The Bajaj Chetak was a popular Indian-made motor scooter produced

by the Bajaj Auto company.[2] The Chetak is named after Chetak, the
legendary horse of Indian warrior Rana Pratap Singh.

Originally based on the Italian Vespa Sprint, the Chetak was an

affordable means of transportation for millions of Indian families for
decades and termed as humara bajaj.[3] Around 1980, the Vespa-licensed
design was replaced with an all new in-house design that shared the
same general appearance and style. During its heyday its chief
competitor was LML NV made by LML India as a licensed copy of the
Vespa PX 150. In the face of rising competition from Bikes and Cars,
the Chetak lost ground in India, and production was discontinued in
2005.

Note:- Company has stopped manufacturing this

model.
The Bajaj Chetak 150 MT is an old-time favourite from the
house of Bajaj. This 150cc scooter will be on its way out
by the year 2000. Newer variations are undergoing trials
in the R&D department, but for now, the Chetak is one of
the best-selling two-wheelers in the semi-urban and rural
markets.
A large fuel tank and an average fuel consumption figure
of 42 kpl leads to a reasonable interval between fuel tank
toppings. The problem is the two-stroke engine, which
generates the seven-plus bhp that powers the bike. It
consumes more petrol as compared to the rest. The plus
points are a tough body, low maintenance and initial cost
and good resale value. The minus points are poor
averages, unbalanced ride, stiff gear-shifting, lacklustre
braking and higher pollution levels. This model is not Y2K
proof.

TECHNICAL SPECIFICATIONS OF BAJAJ CHETAK

Engine
Engine : Two stroke/petrol
Transmission : Four-speed
Displacement : 145. 45cc
Tachometer : No
Max Power : 7.48 hp@5500 rpm
Max torque: 1.1kgm@3500 rpm
Ground
Clearance : 145mm
Ignition : Electronic
Dry Weight: 103kg
Fuel tank
Capacity : 6.5 litres
Battery: 12V
F/R suspension : Spring-loaded
Absorber
R/R suspension : Hydraulic absorber
Max Speed : 85kph
Front Tyre size : 3.50x10.4 Pr
Rear Tyre size : 3.50x10.4 Pr
Wheelbase : 1230mm

Message from the president:

We have sold the last of our Chetak scooters and Bajaj Auto will not be
building any more
of these classics. Bajaj Auto has"retired" the Chetak tooling and closed
the plant.
They have consolidated their production into two of their other Indian
factories and have
moved on to production of small engine motorcycles.

There is no truth to the rumor that Bajaj Auto will be making more
Chetaks.
There are still a few Chetaks available at some Bajaj dealers but sales
move
too quickly for us to monitor accurately.

I'm keeping a Legend and Chetak for my personal use, and no, they are
not for sale.

Bajaj Auto continues to supply us with parts and we will continue to

support these fine machines.

The sad passing of a legendary motor scooter ...and life goes on.

Regards,
Al Kolvites
Bajaj Chetak, an Indian-made scooter, is counted among the most selling
two-wheelers in semi-urban and rural markets. Chetak was holds and
influential place in the two-wheeler market of India. It was an affordable
way of transport for decades to millions of Indian families. The name of
Bajaj Chetak Scooter has been derived from the legendary horse Chetak
of the Indian warrior Rana Pratap Singh.

A tough body, low maintenance and initial cost and good resale value
are the key attributes that are related the Chetak bearing trust seal from
the house of Bajaj.

Note: Chetak 150 MT is the old-time model of Bajaj. It was the clone of
Vespa.

Company Stroke Maximum Power Displacement

Bajaj Auto Ltd. 2-Stroke 7.5 bhp (5.93 kW) @ 5500 rpm 145.45 cc

Striking Features
The features of Bajaj Chetak is one of the best among all the scooters. It
had always gone under upgradation according to the latest technological
demand for two wheelers. Few of the features of the Bajaj Scooter are
given below.

• 12 volt electrical system.

• Maximum weight 564 lbs.
• Very low emission 4-stroke engine.
• Rigid monocoque chassis made of high-strength alloy steel.
• Electric and kick start.

Color Variants
Bajaj Chetak Scooters are not very rich in color variants but whatever
color it has is soothing to the eyes. The scooter is available in the market
in the three following colors.

• Silver
• Metallic Jade
• Metallic Black

Technical Specifications
In this table one can find detail information about the dimension of the
scooter, the engine, electrical system, chasis, suspension, brakes, tyres,
and fuel tank.

Engine
Overall
1080 mm
height
Overall
1770 mm
length
Overall
670 mm
Width
Wheelbase 1230 mm
Ground 135 mm
Clearance
Saddle Height 830 mm
Minimum
Turning 1.56 m
Radius
Kerb Weight 103 kg
Engine
Type 2 stroke
Cooling Type Forced Air Cooled
Displacement 145.45 cc
Max Power 7.5 bhp( 5.93 kW) @ 5500 rpm
Max Torque 10.8 Nm @ 3500 rpm
Ignition Type CDI Electronic
Transmission
4-speed, Constant Mesh
Type
Clutch Type Wet Multidisc
Electrical System
System 12V AC
Head Light 35/35W
Horn 12 V AC
Chassis
Chassis Type Monocoque
Maximum
140 kg
Payload
Suspension
Front Variable rate coil spring & double acting Shock Absorber
Rear Variable rate coil spring & double acting Shock Absorber
Brakes
Front Brakes Drum
Rear Brakes Drum
Tyres
Front Tyre
3.50 x 10in - 4PR
Size
Rear Tyre
3.50 x 10in - 4PR
Size
Fuel Tank
Fuel Tank
6 litres
Capacity
Reserve
1.4 litres
Capacity

Bajaj Chetak (1972-2005) :RIP

Brand : Bajaj Chetak

Company : Bajaj Auto Ltd
The brand which ruled the Indian roads have been laid to rest. Bajaj has
officially stopped the production of Bajaj Chetak from December 2005.
The stocks will last may be upto March 2006. The company says that the
product no longer have any relevance to the customer. To quote Rajiv
bajaj " Any one who clings to the past is a failure".
I owned a Chetak: a gift from my father for having secured admission to
MBA program. It was in the year 1996. Later I exchanged it for a bike in
2001. Still Chetak lingers in me ( or rather haunts me) in the form of "
Back Pain".
The brand which was launched in 1972 virtually owned the two wheeler
segment. If reports are to be believed, Chetak was an unavoidable dowry
in 1970's and 80's. It had a waiting period of more than 10 years ( can
you believe it ? ) and now here I am after 34 years, writing the epitaph of
this brand.
The brand which was named after the legendary stallion of the Rajput
king Maharana Pratap, was known for the reliability and sturdiness. The
brand thrived during the license raj with virtually no competition. It was
during 1990-91 that the brand began the journey to the end.
Bajaj Chetak had a huge brand equity . The brand had the persona of a "

work h orse". With reasonable price and the low maintenance

cost made this product a huge hit among the middle class Indians.
Promoted along the base line " Hamara Bajaj", this was the Indian
Family vehicle - a position now owned by Maruthi 800.
But then How can a brand that was so popular and successful fail?
Frankly, I am not sure. But here is what I think about this brand...
The primary reason is that the Brand forgot the customers. Another case
of Marketing Myopia. The company failed to understand the changing
perception of the customers towards scooters. Rather than looking at the
customers, the company focused on influencing Government to block
the opening up of economy. Bajaj never did anything with the product.
For 40 years Chetak had the same look, same quality and style.
During the mid nineties the company realised lately that the segment has
shifted to motorcycles. Scooters were no longer the option. But did the
company made a mistake in discarding the scooter segment ? Looking at
the way the share prices are going, the market thinks that Bajaj Auto

made the right decision. But I think that th ey

made a mistake in leaving the scooter segment completely. Contrary to
expectation, the scooter segment has not died. It has only changed.
Chetak lost its identity some where during the nineties. What should be
the future of the brand : no body knew. It was only in 2004 that
company made any change in Chetak. In 1994 Bajaj introduced Classic
another scooter with same style as Chetak, but failed.
Bajaj never was serious about product development. The R&D spent for
a long time was a miniscule 1%. The average cycle time for the new
product development was 4-5 years compared to 2-3 years of Japanese
competitors.
Even after the opening up of economy, the scooter segment did not
witness much competition.
The players like Vespa did not had much of success in this segment.
Kinetic Honda managed to carve a niche with its gearless scooters.
Another segment which was growing was the scooterette segment which
was dominated by TVS scooty.
Bajaj never seriously looked at customer perception about Chetak. The
product had serious problems like starting trouble and riding comfort.
The " Tilting the chetak to the side for starting " was a common joke.
Did the company do anything for that ? no
There was nothing wrong with the Promotion. " Hamara Bajaj " and "
No one can beat a Bajaj " were famous base lines. There was nothing
wrong with distribution and the pricing was very reasonable. The major
problem was in the first P : Product.
So without addressing any problems regarding the product , can you
expect the customer to buy the product ?
Bajaj was never a leader in technology ( now they are !!!). They never
bothered to and paid the price . Had Chetak pioneered Electric start, had
it provided more riding comfort, it could have survived.
Somebody have just beat the Bajaj........ the customer!

Bajaj Chetak 150 cc Scooter Review

by Mukesh Kumar
(India)

lassic Styling of the Bajaj Chetak 150

I had bought this Bajaj Chetak 150cc scooter five years back and till
now I've had an awesome experience with it. I love this scooter very
much. It has stylish looks and indeed good mileage too! So, one can
have both style and mileage both at the same time.

It is great for going to the market or the movies and having fun with
friends over there. It has a 150cc engine, which makes it powerful
enough for carrying heavy loads as well.

Although it is not suitable for racing competitions, it is an ideal piece for

a small family. Moreover, every part of this scooter is made very stylish
so that one can easily distinguish it. I am very glad to recommend you
this scooter.
 Comments for
Bajaj Chetak 150 cc Scooter Review

Average Rating

Click here to add your own comments

May 31, 2010 Acceleration

Rating by: Brian Fulton @ verizon.net

I love my 05 Chetak 150,But I wish it would

accelerate a little faster. Any tips out there
to help it get out of its own way? Blog
away. I am a man of many motorcycles
and a back injury limits me to scooters.

X Close Editor
May 31, Submitted by: Brian Fulton @ verizon.net
2010
Title
Rating

Comment
I
love my 05 Chetak 150,But I w ish it w ould accelerat
Any tips out there to help it get out of its ow n w ay?
man of many motorcycles and a back injury limits me

Save Edit
Cancel Delete Delete & Ban
 Updating Comments page...
Jul 28, 2009 Scooter buit for off-road riding?
Rating by: Rand

I own a Chinese made scooter and have

not have much trouble with it. I have had
to purchase a few inexpensive parts from
the internet at scooterstock.com but it
always ran well.
However, I have wondered if they make
any small scooters that are street legal but
still designed for light off-road trail riding
(i.e. more aggressive tires and higher
suspension etc.)? I would like to find one
like that to mount on the back of my camp
trailer bumper. Was this Baja such a
scooter?

X Close Editor
Jul 28, Submitted by: Rand
2009
Title
Rating

Comment
I
ow n a Chinese made scooter and have not have mu
have had to purchase a few inexpensive parts from
scooterstock.com but it alw ays ran w ell. How ever,
they make any small scooters that are street legal bu
for light off-road trail riding (i.e. more aggressive tire
suspension etc.)? I w ould like to find one like that to
back of my camp trailer bumper. Was this Baja such
 Save Edit
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Updating Comments page...
Jun 13, 2009 Suitable Replacement
Rating by: Jim Zeiser

About the closest thing to a Bajaj right now

is the Genuine Stella. It has a two stroke
motor and is not available in California.
There will be a four stroke motor soon and
as a scooter with hand shift and hailing
from India, the Stella will be as close to a
Bajaj as you can get

X Close Editor
Jun 13, Submitted by: Jim Zeiser
2009
Title
Rating

Comment
About
the closest thing to a Bajaj right now is the Genuine
tw o stroke motor and is not available in California. Th
four stroke motor soon and as a scooter w ith hand
from India, the Stella w ill be as close to a Bajaj as yo

Save Edit
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Updating Comments page...
Sep 25, 2008 No longer available
Rating by: Kathi
 Unfortunately, Bajaj Auto is no longer
making the Chetak, a true classic. In fact,
I'm not sure they're making scooters at all.

Too bad, because this sounds like a

winner...

You might still be able to find one used if

you look around...

COMPANY PROFILE
 The Bajaj group was founded in 1926 by Jamnalal Bajaj.
 In the mid-1940s, Bajaj Auto Limited(BAL) started as an importer
of two- and
three-wheelers.
 In 1959, the company secured a license from the Government of
India (GoI) to
manufacture two- and three-wheelers.
 In 1960, BTCL was renamed Bajaj Auto Ltd and in the same year it
entered into
a technical collaboration with Piaggio for the manufacture of scooters.
 With its collaboration with Piaggio coming to an end in the early
1970s, BAL
started manufacturing scooters under the Bajaj brand.
BAJAJ CHETAK: A BRIEF INTRODUCTION
BAJAJ CHETAK was a popular
Indian made motor scooter produced
by the Bajaj auto company.

Chetak was the only choice for millions of Indian families as an

affordable way of transport for decades.

The Chetak, BAL's first scooter model under the Bajaj brand, was
introduced in 1972. The Chetak, a geared scooter, had reigned over the
Indian two-wheeler market in the late 1970s to early 1990s

In the 1970s and 1980s, scooters dominated the Indian two-wheeler

market.

Most middle-class Indians preferred scooters because of their durability,

low maintenance costs, and versatility and compared to the motorcycles
available in India were heavier and not as fuel efficient as scooters. and
were even costlier.

WHAT IS PRODUCT LIFE CYCLE?

Productlif e cycle (PLC) has to do with the life of a product in the
market with respect to business/commercial costs and sales measures.
It is based on the 4 pivotal points of its core understanding:
 That products have a limited life.
 Also product sales pass through distinct stages, each posing
different
challenges, opportunities, and problems to the seller.
 The profits rise and fall at different stages of product life cycle.
 Lastly products require different marketing, financial,
manufacturing,
purchasing, and human resource strategies in each life cycle stage.
SCHEMATIC GRAPH OF PLC

STAGES OF PRODUCT LIFE CYCLE

 Introduction stage Firm tries to promote demand for its new
offering, inform the market about it, give free samples to entice
consumers to make a trial purchase, and explain its features, uses,
and benefits.

 Growthstage Sales climb quickly as new customers join early

users who now are repurchasing the item.
 Maturitystage Industry sales eventually reach a saturation level
at which further expansion is difficult.
 Decline stage Sales fall and profits decline.

STAGE I - INTRODUCTION
 Starting Price Quoted in the start was roughly between Rs. 8000 -
9000/-
 The company·s first scooter model, Chetak(intentionally it was
given
the name of Maratha ruler Chatrapathi Shivaji·s horse·s name), was
launched in 1972.
 Chetak remained Bajaj·s flagship brand for over 10 years.
 There was a time when people had to wait hell lot of a time after pre
booking their Chetak.
 The Launch of Bajaj Chetak was mainly targeted at economical
Class
and people could afford it considering its parallel competition in the
same segment market.
 Late 70s had been the Golden period for the Bajaj scooters,
especially the Chetak.
 In 1977 Bajaj Auto claimed to have sold a lakh of Chetaks in just
one
FY.

STAGE II - GROWTH
 Some of the Significant changes brought about in this scooter was
change in many tech specs, mainly compared to its competiton
from Motorbikes, Mopeds which were gaining grounds in term of
market share.

 Over 2 and a half decades until the halt of 1995 the company did

not face any stiff competition from any 2 wheeler market segment,
apart from the introduction of minor changes in its performance
parameters meaning more augmented changes in the scooter itself
like colour some peripheral outer changes in parts

 Some of the competition were from the scooter segments LML

Vespa Scooters, Automobile Products of India's Lambretta.

The Price wars was not the criteria for the competition as the demand
itself
surpassed the supply and in India owning scooter at that time was a
status
symbol.
Bajaj Chetak had targeted the soft spot of what most Indian people in
that

time desired in their two wheelers which was durability, low

maintenance
costs, and versatility, and the ease of its use which made it the most
dependable and flexible transport mode.

Briefly this Scooter is a comfortable riding machine, much

economical to

your bank balance as compared to bikes, long lasting and durable, does
not
need much repairs and when it does the spares are easily available and
inexpensive.
The main marketing strategy used by Bajaj Chetak was mainly
targetting

the emerging middle class in India and adding the feeling of 'we' or the
feeling
of belongingness by strong sentimental slogans like "Hamara Bajaj".
The
Approach of this Marketing Strategy adopted by Chetak was Non-
Pragmatic

STAGE III- MATURITY

 In the late 1990s, the Indian two-wheeler market witnessed a shift
in
consumer preferences.
 The popularity of geared scooters began to wane while that of
motorcycles
soared.
 There were various reasons for the shift -India was undergoing a

demographic change, with the proportion of younger people in the

population growing significantly; the economy was growing, which
increased
the disposable incomes of the middle class; also, many newer models of
motorcycles, with improved designs and modern technology had become
available in the market.

 While these changes were taking place in the market, the features
of
scooters, especially those of the Bajaj Chetak, remained essentially
unchanged.
STAGE IV ± DECLINE
 The primary reason is that the Brand forgot the customers.

Another case of Marketing Myopia. The company failed to

understand the changing perception of the customers
towards scooters. Rather than looking at the customers, the
company focused on influencing Government to block the
opening up of economy. Bajaj never did anything with the
product. For 40 years Chetak had the same look, same
quality and style.

 During the mid nineties the company realised lately that the

segment has shifted to motorcycles. Scooters were no longer

the option. But did the company made a mistake in
discarding the scooter segment ? Looking at the way the
share prices are going, the market

Reasons for Failure?or Decline?

Bajaj never was serious about product development. The

R&D spent for a long time was a miniscule 1%. The average
cycle time for the new product development was 4-5 years
compared to 2-3 years of Japanese competitors.

Even after the opening up of economy, the scooter segment

did not witness much competition.
The players like Vespa did not had much of success in this

segment. Kinetic Honda managed to carve a niche with its

gearless scooters. Another segment which was growing was the
scooterette segment which was dominated by TVS scooty.
The players like Vespa did not had much of success in this

segment. Kinetic Honda managed to carve a niche with its

gearless scooters. Another segment which was growing was
the scooterette segment which was dominated by TVS scooty.

Bajaj never seriously looked at customer perception about

Chetak. The product had serious problems like starting trouble

and riding comfort. The " Tilting the chetak to the side for
starting " was a common joke. Did the company do anything
for that ? No

There was nothing wrong with the Promotion. " Hamara

Bajaj " and " No one can beat a Bajaj " were famous base
lines. There was nothing wrong with distribution and the
pricing was very reasonable. The major problem was in the
first P : Product.

OUR OWN STRATEGY

PRICE:
 Bajaj Chetak's price was truly affordable.

But the new motor cycles entering the two

wheeler segment offered better technology
& fuel efficiency than Bajaj Chetak at
almost same price.

 Price in our view was never a issue associated with this product, it
perfectly suited the profile of the product in the market whether
taken earlier in mid seventies or late nineties as it was according to
its offerings.

 It was perfectly targeting the economical class which was itself a

part of the large mass of population itself, meaning affordable
range.

PRODUCT:
The company should look upon its R&D and improve the
overall looks of Bajaj Chetak.
It should make efforts to change the quality & style of the
scooter to suit the tastes & preferences of its customers.
The product had serious problems like starting trouble &
riding comfort, which need to be eliminated. Auto start feature
which was prominent should have been introduced.
Though counted as efficient in many terms Fuel efficiency

was a major issue. In our view the combustion efficiency of the

scooter needed to be improved and efficiency in terms of
mileage needed a major boost.

PROMOTION& A DVERTISING:
The main marketing strategy used by Bajaj Chetak was

mainly targeting the emerging middle class in India and adding the
feeling of 'we' or the feeling of belongingness by strong sentimental
slogans like "Hamara Bajaj".

The Approach of this Marketing Strategy adopted by

Chetak was Non-Pragmatic
Bajaj Chetak should come out with various schemes &

incentives, no warranty schemes were wailed by the

company or ad-don products and service centers were less
in number which should have been more to ease customer
support and product maintenance centers.

Bajaj history (abridged)

In the early to mid 1960s Vespa outsourced to India to build Vespa
Sprints. The Indian factory had to uphold Vespa's quality assurance and
factory system. The relationship was short lived as legal issues came
into play. The end product was that Bajaj purchased the factory from
Vespa. After this happened the Bajaj badge began to appear. At first,
with any brand transition, the bikes had a Vespa and a Bajaj badge on
the legshield. You can find these bikes in the USA. Or you may be
riding a Vespa Sprint that was made in India and not know it.
As you can see in the photograph above of this classic
Bajaj, it's basically a Vespa Sprint with its trapezoid
headset. It's a handsome bike.
The "Chetak" was named after a famous horse that
belonged to a Indian Prince, I believe. The horse belonged
to him and helped a lot in battle and such. Pictured above
is a 1980s Chetak I believe. In my opinion, much more
handsome than the newer 4-stroke Bajaj Chetaks. These
bikes were 2-stroke and can be found in the states. They
often sell for less than a Vespa of similar model.

In the 1980s Bajaj tried to sell in the USA. It didn't go

well. It returned again in the early 2000s with Al Kolvites
as the president of Bajaj USA. 4-stroke versions were
imported. Bajaj USA died around 2006 and became Argo
USA -- Chinese plastic scoots. A strong Bajaj culture
existed via Bajaj Yahoo Group while the bikes were being
sold. Note: some Bajaj are still available new as 2005
models. Check with dealers. The only thing about the
newer Bajaj's that I could do without is the horncast and a
little more chrome, say floor rail kit and a legshield trim
would have been an added bonus.
Like its predecessor and its competition the Chetaks &
Legends are work horses, like the Vespa P200s, and take
a heck of beating and keep on running. The roads in India
are harsh with pot holes and the Bajaj was built to
withstand the harsh roads and to be easily worked on and
repaired.

Like the Stella (LML), Vespa P-Series, the Chetak is the

last of line of the work horse scooters. The Stella and
Vespa horncasts are much more handsome than the
Chetak and there is more chrome on the other bikes, but I
have spoken with dealers and the overall report is that
the 4-stroke Chetaks have way less problems than its 2-
stroke rivals. I intend to give my one-year-old son my
Chetak when he gets his license. My Chetak should run
for a long long time. I ride hard and it remains to be very
trustworthy and dependable.

If I was to buy my first scooter all over again, I'd buy a

Vespa PX150 from Vespa Mechanicsburg for $3600 (sale
price -- only have 3 left). My wife's Chetak costs $1999
and you just can't beat that price. Now the Chetak is
$3000 and the Stella is $3300. Genuine Scooters runs a
very smart marketing campaign for its Stella, because the
bike uses Vespa aftermarket products. So this makes
upgrades and accessories CHEAPER and easier to find. I
have no intention of selling my Chetak, because it is a
tank of a scoot, but if you're purchasing you should
consider all your options and what you plan to do with
your scoot . . . ie buy a Stella or PX and put a DR177 kit
on it for a cheap speed/power upgrade. Or buy a Vespa
for resale value. If you're looking to be accepted into the
classic/vintage culture either a Vespa P-series or Genuine
Scooter (Stella) will get you in. But if you're looking for a
dependable daily rider that requires next to no
maintenance, a 4-stroke Bajaj Chetak or Legend will
deliver that to you at an affordable price.
If you come across a Bajaj from 1980 or earlier for a good
price (it will be cheaper than a similar Vespa) it is worth
picking up. The vintage crowd will accept you as well. And
the bike is prettier than the newer bikes.

Bajaj Auto Limited

tatistics:
Public Company
Incorporated: 1945 as M/s Bachraj Trading Ltd.
Employees: 17,200
Sales: Rs 42.16 billion ($903.36 million)(2000)
Stock Exchanges: Pune Mumbai Delhi London Berlin Frankfurt
Munich
Ticker Symbols: BAJAJAUTO 490 BJATq.L 893361.BE 893361.F
893361.MU
NAIC: 336991 Motorcycle, Bicycle, and Parts Manufacturing

Company Perspectives:

Our Philosophy: We approach our responsibilities with ambition and

resourcefulness. We organise ourselves for a transparent and harmonious
flow of work. We respect sound theory and encourage creative
experimentation. And we make our workplace a source of pride. We
believe in: Transparency--a commitment that the business is managed
along transparent lines. Fairness&mdashø all stakeholders in the
Company, but especially to minority shareholders. Disclosure--of all
relevant financial and non-financial information in an easily understood
manner. Supervision--of the Company's activities by a professionally
competent and independent board of directors.

Key Dates:

1945: Bajaj Auto is founded.

1960: Rahul Bajaj becomes the Indian licensee for Vespa scooters.
1977: Technical collaboration with Piaggio ends.
1984: Work begins on a second plant.
1998: Bajaj plans to build its third plant to meet demand.
2000: Thousands of workers are laid off to cut costs.

Company History:

Bajaj Auto Limited is India's largest manufacturer of scooters and

motorcycles. The company generally has lagged behind its Japanese
rivals in technology, but has invested heavily to catch up. Its strong suit
is high-volume production; it is the lowest-cost scooter maker in the
world. Although publicly owned, the company has been controlled by
the Bajaj family since its founding.

Origins

The Bajaj Group was formed in the first days of India's independence
from Britain. Its founder, Jamnalal Bajaj, had been a follower of
Mahatma Gandhi, who reportedly referred to him as a fifth son.
'Whenever I spoke of wealthy men becoming the trustees of their wealth
for the common good I always had this merchant prince principally in
mind,' said the Mahatma after Jamnalal's death.

Jamnalal Bajaj was succeeded by his eldest son, 27-year-old

Kamalnayan, in 1942. Kamalnayan, however, was preoccupied with
India's struggle for independence. After this was achieved, in 1947,
Kamalnayan consolidated and diversified the group, branching into
cement, ayurvedic medicines, electrical equipment, and appliances, as
well as scooters.

The precursor to Bajaj Auto had been formed on November 29, 1945 as
M/s Bachraj Trading Ltd. It began selling imported two- and three-
wheeled vehicles in 1948 and obtained a manufacturing license from the
government 11 years later. The next year, 1960, Bajaj Auto became a
public limited company.

Rahul Bajaj reportedly adored the famous Vespa scooters made by

Piaggio of Italy. In 1960, at the age of 22, he became the Indian licensee
for the make; Bajaj Auto began producing its first two-wheelers the next
year.

Rahul Bajaj became the group's chief executive officer in 1968 after first
picking up an MBA at Harvard. He lived next to the factory in Pune, an
industrial city three hours' drive from Bombay. The company had an
annual turnover of Rs 72 million at the time. By 1970, the company had
produced 100,000 vehicles. The oil crisis soon drove cars off the roads
in favor of two-wheelers, much cheaper to buy and many times more
fuel-efficient.

A number of new models were introduced in the 1970s, including the

three-wheeler goods carrier and Bajaj Chetak early in the decade and the
Bajaj Super and three-wheeled, rear engine Autorickshaw in 1976 and
1977. Bajaj Auto produced 100,000 vehicles in the 1976-77 fiscal year
alone.

The technical collaboration agreement with Piaggio of Italy expired in

1977. Afterward, Piaggio, maker of the Vespa brand of scooters, filed
patent infringement suits to block Bajaj scooter sales in the United
States, United Kingdom, West Germany, and Hong Kong. Bajaj's
scooter exports plummeted from Rs 133.2 million in 1980-81 to Rs 52
million ($5.4 million) in 1981-82, although total revenues rose five
percent to Rs 1.16 billion. Pretax profits were cut in half, to Rs 63
million.
New Competition in the 1980s

Japanese and Italian scooter companies began entering the Indian market
in the early 1980s. Although some boasted superior technology and
flashier brands, Bajaj Auto had built up several advantages in the
previous decades. Its customers liked the durability of the product and
the ready availability of maintenance; the company's distributors
permeated the country.

The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc

motorcycle was immediately successful, and the company aimed to be
able to make 60,000 of them a year by 1985. Capacity was the most
important constraint for the Indian motorcycle industry. Although the
country's total production rose from 262,000 vehicles in 1976 to 600,000
in 1982, companies like rival Lohia Machines had difficulty meeting
demand. Bajaj Auto's advance orders for one of its new mini-
motorcycles amounted to $57 million. Work on a new plant at Waluj,
Aurangabad commenced in January 1984.

The 1986-87 fiscal year saw the introduction of the Bajaj M-80 and the
Kawasaki Bajaj KB100 motorcycles. The company was making 500,000
vehicles a year at this point.

Although Rahul Bajaj credited much of his company's success with its
focus on one type of product, he did attempt to diversify into tractor-
trailers. In 1987 his attempt to buy control of Ahsok Leyland failed.

The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S

Champion followed a year later. About this time, the Indian government
was initiating a program of market liberalization, doing away with the
old 'license raj' system, which limited the amount of investment any one
company could make in a particular industry.

A possible joint venture with Piaggio was discussed in 1993 but aborted.
Rahul Bajaj told the Financial Times that his company was too large to
be considered a potential collaborator by Japanese firms. It was hoping
to increase its exports, which then amounted to just five percent of sales.
The company began by shipping a few thousand vehicles a year to
neighboring Sri Lanka and Bangladesh, but soon was reaching markets
in Europe, Latin America, Africa, and West Asia. Its domestic market
share, barely less than 50 percent, was slowly slipping.

By 1994, Bajaj also was contemplating high-volume, low-cost car

manufacture. Several of Bajaj's rivals were looking at this market as
well, which was being rapidly liberalized by the Indian government.

Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The
company was the world's fourth largest manufacturer of two-wheelers,
behind Japan's Honda, Suzuki, and Kawasaki. New models included the
Bajaj Classic and the Bajaj Super Excel. Bajaj also signed development
agreements with two Japanese engineering firms, Kubota and Tokyo R
& D. Bajaj's most popular models cost about Rs 20,000. 'You just can't
beat a Bajaj,' stated the company's marketing slogan.

The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw were

introduced in 1997. The next year saw the debut of the Kawasaki Bajaj
Caliber, the Spirit, and the Legend, India's first four-stroke scooter. The
Caliber sold 100,000 units in its first 12 months. Bajaj was planning to
build its third plant at a cost of Rs 4 billion ($111.6 million) to produce
two new models, one to be developed in collaboration with Cagiva of
Italy.

New Tools in the 1990s

Still, intense competition was beginning to hurt sales at home and

abroad during the calendar year 1997. Bajaj's low-tech, low-cost cycles
were not faring as well as its rivals' higher-end offerings, particularly in
high-powered motorcycles, since poorer consumers were withstanding
the worst of the recession. The company invested in its new Pune plant
in order to introduce new models more quickly. The company spent Rs
7.5 billion ($185 million) on advanced, computer-controlled machine
tools. It would need new models to comply with the more stringent
emissions standards slated for 2000. Bajaj began installing Rs 800
catalytic converters to its two-stroke scooter models beginning in 1999.

Although its domestic market share continued to slip, falling to 40.5

percent, Bajaj Auto's profits increased slightly at the end of the 1997-98
fiscal year. In fact, Rahul Bajaj was able to boast, 'My competitors are
doing well, but my net profit is still more than the next four biggest
companies combined.' Hero Honda was perhaps Bajaj's most serious
local threat; in fact, in the fall of 1998, Honda Motor of Japan
announced that it was withdrawing from this joint venture.

Bajaj Auto had quadrupled its product design staff to 500. It also
acquired technology from its foreign partners, such as Kawasaki
(motorcycles), Kubota (diesel engines), and Cagiva (scooters). 'Honda's
annual spend on R & D is more than my turnover,' noted Ruhal Bajaj.
His son, Sangiv Bajaj, was working to improve the company's supply
chain management. A marketing executive was lured from TVS Suzuki
to help push the new cycles.

Several new designs and a dozen upgrades of existing scooters came out
in 1998 and 1999. These, and a surge in consumer confidence, propelled
Bajaj to sales records, and it began to regain market share in the fast-
growing motorcycle segment. Sales of three-wheelers fell as some states,
citing traffic and pollution concerns, limited the number of permits
issued for them.

In late 1999, Rahul Bajaj made a bid to acquire ten percent of Piaggio
for $65 million. The Italian firm had exited a relationship with
entrepreneur Deepak Singhania and was looking to reenter the Indian
market, possibly through acquisition. Piaggio itself had been mostly
bought out by a German investment bank, Deutsche Morgan Grenfell
(DMG), which was looking to sell some shares after turning the
company around. Bajaj attached several conditions to his purchase of a
minority share, including a seat on the board and an exclusive Piaggio
distributorship in India.
In late 2000, Maruti Udyog emerged as another possible acquisition
target. The Indian government was planning to sell its 50 percent stake
in the automaker, a joint venture with Suzuki of Japan. Bajaj had been
approached by several foreign car manufacturers in the past, including
Chrysler (subsequently DaimlerChrysler) in the mid-1990s.

Employment fell from about 23,000 in 1995-96 (the year Bajaj suffered
a two-month strike at its Waluj factory) to 17,000 in 1999-2000. The
company planned to lay off another 2,000 workers in the short term and
another 3,000 in the following three to four years.

Principal Subsidiaries: Bajaj Auto Finance Ltd.; Bajaj Auto Holdings

Ltd.; Bajaj Electricals Ltd.; Bajaj Hindustan Ltd.; Maharashtra Scooters
Ltd.; Mukand Ltd.

Principal Competitors: Honda Motor Co., Ltd.; Suzuki Motor

Corporation; Piaggio SpA.

BAJAJ GROUP

•The Bajaj group was founded in 1926 by Jamnalal

Bajaj.
•In 1945, Kamalnayan Bajaj, Jamnalal's son, set up

Bachraj Trading Corporation Ltd. (BTCL), a trading

company, to import and sell two- and three-
wheelers. This business continued till 1959.

•In 1959, the company secured a license from the

Government of India (GoI) to manufacture two- and
three-wheelers.
•In 1960, BTCL was renamed Bajaj Auto Ltd. (BAL) and

the company went public. The same year, it entered

into a technical collaboration with Piaggio for the
manufacture of scooters.

•In the mid-1940s, BAL started as an importer of two-

and three-wheelers.

With its collaboration with Piaggio coming to an end

in the early 1970s, BAL started manufacturing
scooters under the Bajaj brand.
•In the early 1960s, BAL, in collaboration with
Piaggio, started manufacturingVespa brand
scooters at its plant near Pune, Maharashtra.

SEGMENTS IN TWO WHEELER MARKET:

LATE 90’s

BAJAJ CHETAK: A BRIEF

INTRODUCTION
•BAJAJ CHETAK was a popular Indian made motor
scooter produced by the Bajaj auto company.
•Originally based on Italian Vespa, Chetak was the
only choice for millions of Indian families as an
affordable way of transport for decades.
•TheC heta k, a geared scooter, had reigned over the
Indian two-wheeler market in the late 1970s to early
1990s and had come to occupy a near-iconic status.
•TheC heta k, BAL's first scooter model under the
Bajaj brand, was introduced in 1972.
In the 1970s and 1980s, scooters dominated the
Indian two-wheeler market.
•Most middle-class Indians preferred scooters

because of their durability, low maintenance costs, and versatility, and

the BajajC heta k name became synonymous with scooters.

•At that time, the motorcycles available in India were

heavier and not as fuel efficient as scooters. They
were also costlier.
•The brand which was named after the legendary
stallion of the Rajput king Maharana Pratap, was
known for the reliability and sturdiness.

The brand thrived during the license raj with

virtually no competition.
•Bajaj Chetak had a huge brand equity . The brand

had the persona of a " work horse". With reasonable

price and the low maintenance cost made this
product a huge hit among the middle class Indians.

DECLINE IN BAJAJ MARKET

•In the late 1990s, the Indian two-wheeler market
witnessed a shift in consumer preferences.
•The popularity of geared scooters began to wane
while that of motorcycles soared.
•There were various reasons for the shift:

1. India was undergoing a demographic change, with the proportion of

younger people in the population growing significantly.

2. The economy was growing, which increased the

disposable incomes of the middle class.

3. Many newer models of motorcycles, with improved

designs and modern technology had become
available in the market.

While these changes were taking place in the

market, the features of scooters, especially those of
the BajajCh etak, remained essentially unchanged.

•The brand thrived during the license raj with

virtually no competition.
•It was during 1990-91 that the brand began the
journey to the end.
•Promoted along the base line " Hamara Bajaj", this
was the Indian Family vehicle - a position now owned
by Maruti 800.
•In January 2006, BAL announced that it had stopped
production of the Chetak.
The " Tilting the Chetak to the side for starting " was
a common joke.
•Scooters were BAL's main products, and when

market preferences shifted to motorcycles, the

company was faced with declining sales and
revenues.
REASONS FOR DECLINE
•The primary reason is that the Brand forgot the
customers.
•Another case of Marketing Myopia. The company
failed to understand the changing perception of the
customers towards scooters.
•Rather than looking at the customers, the company
focused on influencing Government to block the
opening up of economy.
•Bajaj never did anything with the product. For 40
years Chetak had the same look, same quality and
style.
•Bajaj never was serious about product development.
The R&D spent for a long time was a miniscule 1%.
The average cycle time for the new product
development was 4-5 years compared to 2-3 years of
Japanese competitors.
•There was nothing wrong with the Promotion. "
Hamara Bajaj " and " No one can beat a Bajaj " were
famous base lines.
•There was nothing wrong with distribution and the
pricing was very reasonable. The major problem was
in the first P : Product.
•Bajaj never seriously looked at customer perception
about Chetak. The product had serious problems like
starting trouble and riding comfort.
It was believed that the dramatic shift happened
because players like BAL did not pay sufficient
attention to design, R&D, and customer satisfaction.
•The decline was directly related to neglect of this

segment over mileage, contemporary technology,

and non-stop excitement of launch of newer and
newer models offered on the motorcycles platform.
•The biggest drawback of Bajaj Chetak was its
handling during heavy breaking.
COMPETITORS
•The players like Vespa did not had much of success
in this segment.
•Kinetic Honda managed to carve a niche with its
gearless scooters.
•Another segment which was growing was the
scooterette segment which was dominated by TVS
scooty.
•Consequently, by the early 2000s, motorcycle sales
surpassed that of scooters and BAL lost its title of
India's largest two-wheeler company to Hero Honda.
•With the introduction and subsequent popularity of

Honda Motorcycle and Scooter India (HMSI) scooters, especially theAct

iva, a gearless scooter, BAL lost its dominance over the Indian scooter
market.

KINETIC ZOOM
1. 2 stroke- scooter.
2. maximum speed of 73 km/ hr.
3. fuel capacity of 7 litres.
4. works on electric start mechanism.

HONDA ACTIVA
1. 4 stroke- scooter.
2. maximum speed of 80 km/ hr.
3. fuel capacity of 6 litres.
4. works on electric start mechanism.

BAJAJ CHETAK:
1. 2 stroke- scooter.
2. maximum speed of 50 km/ hr.
3. fuel capacity of 6.5 litres.
4. works on kick start mechanism.

BAJAJ MARKETING MIX

•PRICE

1. Bajaj Chetek's price was affordable. But the new

motor cycles entering the two wheeler segment
offered better technology & fuel efficiency than Bajaj
Chetak at almost same price.

PRODUCT
1. The company should look upon its R&D and
improve the overall looks of Bajaj Chetak.

2. It should make efforts to change the quality &

style of the scooter to suit the tastes & preferences
of its customers.

3. The product had serious problems like starting

trouble & riding comfort, which need to be
eliminated.

PROMOTION
Bajaj Chetak should come out with various schemes
& incentives.