A PROJECT REPORT ON

AUTOMOBILE INDUSTRY
IN INDIA
(SPECIAL FOCUS ON
BAJAJ PULSAR BIKES)

SUBMITTED TO :
Prof. Ms.Simran sethi
(Faculty of Managerial economics )
BY GROUP 1
NIHAREIKA SINHA
PADMADEVI
SAURABH PANDEY
GAURANG SAHLOT
ISHA VASHIST
SIRAJ SIDDIQUI
1
 INDEX

1. ACKNOWLEDGMENT……………………………………….
………………3
2. INTRODUCTION………………………………………………….
……………4
3. COMPANY PROFILE(BAJAJ AUTO LTD)
…………………………..14
4. OBJECTIVE OF
STUDY……………………………………………..……….18
5. IMPORTANCE OF
STUDY………………………………………………….18
6. METHODOLOGY……………………………………………………
………….19
7. MARKET SHARE AND GROWTH
RATES………………………….20
8. MARKET
STRUCTURE……………………………………………………….2
2
9. PRIMARY DATA
ANALYSIS……………………………………………….23

2
10. SALES
FORECASTING……………………………………………………
47
11. CORRELATION……………………………………………………
…………55
12. HERFINDAHL
INDEX…………………………………………………….56
13. PRICEANALYSIS…………………………………………………
………… .58
14. CONCLUSION………………………………………………………
…………59
15. APPENDIX……………………………………………………………
………….72
16. REFERENCES……………………………………………………
……………..73

Acknowledgement
3
We are extremely grateful to Ms. Simran Sethi for providing us
the honor of carrying out the project, which helped us to put our
learning’s into experience. Without her guidance we would not
have been able to proceed with our project in the right direction.

We would like to express our sincere regards to the staff of

LBSIM, New Delhi, whose help and guidance enables us to
know what exactly consumer’s preference towards television is
all about.

We would also like to thank our family friends and relatives

who have helped us and supported us in all possible ways.

A Project report needs co-operation, guidance and experience of

many more other than the persons whose name appears on the
cover, we would like to thank each and everyone who have
helped us in our endeavor.

INTRODUCTION

4
The Indian automotive industry consists of five segments: commercial
vehicles; multi-utility vehicles & passenger cars; two-wheelers; three-
wheelers; and tractors. With 5,822,963 units sold in the domestic market
and 453,591 units exported during the first nine months of FY2005
(9MFY2005), the industry (excluding tractors) marked a growth of 17%
over the corresponding previous. The two-wheeler sales have witnessed
a spectacular growth trend since the mid nineties.
Two-wheelers: Market Size & Growth
In terms of volume, 4,613,436 units of two-wheelers were sold in the
country in 9MFY2005 with 256,765 units exported. The total two-
wheeler sales of the Indian industry accounted for around 77.5% of the
total vehicles sold in the period mentioned

Figure 1:Segmental Growth of the Indian Two Wheeler Indust

ry

5
 (FY1995-2004)

After facing its worst recession during the early 1990s, the industry
bounced back with a 25% increase in volume sales in FY1995.
However, the momentum could not be sustained and sales growth
dipped to 20% in FY1996 and further down to 12% in FY1997. The
economic slowdown in FY1998 took a heavy toll of two-wheeler sales,
with the year-on-year sales (volume) growth rate declining to 3% that
year. However, sales picked up thereafter mainly on the strength of an
increase in the disposable income of middle-income salaried people
(following the implementation of the Fifth Pay Commission's
recommendations), higher access to relatively inexpensive financing,
and increasing availability of fuel efficient two-wheeler models.
Nevertheless, this phenomenon proved short-lived and the two-wheeler
sales declined marginally in FY2001. This was followed by a revival in
sales growth for the industry in FY2002. Although, the overall two-
wheeler sales increased in FY2002, the scooter and moped segments
faced de-growth. FY2003 also witnessed a healthy growth in overall
two-wheeler sales led by higher growth in motorcycles even as the sales
of scooters and mopeds continued to decline. Healthy growth in two-
wheeler sales during FY2004 was led by growth in motorcycles even as
the scooters segment posted healthy growth while the mopeds continued
to decline. Figure 1 presents the variations across various product sub-
segments of the two-wheeler industry between FY1995 and FY2004.
6
Demand Drivers
The demand for two-wheelers has been influenced by a number of
factors over the past five years. The key demand drivers for the growth
of the two-wheeler industry are as follows:

▪ Inadequate public transportation system, especially in the semi-urban

and rural areas;
▪ Increased availability of cheap consumer financing in the past 3-4
years;
▪ Increasing availability of fuel-efficient and low-maintenance models;
▪ Increasing urbanisation, which creates a need for personal
transportation;
▪ Changes in the demographic profile;
▪ Difference between two-wheeler and passenger car prices, which
makes two-wheelers the entrylevel vehicle;
▪ Steady increase in per capita income over the past five years; and
▪ Increasing number of models with different features to satisfy diverse
consumer needs.

7
MARKET CHARACTERISTICS

Demand

Segmental Classification and Characteristics

The three main product segments in the two-wheeler category are

scooters, motorcycles and mopeds. However, in response to evolving
demographics and various other factors, other subsegments emerged,
viz. scooterettes, gearless scooters, and 4-stroke scooters. While the first
two emerged as a response to demographic changes, the introduction of
4-stroke scooters has followed the imposition of stringent pollution
control norms in the early 2000. Besides, these prominent sub-segments,
product groups within these sub-segments have gained importance in the
recent years. Examples include 125cc motorcycles, 100-125 cc gearless
scooters, etc. The characteristics of each of the three broad segments are
discussed in Table 1.

8
Table 1

Two-Wheelers: Comparative Characteristics

Scooter Motorcycle Moped

Price*(Rs.
as in
> 22,000 > 30,000 > 12,000
January
2005)

2-stroke, 4-
Stroke Mainly 4-stroke 2-stroke
stroke

Engine
Capacity 90-150 100, 125, > 125 50, 60
(cc)

Ignition Kick/Electronic Kick/Electronic Kick/Electronic

Engine
Power 6.5-9 7-8 and above 2-3
(bhp)

Weight
90-100 > 100 60-70
(kg)

9
Fuel
Efficiency
50-75 50-80+ 70-80
(kms per
litre)

Load
High Highest Low
Carrying

*Ex-showroom Mumbai
Compiled by INGRES

Segmental Market Share

The Indian two-wheeler industry has undergone a significant change
over the past 10 years with the preference changing from scooters and
mopeds to motorcycles. The scooters segment was the largest till
FY1998, accounting for around 42% of the two-wheeler sales
(motorcycles and mopeds accounted for 37% and 21 % of the market
respectively, that year). However, the motorcycles segment that had
witnessed high growth (since FY1994) became larger than the scooter
segment in terms of market share for the first time in FY1999. Between
FY1996 and 9MFY2005, the motorcycles segment more than doubled
its share of the two-wheeler industry to 79% even as the market shares
of scooters and mopeds stood lower at 16% and 5%, respectively.

Figure 2

10
 Trends in Segmental Share in Industry Sales
(FY1996-9MFY2005)

While scooter sales declined sharply by 28% in FY2001, motorcycle

sales reported a healthy growth of 20%, indicating a clear shift in
consumer preference. This shift, which continues, has been prompted by
two major factors: change in the country's demographic profile, and
technological advancements.

Over the past 10-15 years the demographic profile of the typical two-
wheeler customer has changed. The customer is likely to be salaried and
in the first job. With a younger audience, the attributes that are sought of
a two-wheeler have also changed. Following the opening up of the
economy and the increasing exposure levels of this new target audience,
power and styling are now as important as comfort and utility.

The marketing pitch of scooters has typically emphasised reliability,

11
price, comfort and utility across various applications. Motorcycles, on
the other hand, have been traditionally positioned as vehicles of power
and style, which are rugged and more durable. These features have now
been complemented by the availability of new designs and technological
innovations. Moreover, higher mileage offered by the executive and
entry-level models has also attracted interest of two-wheeler customer.
Given this market positioning of scooters and motorcycles, it is not
surprising that the new set of customers has preferred motorcycles to
scooters. With better ground clearance, larger wheels and better
suspension offered by motorcycles, they are well positioned to capture
the rising demand in rural areas where these characteristics matter most.

Scooters are perceived to be family vehicles, which offer more

functional value such as broader seat, bigger storage space and easier
ride. However, with the second-hand car market developing, a
preference for used cars to new two-wheelers among vehicle buyers
cannot be ruled out. Nevertheless, the past few years have witnessed a
shift in preference towards gearless scooters (that are popular among
women) within the scooters segment. Motorcycles, offer higher fuel
efficiency, greater acceleration and more environment-friendliness.
Given the declining difference in prices of scooters and motorcycles in
the past few years, the preference has shifted towards motorcycles.
Besides a change in demographic profile, technology and reduction in

12
the price difference between motorcycles and scooters, another factor
that has weighed in favour of motorcycles is the high re-sale value they
offer. Thus, the customer is willing to pay an up-front premium while
purchasing a motorcycle in exchange for lower maintenance and a
relatively higher resale value.

Supply
Manufacturers

As the following graph indicates, the Indian two-wheeler industry is

highly concentrated, with three players-Hero Honda Motors Ltd
(HHML), Bajaj Auto Ltd (Bajaj Auto) and TVS Motor Company Ltd
(TVS) - accounting for over 80% of the industry sales as in 9MFY2005.
The other key players in the two-wheeler industry are Kinetic Motor
Company Ltd (KMCL), Kinetic Engineering Ltd (KEL), LML Ltd
(LML), Yamaha Motors India Ltd (Yamaha), Majestic Auto Ltd
(Majestic Auto), Royal Enfield Ltd (REL) and Honda Motorcycle &
Scooter India (P) Ltd (HMSI).

Figure 3
Shares of Two-Wheeler Manufacturers in Industry
Sales (FY2000-9MFY2005)

13
Although the three players have dominated the market for a relative long
period of time, their individual market shares have undergone a major
change. Bajaj Auto was the undisputed market leader till FY2000,
accounting for 32% of the two-wheeler industry volumes in the country
that year. Bajaj Auto dominance arose from its complete hold over the
scooter market. However, as the demand started shifting towards
motorcycles, the company witnessed a gradual erosion of its market
share. HHML, which had concentrated on the motorcycle segment, was
the main beneficiary, and almost doubled its market share from 20% in
FY2000 to 40% in 9MFY2005 to emerge as the market leader. TVS, on
the other hand, witnessed an overall decline in market share from 22% in
FY2000 to 18% in 9MFY2005. The share of TVS in industry sales
fluctuated on a year on year basis till FY2003 as it changed its product
mix but has declined since then.

14
Technology

Hitherto, technology transfer to the Indian two-wheeler industry took

place mainly through: licensing and technical collaboration (as in the
case of Bajaj Auto and LML); and joint ventures (HHML).

Table 2

Technological tie-ups of Select Players

Nature of Alliance Company Product

Bajaj Auto Technological tie-up Kawasaki Heavy Industries Ltd, Japan Motorcycles

Technological tie-up Tokya R&D Co Ltd, Japan Two-wheelers

Technological tie-up Kubota Corp, Japan Diesel Engines

HHML Joint Venture Honda Motor Co, Japan Motorcycles

KEL Technological tie-up Hyosung Motors & Machinery Inc Motorcycles

KEL Tie up for manufacturing Italjet, Italy Scooters

and distribution

LML Technological tie-up Daelim Motor Co Ltd Motorcycles

Hero Motors Technological tie-up Aprilia of Italy Scooters

.BAJAJ Auto limited

Bajaj Auto is a major Indian automobile manufacturer. It is India's
largest and the world's 4th largest two- and three-wheeler maker. It is
based in Pune, Maharashtra, with plants in Akurdi and Chakan
(Pune),Waluj (near Aurangabad) and Pantnagar in Uttaranchal. Bajaj
15
Auto makes and exports motorscooters, motorcycles and the auto
rickshaw.

The Forbes Global 2000 list for the year 2005 ranked Bajaj Auto at
1946.

Over the last decade, the company has successfully changed its image
from a scooter manufacturer to a two wheeler manufacturer. Its product
range encompasses scooterettes, scooters and motorcycles. Its real
growth in numbers has come in the last four years after successful
introduction of a few models in the motorcycle segment.

The company is headed by Rahul Bajaj who is worth more than US$1.5
billion.

Bajaj Auto came into existence on November 29, 1945 as M/s Bachraj
Trading Corporation Private Limited. It started off by selling imported
two- and three-wheelers in India. In 1959, it obtained license from the
Government of India to manufacture two- and three-wheelers and it
went public in 1960. In 1970, it rolled out its 100,000th vehicle. In 1977,
it managed to produce and sell 100,000 vehicles in a single financial
year. In 1985, it started producing at Waluj in Aurangabad. In 1986, it
managed to produce and sell 500,000 vehicles in a single financial year.
In 1995, it rolled out its ten millionth vehicle and produced and sold 1
million vehicles in a year.

BAJAJ PULSAR
16
Bajaj Pulsar is a motorcycle brand owned by Bajaj Auto in India. The
two wheeler was developed by the product engineering division of Bajaj
Auto in association with motorcycle designer Glynn Kerr Tokyo R&D.
Currently there are four variants available -with engine capacities of
150cc, 180 and two variants with capacities of 220 cc. More than a
million units of Pulsar were sold by November 2005. A Pulsar 200
variant was discontinued in July 2009. With monthly sales of more than
48,000 units in June 2009, Pulsar is the leader in the 150 cc segment in
India with a market share of 43%.

Before the introduction of the Pulsar, the Indian motorcycle market trend
was towards fuel efficient, small capacity motorcycles (that formed the
80-125 cc class). Bigger motorcycles with higher capacity virtually did
not exist (except for Enfield Bullet). The launch and success of Hero
Honda CBZ in 1999 showed that there was demand for performance
bikes. Bajaj took the cue from there on and launched the Pulsar twins in
India on November 24, 2001. Since the introduction and success of Bajaj
Pulsar, the Indian youth began expecting high power and other features
from affordable motorcycles.

DTSi

DTSi stands for Digital Twin Spark Ignition, a Bajaj Auto trademark.
Bajaj Auto holds an Indian patent for the DTSi technology. The Alfa
Romeo Twin-Spark engines, the BMW F650 Funduro which was sold in
India from 1995 to 1997 also had a twin-spark plug technology, and the
Rotax motorcycle engines,more recently Honda's iDSI Vehicle engines
use a similar arrangement of two spark-plugs. However very few small

17
capacity engines did eventually implement such a scheme in their
production prototypes.

Key players in the Bike segment :

• BAJAJ AUTO
• HERO HONDA
• TVS
• YAMAHA
• ROYAL ENFIELD

Objective of Study
The objective of this research is to determine the customer as well as
retailers preferences regarding different brands of motorcycles which
result in their market share. It involves the study of consumers’ buying
behaviour and attitudes towards a variety of attributes and factors, which
help them in decision-making.
The brand we chose to focus on was BAJAJ AUTO Ltd.’s PULSAR
brand of bikes. We studied the company profile, its market structure, the
brand awareness, growth rates and popularity among consumers so as to
forecast the future sales and understand the growth trends.

18
We designed a questionnaire to survey various dealers and consumers to
understand the demand and supply situation of the bike market.
Secondary data from the internet has also been used for effective
analysis.

Importance of Study

The importance of this study is to practically understand the relevance of

the concepts of managerial economics in the business organisations and
here in the realm of the motorcycles industry. The present market
scenario was analyzed and future demands forecasted using the simple
regression techniques. Also, a comprehensive study of the major factors
involved in this market was conducted so as to see how different and
similar a market structure is from the theories.

Methodology

Primary data collection:

For primary data collection we designed a questionnaire to survey
various dealers and consumers. The objective of survey was to
understand the consumer preferences among various brands of
motorcycles available in the market and the factors affecting consumer
buying process.
The sample size for the survey was around 40-50.

19
Secondary data collection:
Internet was the major source for secondary data. Apart from
understanding the bike industry in general and Bajaj in specific, our
major task was to analyse the consumer demand for Bajaj’s PULSAR’s
brand and project the future sales for the company. We have used the
trend projection and exponential forecasting technique to predict the
sales.

Market share and Growth rates

Two- wheeler sales in the country have sky rocketed in the recent years,
and the annual sales of motorcycles in India expected to cross the 10
million mark by 2010. The low penetration of two-wheelers in the
country 31 two-wheelers per 1000 citizens (2004) leaves immense scope
for the growth of the market. Overall the industry sales of two-wheelers
have grown by 15% from 6.57 million in 2004/2005 to 7.57 million in
2005/2006. The buoyant Indian economy with a growth rate of around

20
8% per annum is further expected to fuel the growth of two wheelers in
the country.
The share of motorcycles have increased over the years, while that of other two-
wheelers like geared scooters, scooterettes and mopeds have shown a negative
growth or remained stagnant. The two-wheelers have penetrated 7% of rural house
hold and 24% of urban markets, thus it leaves an immense scope for the market to
grow.
Bajaj Auto one of the leading producers of automobiles in the country has been
able to sell close to 2.3 million vehicles in 2005/2006, the sales of the company
grew by almost 31%. The company registered a 32% growth in the sales of
motorcycles much above the industry average of 19%. Bajaj Auto has emerged as
a market leader in the entry level or price segment motorcycle with the Bajaj CT
100 accounting for nearly 40% of the market share. It also commands a 62%
market share in the premium segment of motorcycles with products like the Bajaj
Pulsar DTSI. TVS Motors which has lots of firsts to its credit in the two-wheeler
sector in the country was able to sell 1.34 million units during the same period thus
registering an overall growth of 15% from the previous year. In the motorcycle
segment the company's growth in sales was in sync with the industry average.

f this figures have daunted you the best is yet to come, the country leader
in two-wheelers hero honda have crossed the three million mark during
the year 2005/2006 which is a good few lakhs more than its nearest
competitor Bajaj Auto. The company accounted for nearly 40% of then
two-wheeler market. In the motorcycle segment the company has been
able to attain a market share of about 50%. The segment in which hero
honda has emerged as a clear winner is the Deluxe segment, which is the
largest segment in the motorcycles category, with its flagship family of
motorcycles splendor selling over 1.2 million units which is just a shade
less than all the two wheelers sold by TVS during the same year.

The motorcycle category is expected to see a further growth and

according to industry experts it will drive all other category of two-

21
wheelers to the periphery.

The table below shows the over all trend of Industry Sales over a 5 year
period. The figures are provided by the Society of automobile
Manufactures Association (SIAM).
Two-wheeler domestic sales trend

Motorcycles

2001-02 2002-03 2003-04 2004-05 2005-06

2887194 3647493 4170445 4964753 5815417

MARKET STRUCTURE
Market Structure

This industry is a high volume, medium growth sector characterized by

excess/ idle capacities owing to in efficient operations. Imports have not
been influencing prospects, as high government regulations limit this .

22
Characteristics

• BIKES : primarily a commodity market - price sensitive

• Effective distribution chain - through a simple network of dealers
and franchises.
• Regulation - Emission norms as well as import regulations are in
existence.
• Market - Urban areas are the largest market for Pulsar, followed by small
towns and then rural centres.

The market of motorcycles shows a monopolistic structure due to the

following factors:

• Different and many players in the market

• Differentiated products.

• Prices charged are different.

• The competition is a non price competition i.e on the basis of

advertising and delivering differentiated products.

PRIMARY DATA ANALYSIS

1. Age group classification of customers preferring Bajaj Pulsar

18-24 24%

23
24-30 38%

30-36 19%

ABOVE 36 19%

As is clear the maximum buyers are of the age group 24-30 , hence it
can be interpreted as being popular in college going youth.
2. Bikes owned (categorisation)-
pulsarbajaj Splendor

Apache Unicorn

cd-dawn enfield

bullet(old)hunk enticer

ct100 CBZ

Pulsar DTS i hero honda

3.ANUAL HOUSEHOLD INCOME

<I LAKH 0%
1-3 15%
LAKH
3-5 35%
LAKH
5-10 35%
LAKH
>10 15%
LAKH

24
 incomegroupshareof survey

40%
35%
% share

30%
25%
20% Series1
15%
10%
5%
0%
<I LAKH 1-3LAKH 3-5LAKH 5-10 >10LAKH
LAKH
income group

incomegroupshareofsurvey

<I LAKH
1-3LAKH
3-5LAKH
5-10LAKH
>10LAKH

Which shows that a majority group belonging to the pulsar kind of bikes
is more from the income group category 3-5 & 5-10 lakh group.
Moreover none of the customer was from < 1 lakh category which is also an
important finding from the marketing point of view.

Summary report (graphical representation of collected data)

4.purpose of the bike

(office/traveling/household/adventure/other)

25
 1 LOWEST 30%
-

2 10%

3 15%

4 5%

5 HIGHEST 40%
-

LOWEST HIGHEST

1 - LOWEST 5%

2 20%

3 35%

4 40%

5 - HIGHEST 0%

26
 LOWEST HIGHEST

1 - LOWEST 1 5%

2 9 45%

3 1 5%

4 6 30%

5 - HIGHEST 3 15%

LOWEST HIGHEST

OTHER

1 - LOWEST 33%

2 0%

3 33%

4 0%

5 - HIGHEST 33%

27
 LOWEST HIGHEST

PLEASE SPECIFY THE OTHER FACTOR

College, small town movement, status ,shopping

5.Buying decision

28
Mileage/looks/brand/service/price
1 LOWEST 0%
-

2 0%

3 30%

4 25%

5 HIGHEST 45%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 0%

3 25%

4 35%

5 HIGHEST 40%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 0%

3 20%

4 45%

5 HIGHEST 35%

29
 -

LOWEST HIGHEST

1 LOWEST 0%
-

2 15%

3 55%

4 25%

5 HIGHEST 5%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 0%

3 40%

4 30%

5 HIGHEST 30%
-

LOWEST HIGHEST

30
6.Purchasing decision

Friends/family/dealer/adventure/other

1 LOWEST 0%
-

2 5%

3 55%

4 0%

5 HIGHEST 40%
-

LOWEST HIGHEST

31
 1 LOWEST 15%
-

2 15%

3 25%

4 20%

5 HIGHEST 25%
-

LOWEST HIGHEST

1 LOWEST 25%
-

2 40%

3 30%

4 5%

5 HIGHEST 0%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 10%

3 50%

4 15%

5 HIGHEST 25%
-

32
 LOWEST HIGHEST

OTHER FACTORS

1 LOWEST 75%
-

2 0%

3 0%

4 25%

5 HIGHEST 0%
-

LOWEST HIGHEST

PLEASE SPECIFY THE OTHER FACTOR

College, work requirements

33
7.Chosen media
Television/hoarding/print media/internet/other

1 LOWEST 0%
-

2 0%

3 0%

4 15%

5 HIGHEST 85%
-

LOWEST HIGHEST

1 LOWEST 5%
-

2 15%

3 20%

4 45%

5 HIGHEST 15%
-

LOWEST HIGHEST

34
 1 LOWEST 0%
-

2 5%

3 10%

4 60%

5 HIGHEST 25%
-

LOWEST HIGHEST

1 LOWEST 30%
-

2 20%

3 20%

4 20%

5 HIGHEST 10%
-

LOWEST HIGHEST

OTHERS

35
 1 LOWEST 50%
-

2 25%

3 25%

4 0%

5 HIGHEST 0%
-

LOWEST HIGHEST

IF OTHERS PLEASE SPECIFY

Radio,pamphlets

8.Brand power – Easy recall

36
Bajaj/herohonda/Yamaha/Honda/tvs
1 LOWEST 0%
-

2 0%

3 10%

4 25%

5 HIGHEST 65%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 0%

3 0%

4 60%

5 HIGHEST 40%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 35%

3 30%

4 35%

5 HIGHEST 0%
-

37
 LOWEST HIGHEST

1 LOWEST 5%
-

2 5%

3 45%

4 35%

5 HIGHEST 10%
-

LOWEST HIGHEST

TVS

1 LOWEST 15%
-

2 50%

3 25%

4 10%

5 HIGHEST 0%
-

38
 LOWEST HIGHEST

8.Bike on preference

Pulsar/apache/f-z 150/hunk/other
1 LOWEST 0%
-

2 0%

3 10%

4 45%

39
LOWEST HIGHEST 5 HIGHEST 45%
-

1 LOWEST 0%
-

2 5%

3 30%

4 65%

5 HIGHEST 0%
-

LOWEST HIGHEST

1 LOWEST 5%
-

2 0%

3 5%

4 30%

5 HIGHEST 60%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 10%

3 40%

4 50%

40
 LOWEST HIGHEST 5 HIGHEST 0%
-

ANY OTHER

1 LOWEST 0%
-

2 0%

3 0%

4 50%

5 HIGHEST 50%
-

LOWEST HIGHEST

IF OTHER,PLEASE SPECIFY

Splendor,karizma

41
9.Perception parameters about pulsar

Style/power/performance/value/brand
1 LOWEST 0%
-

2 0%

3 25%

4 20%

5 HIGHEST 55%
-

LOWEST HIGHEST

42
 1 LOWEST 0%
-

2 5%

3 20%

4 45%

5 HIGHEST 30%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 0%

3 45%

4 35%

5 HIGHEST 20%
-

LOWEST HIGHEST

1 LOWEST 0%
-

2 5%

3 35%

4 55%

5 HIGHEST 5%

43
 -

LOWEST HIGHEST

1 LOWEST 0%
-

2 0%

3 10%

4 80%

5 HIGHEST 10%
-

LOWEST HIGHEST

Some direct inferences

.Factors influencing the buying behavior

44
Brand recall

Sales Forecasting

45
1. Trend projection method:

This classical method of business forecasting is essentially concerned

with the study of movements of variables through time. It is used under
the assumption that the factors responsible for past trends in the variable
to be projected will continue to play their part in the future in the same
manner and to the same extent in magnitude and direction.
There are three techniques of trend projection:
 Graphical method
 Least square method
 Box-Jenkins method

Sales forecast of Pulsar for the year 2008 using Least Square
method (which is same as simple linear regression method):

46
YEAR SALES(S)in T T2 ST
Crores
2000 865 1 1 865
2001 1011.55 2 4 2023.1
2002 1374.94 3 9 4124.82
2003 1512.43 4 16 6049.72
2004 1647.86 5 25 8239.3
2005 1799.6 6 36 10797.6
TOTAL 8211.38 21 91 32099.54

47
1.Trend Projection Method:

The straight line trend equation used for projecting future sales is:
S = a + bT
Where, S = annual sales
T = time in years
a, b are constants

The constants a and b are estimated by solving the following two

equations:
48
 ∑S = na + b∑T
∑ST = a∑T + b∑T2

Here, n = 6
∑S = 8211.38 crores
∑ST = 32099.54 crores
∑T = 21
∑T2
= 91

On solving the above two equations we get,

a = 696.63 and b = 191.98

49
RMSE Calculation:
On the basis of the calculated values of a and b, the predicted sales value
for the years 2006,
2007 and 2008 will be:
Sp2006 = 696.63 + (191.98*7) = 2040.49 crore
Sp2007 = 696.63 + (191.98*8) = 2232.47 crore
Sp2008 = 696.63 + (191.98*9) = 2424.45 crore

And, the actual sales values for the above three years are:
Sa2006 = 2072.00 crore
Sa2007 = 2487.00 crore
Sa2008 = 3497.00 crore
RMSE = {(3497.00 − 2424.45)2 + (2487.00 − 2232.47) 2+ (2072.00 −
2040.49)2}1/2
(3) 1/2
= 636.69

Sales for 2009 and 2010 can also be forecasted:

S2009 = 696.63 + (191.98*10) = 2616.43 crore
S2010 = 696.63 + (191.98*11) = 2808.41 crore

50
3. Exponential smoothing:
It is a popular technique for short-run forecasting. It uses a weighted
average of past data as the basis for a forecast. It gives higher weight to
most recent data and least weight to observations of distant past. The
weights for past data are chosen in accordance with their degree of
influence on the future. The formula for exponential smoothing is-
ST+1 = AyT + (1-a) St
Where, St+1 = exponentially smoothed forecast
Yt = actual sales of previous year
St = forecasted sales of last year

Now, we apply this method on the available sales data of AWL

considering a six period average as the initial forecast for the year 2006:

51
S2006 = (865.00+1011.55+1374.94+1512.43+1647.86+1799.60)/6
= 1368.56
We take the smoothing constant, a = 0.4
Therefore, S2007 = (0.4*2072) + (0.6*1368.56)
= 1649.93
S2008 = (0.4*2487) + (0.6*1509.25)
= 1984.75
RMSE Calculation:
RMSE = {(2072.00 − 1368.56)2+ (2487.00 − 1649.93)2 + (3497−
1984.75)2 }1/2
(3 )1/2
= 1077.406

Sales for the year 2009 can also be predicted as:

S2009 = (0.4*3497.00) + (0.6*1984.75) = 2589.65 cr

52
 Calculation of Correlation:

Correlation Coefficient = 3359.71/(6-1)*(364.848*1.871)

=0.984

This shows that there is a high degree of correlation between the time
period and sales i.e more the time period, more are the sales. This means
that sales are highly dependent on the time period positively.

Calculation of Herfindahl Index

53
Market shares of various brands in premium segment i.e. 150-220 c.c.
Pulsar : 41%
Hero Honda: 27%
TVS: 25%
Royal Enfield: 5%
Yamaha: 2%
Herfindahl Index: (41^2)+(27^2)+(25^2)+(5^2)+(2^2)
=3064
Since the value of H (Herfindahl index) is high, we can say that the
concentration ratio is also high in the segment of premium bikes.

PRICE REGRESSION PRICE ANALYSIS

54
 bike vs price in india

100
90
80
70
bike price

60
50 Series1
40
30
20
10
0

M llet
F r r gy

Li x
Pu r

En e
G m
k

0
Pa isco r

Am us

ZX tiva

er

ro
n

Be m

o
0
t

xe

D lsa
ss ve
iri

ru
By

10
ls
tio

17

er
o

do

be
am
Pl
Sp

Bu
Pu

C
Bo

Zo

Fi
Ac
bi

F-

ax
ee
n
io

bike type

bike price distribution in india

100
90
80
70
Types of bikes

60
50 Series1
40
30
20
10
0
0 20 40 60 80 100
price range

The maximum number of bikes lie in the range between 40-50 thousands which is also a
usp of pulsar as it is almost near to the given range and provides a better value for money.

55
 Spirit
veiw of bikes in india w ith price M 80
90
Saffir
80 Cheta
Cheta
70
Byk
60 Byk
Calibe
50
Price Calibe
40 Boxer
Boxer
30
Boxer
20 Pulsa
Pulsa
10
Pulsa
0 Pulsa
1 Elimin
Bikes W ind
W ind
Disco
Disco
Splen

CONCLUSION
56
The bike was launched in the year 2000, and for it to capture the largest
share of market and beat existing and flourishing brands like Hero
Honda is a great achievement.
Also the root mean square error value in the least square method
is less than that in the exponential forecasting method. Thus, the sales
predicted by least square method will be a better estimate of the future
sales than that predicted by exponential forecasting method.
The maximum buyers are of the age group 24-30 , hence it can be
interpreted as being popular in college going youth .A majority group
belonging to the pulsar kind of bikes is more from the income group
category 3-5 & 5-10 lakh group The maximum number of bikes lie in
the range between 40-50 thousands which is also a usp of pulsar as it is
almost near to the given range and provides a better value for money.
The youth were more inclined towards the adventure part of bikes
,looks, consult friends, use television and internet and prefer style and
value the most whereas for the elders go for household and office,
mileage, family, print, value and brand before making a bike purchase.
Annual incomes have a direct correlation with increasing demands of
consumer also. Pulsar overall enjoys a favorable demand among all the
categories and consist of maximum alluring qualities amongst the tested
ones.

APPENDIX

57
Questionnaire for Bike Customers
(The findings of this survey will be used only for academic purposes by the
students of Lal Bahadur Shastri Institute of Management,New delhi)

Q1.Name of the customer

Q2.Age :

• 18-24
• 24-30
• 30-36
• ABOVE 36

Q3.WHICH BIKE DO YOU OWN PRESENTLY ?

Q4.ANUAL HOUSEHOLD INCOME

• <I LAKH
• 1-3 LAKH
• 3-5 LAKH
• 5-10 LAKH
• >10 LAKH

Q5.WHAT IS THE PURPOSE OF YOUR BIKE?

(RATE ON 5 POINT SCALE-5 BEING THE HIGHEST AND 1 BEING THE

LOWEST )
58
a)OFFICE

1 2 3 4 5

LOWEST HIGHEST

b)TRAVELLING

1 2 3 4 5

LOWEST HIGHEST

c)HOUSEHOLD

1 2 3 4 5

LOWEST HIGHEST

d)ADVENTURE

1 2 3 4 5

LOWEST HIGHEST

59
e)OTHER

1 2 3 4 5

LOWEST HIGHEST

PLEASE SPECIFY THE OTHER FACTOR

Q6.RATE THE KEY FACTORS WHICH AFFECTED YOUR BUYING DECISION?

(5 BEING THE HIGHEST AND 1 BEING THE LOWEST )

a)MILEAGE

1 2 3 4 5

LOWEST HIGHEST

b)LOOKS

1 2 3 4 5

LOWEST HIGHEST

60
c)BRAND

1 2 3 4 5

LOWEST HIGHEST

d)SERVICE

1 2 3 4 5

LOWEST HIGHEST

e)PRICE

1 2 3 4 5

LOWEST HIGHEST

Q7.WHICH OF THE FOLLOWING INFLUENCES YOUR PURCHASE DECISION?

(RATE ON 5 POINT SCALE-5 BEING THE HIGHEST AND 1 BEING THE

LOWEST )

61
a)FRIENDS

1 2 3 4 5

LOWEST HIGHEST

b)FAMILY

1 2 3 4 5

LOWEST HIGHEST

c)DEALER

1 2 3 4 5

LOWEST HIGHEST

d)ADVERTISEMENT

1 2 3 4 5

LOWEST HIGHEST

62
e)OTHER FACTORS

1 2 3 4 5

LOWEST HIGHEST

PLEASE SPECIFY THE OTHER FACTOR

Q8.WHICH OF THE FOLLOWING MEDIA ARE YOU MOST LIKELY TO NOTICE AN

ADVERTISEMENT ?

(RATE ON 5 POINT SCALE-5 BEING THE HIGHEST AND 1 BEING THE

LOWEST )

a)TELEVISION

1 2 3 4 5

LOWEST HIGHEST

b)HOARDINGS

1 2 3 4 5

LOWEST HIGHEST

63
c)PRINT MEDIA

1 2 3 4 5

LOWEST HIGHEST

d)INTERNET

1 2 3 4 5

LOWEST HIGHEST

e)OTHERS

1 2 3 4 5

LOWEST HIGHEST

IF OTHERS PLEASE SPECIFY

64
Q9.WHICH BRAND NAME DO YOU FIND EASY TO RECALL?

(RATE ON 5 POINT SCALE-5 BEING THE HIGHEST AND 1 BEING THE

LOWEST )

a)BAJAJ

1 2 3 4 5

LOWEST HIGHEST

b)HERO HONDA

1 2 3 4 5

LOWEST HIGHEST

c)YAMAHA

1 2 3 4 5

LOWEST HIGHEST

d)HONDA

65
 1 2 3 4 5

LOWEST HIGHEST

e)TVS

1 2 3 4 5

LOWEST HIGHEST

Q10.RATE THE BIKES ON THE BASIS OF YOUR PREFERENCE?

(RATE ON 5 POINT SCALE-5 BEING THE HIGHEST AND 1 BEING THE

LOWEST )

a)PULSAR

1 2 3 4 5

LOWEST HIGHEST

b)APACHE

66
 1 2 3 4 5

LOWEST HIGHEST

c)F-Z 150

1 2 3 4 5

LOWEST HIGHEST

d)HUNK

1 2 3 4 5

LOWEST HIGHEST

e)ANY OTHER

1 2 3 4 5

LOWEST HIGHEST

IF OTHER,PLEASE SPECIFY

67
Q11.RATE YOUR PERCEPTION ABOUT PULSAR ON THE FOLLOWING FACTORS-

(RATE ON 5 POINT SCALE-5 BEING THE HIGHEST AND 1 BEING THE

LOWEST )

a)STYLE

1 2 3 4 5

LOWEST HIGHEST

b)POWER

1 2 3 4 5

LOWEST HIGHEST

c)PERFORMANCE

1 2 3 4 5

68
LOWEST HIGHEST

d)VALUE

1 2 3 4 5

LOWEST HIGHEST

e)BRAND

1 2 3 4 5

LOWEST HIGHEST

69
70
 REFERENCES
1. EBSCO HOST(database)
2. PROWESS(database)
3. INDIA STATS(database)
4. Peterson, Lewis and Jain: Managerial Economics
5. www.bajajauto.com

6. http://auto.indiamart.com/motorcycles/bajaj-pulsar

7. http://www.fadaweb.com/two_wheeler_industry.htm

8. auto.indiamart.com/motorcycles
71
9. www.iloveindia.com/bikes/index.html

10.www.infibeam.com/bikes/make/herohonda.html

11.bikes.whereincity.com

12.www.bikesalesindia.com

13.www.infibeam.com/bikes/make/bajaj.html

14.www.autoblogs.in/.../bajaj-pulsar-300-cc-india-bajaj-bikes.html

15.www.autoindiaforum.com/bajaj-to-launch-6-new-bikes-in-2009.html

16.FOR VEIWING THE COLLECTEDPRIMARY DATA VISIT –

http://spreadsheets.google.com/ccc?
key=0Au4_eI1zvZ0YdF8yT2VCRHFKWmJZQm4zQkdlQ0d3enc&h
l=en

72