Bajaj claims exports facing pricing heat from Hero, TVS more than Chinese players

Bajaj Auto, the country’s third largest two-wheelers maker, said it is facing pricing pressure in markets outside India, not from Chinese companies but from domestic counterparts.

The Pune-based manufacturer of Pulsar and Avenger range of motorcycles said Hero Motocorp and TVS Motor Company have increased the competitive intensity for getting a stronger foothold in those markets.

The three companies that together control more than 65 percent of the Indian two-wheeler market, are present in almost the same export markets of Africa, Latin America and Asia. Two-wheeler companies from China and Japan also compete in those markets.

Speaking to analysts Rakesh Sharma, Chief Commercial Officer, Bajaj Auto said, “There is a little bit of a pricing pressure continuously from the Indian competitors. The Japanese and Chinese have not really changed their strategies too much. I know that Yamaha has sort of been very aggressive in 1 or 2 Latin American countries. But we don't see that much change. But, yes, we are finding consistently TVS and Hero underpricing compared to us in almost all the markets.”

Demand in developing markets is skewed towards high mileage small capacity bikes that are affordable. Indian two-wheeler players are aggressively expanding their global reach even with some dedicated models that are not sold in India.

One in every three two-wheelers sold by Bajaj Auto is sold outside India with Boxer and Pulsar among the top sellers. Hero sells the 100cc Dawn motorcycle in Africa also with a 125cc engine that is not available in India. The Delhi-based company has stepped on the gas in the past two years expanding its global reach also aided by a assembly plant in Bangladesh.

Chennai-based TVS Motor Company has the biggest range of export-only model range. Models such as HLX, Neo and Rockz are sold Indonesia, Columbia and African markets.

Bajaj, who is the largest exporter of two-wheelers from India, is the market leader in many of the African two-wheeler markets despite the price premium it charges over the competition.

When contacted a Hero Motocorp spokesperson said, “We do not wish to comment on what an industry peer has said. In several markets, our motorcycles and scooters enjoy a price premium due to the strong equity that the brand Hero enjoys among customers. Our products are priced in line with our profitable growth strategy and as per the segments and global geography they operate in. Product pricing is also largely determined by market dynamics and never against any particular single manufacturer."

TVS Motor Company declined to comment when contacted.