Jittery Bajaj Auto bounce back after losing the second position, all set to launch a new bike

Wednesday 25 July 2012, 10:27 AM by

Recently, one of the India’s leading two-wheeler manufacturers, Bajaj Auto Limited came in limelight when it lost the next-to-top position to Honda Motorcycle and Scooter India Private Limited (HMSI). Since 2001, the latter beat the former on the grounds of quarterly sales for the first time in the history. This was bound to rattle the nerves of the company and required an immediate action. Kudos to the Bajaj Auto as it has already bounced back and is gearing up to launch a follow-up model to its Discover and Platina in 100 cc segment.

The company is planning to pitch the new model against the likes of iconic Splendor and Passion from the arsenal of Hero MotoCorp and the recently launched Dream Yuga from HMSI. Bajaj Auto has adopted an aggressive strategy for its new bike, which is codenamed D-104. The auto maker has planned to offer it with a price tag of around Rs. 40,000, which is a bit on lower side than its competitors.

According to the sources close to the development, owing to its unique proposition of advanced features in low price, the motorcycle is expected to snatch the market share from right under the nose of its rivals. It is expected that the new bike will feature electric ignition, disc-brake on both wheels, digital console and the LED lights. It also anticipated that the company will use fibre body instead of the steel to reduce the overall weight of the motorcycle, helping the company to improve its mileage.

The commuter segment of motorcycles, which comprises models of 110 cc or less, has always been the weakest link for Bajaj Auto. However, Hero MotoCorp has been dominating the same with three outs of every four unit sold by it. The Pune based manufacturer did make a feeble attempt to gain market share with the launch of its Wind and the Caliber, but that was not enough and as a result the models were shelved. Bajaj sold 3,10,723 units of its Boxer, CT, Platina and Discover during the first quarter of 2012 and at the same time, Hero MotoCorp reported sales of more than four times than that of Bajaj.

Bajaj's failure to crack the entry-level segment is the reason behind its slip to the third position. According to the Senior Vice-President, Fortune Financial Services, Mahantesh Sabarad, “Currently the ratio of sales in the mass market is 5:1 in favour of the market leader. Launching a mass market product is a good move to get more volumes, although it does not add incrementally to margins.”

Odds may have been against the company in the past, however, the future looks brighter as the new D-104, which is slated to be launched somewhere in October-November 2012 does sound like an exciting proposition. And if Bajaj delivers the bike with speculated advanced feature package along with a fibre body to enhance mileage, it will sell like hot-cakes to grab the market share for the company.