Bajaj CT100

• Launched in 2001
• Discontinued the production in 2006
• Relaunched it in 2015.
• Currently the most affordable motorcycle in the
History: domestic market

• Engine - 99.3 cc ~ 100cc

• Six variants ( B, B CBS, KS Alloy, KS Alloy CBS, ES Alloy,
ES Alloy CBS )
• Three colour options
• Price ( 32k – 42k) *ex-showroom
• Fuel capacity – 10L
Specifications: • Claimed mileage ~90kmpl
• Top Speed 90kmph
 Sales and Figures

Why this Product?

CT 100 is Bajaj's entry level product and is targeted towards the people whose income is not on
the higher side.
• This segment is highly price sensitive hence the demand is completely dependent on pricing
of the product
• As this is an entry level product the notion of being ‘cheap’ is associated with the product and
so based on the income change of the customer the demand highly varies.
• Also there is cut throat competition in this segment and hence the pricing of the competition
highly influence the demand
 Price Variation

Why Feb’18-Mar’18
• No government subsidies • No influence of monsoon
• Real reflection of price elasticity • Holiday season in agriculture
 Price – Demand Curve

Price Demand
Feb’18 ₹ 32,653 23457
March’18 ₹ 30,714 36601
 Price Elasticity of demand

% Change in Quantity demanded = 56.03 %

% Change in Price= 5.9 %
Price elasticity= 9.49
 Inference

• Price elasticity is high

• 5.9% decrease in price caused a 56.03% increase in quantity
demanded
• Price sensitivity the market is to the price of entry level automobile
• Increased the share of Bajaj Auto to 17%
• Bajaj continues to price it low, to carter to the needs of agricultural
markets
 Income Elasticity of demand

• Have positive income elasticity as rise in income results in quantity

Normal goods demanded.

• It has negative income elasticity as rise in income decreases the

Inferior goods quantity demande

• High income elasticity as consumers feel that they can do without

Luxury Goods these goods if their incomes are low.

• Have a small income elasticity because consumer buy these goods

Necessity goods irrespective of change in income
 Income elasticity for CT 100
Sr. No Particulars
2016-17 2017-18 2018-19

1. Sales of CT100 4,52,712 4,53,927 7,42,199

2. Gross National Disposable
1,55,65,424 1,73,15,933 1,92,37,943*
income*

Source for GNDI is national statistical office, Ministry of statistics, GoI

Source for sales data in autopanditz.com
* - Estimated GNDI for 2018-19
𝑖𝑛𝑐𝑜𝑚𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 𝑜𝑓 𝑑𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 2016 − 17 & 17 𝑖𝑛𝑐𝑜𝑚𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 𝑜𝑓 𝑑𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 2017 − 18 & 18
453927 − 452712 742199 − 453927
∗ 100 ∗ 100
452712 + 453927 742199 + 453927
2 2
− 18 = − 19 =
17315933 − 15565424 19237943 − 17315933
∗ 100 ∗ 100
15565424 + 17315933 19237943 + 17315933
2 2

= 0.025 = 10.51
 Income elasticity of demand Curve

25000000

20000000
742199, 19237943
453927, 17315933

15000000 452712, 15565424

INCOME

10000000

5000000

0
0 100000 200000 300000 400000 500000 600000 700000 800000
QUANTITY DEMANDED
 Income elasticity of demand Curve
INFERENCE
• For the year 16-17 and 17-18, highly inelastic demand (graph almost
straight)
• External factors – conversion to BS IV leading to increased cost
• For the year 17-18 and 18-19, highly elastic demand (Graph almost
horizontal)
• Considering second year, value positive so it is a normal good.
 Cross price elasticity of demand

• Has positive cross price elasticity as an increase in price of good 1

Substitute goods induces people to move towards the substitute.
• Eg – Hamburgers and hot-dog

• Has negative cross price elasticity as increase in price of one good results in
decrease in its demand and consequently decrease in demand of
Complementary goods complementary good.
• Example – Computer and software
 Cross-price elasticity of CT100
Sr. No Particular 2016-17 2017-18 2018-19
1 CT100 4,52,712 4,53,927 7,42,199
2 Starcity (Price)* 50,534 52,900 54,400

* - price taken of any new model launched that year

𝑐𝑟𝑜𝑠𝑠 𝑝𝑟𝑖𝑐𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 𝑜𝑓 𝑑𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 16 − 17 & 17 𝑖𝑛𝑐𝑜𝑚𝑒 𝑒𝑙𝑎𝑠𝑡𝑖𝑐𝑖𝑡𝑦 𝑜𝑓 𝑑𝑒𝑚𝑎𝑛𝑑 𝑓𝑜𝑟 2017 − 18 & 18
453927 − 452712 742199 − 453927
∗ 100 ∗ 100
452712 453927
− 18 = − 19 =
52,900 − 50,534 54,400 − 52,900
∗ 100 ∗ 100
50,534 52,900

= 0.06 = 22.39
 Cross-price elasticity of demand Curve
55000

54500
742199, 54400
54000

53500
PRICE OF OTHER GOODS

53000
453927, 52900
52500

52000

51500

51000

50500 452712, 50534

50000
0 100000 200000 300000 400000 500000 600000 700000 800000
QUANTITY DEMANDED
 Cross-price elasticity of demand Curve
INFERENCE
• For the year 16-17 and 17-18, close to perfectly inelastic (graph
almost straight)
• External factors – conversion to BS IV leading to increased cost
• For the year 17-18 and 18-19, relatively elastic demand
• Positive value shows that it is a substitute good
• There are other factors affecting elasticity
Thank You