Swaraj Baggonkar Moneycontrol News
Bajaj Auto, India’s fourth-biggest two-wheeler maker, is gearing up for a fresh round of battle in the domestic motorcycles segment. The company is focussing on the 125cc commuter segment that has emerged as one of the fastest growing segments.
The Pune-based company is working on a series of products for the commuter segment as well as for the Pulsar segment, which is gaining popularity for being an everyday commuter bike rather than a leisure/performance product.
“In the M2 and M3 or ‘commuter and commuter deluxe’ segment, which is the largest motorcycle segment in India, Bajaj Auto’s offerings in the commuter deluxe segment were the Discover 125 and the V. It is here that Bajaj Auto performed worse than expected, and did not meet the tough targets that it had set for itself," said the company in its annual report.
Bajaj is strong in the sports and super sports segment where it has the Pulsar, Avenger range and Dominar as well as bikes under the Austrian street bike specialist brand KTM. Last year, Bajaj regained strength in the entry segment too with its two models Platina and CT100.
But the company is weak in the commuter (125-150cc) segment where it has the Discover and V brands. Despite repeated efforts in the past several years to grow the Discover brand volumes have remained disappointing.
The segment is dominated by Honda Shine and Hero Splendor 125.
“In the middle lies a very large ‘commuter and commuter deluxe’ segment where Bajaj Auto has missed out. This has to change. Therefore, in the years to come, Bajaj Auto must compete far more vigorously in this middle segment. The company will do this with the introduction of more attractive models and sub-models to compete at the lower end of the price chain in the commuter segment," added the company.
Last financial year Bajaj reported a fall of 1.3 percent in domestic motorcycle volumes to 1.97 million units as compared to 2 million units clocked in 2016-17. This is even as industry motorcycle volumes grew by nearly 14 percent last year led by Hero Motocorp. As a result, Bajaj Auto’s domestic market share in motorcycles fell by 2.3 percentage points to 15.7 percent in FY18 from 18 percent in FY17.
“Bajaj Auto will leverage the popularity of the Pulsar brand to focus on the top end as well. Time will tell how much more Bajaj Auto has sold in this ‘commuter and commuter deluxe’ segment. But, as of now, it is clear that a ‘breakout’ moment has arrived for the company and it will compete as never before in this large segment. Bajaj Auto certainly has the financial power to do so and with the support of all our dealers across the land, BAL should increase domestic market share for motorcycles,” added the company.
Unlike its peers, Bajaj does not compete in the scooter segment which it gave up more than a decade ago. Currently, over one-third of the 20 million domestic two-wheeler market is made up of scooters led by Honda with a share of more than 50 percent.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
