200,000

300,000

400,000

500,000

Vo

lum

es

60

FY 10 Performance

Region Wise

9%

Product Wise

38%

19%

51%

15%

25%Africa & ME

LAmerica

S Asia

SE Asia

12%8%

23%

19%

Boxer

Discover

Pulsar

M/C Others

CV

Category 2009-10 Growth

M/C 726,115 14.6%

CV 164,887 18.6%

Total 891,002 15.3% 61

Addressed Markets

Region Wise Competition Wise

6% 15%18%

37%

19%

20%

18%AFRICA

Middle East

LA

SE ASIA

SOUTH ASIA

Africa & ME Contribute 56% of the market Chinese motorcycle has 67% of the world market

Note: China/ Non EU /Brazil/Pakistan markets have not been included

67%

Bajaj

Chinese

Japanese

62

International Business Approach

• Africa– Deeper penetration through exclusive sales network

– Ensure after sales reach and repairability

– Build Boxer brand

– Develop new markets for CV

• Asia– Defend high shares. Drive growth through penetration in Bangladesh– Defend high shares. Drive growth through penetration in Bangladesh

– Indonesia : rejig portfolio with Pulsar 135. Reposition Pulsar brand.

• Latam– Focus on Pulsar and Discover brands

– Selectively strengthen routes to market

• Invest in “ last point capability”

• Develop strategies for larger new markets

63

Thank youThank you

No part of this presentation is to be circulated, quoted, or reproduced for any distribution without prior written

approval from Bajaj Auto Limited, Mumbai-Pune Road, Akurdi, Pune-411 035, India.

Certain part of this presentation describing estimates, objectives and projections may be a “forward looking

statement” within the meaning of applicable laws and regulations. Actual results might differ materially from

those either expressed or implied. This material was used by Bajaj Auto Limited during an oral presentation; it is not

a complete record of the discussion.

64

Documents

Bajaj Analysis