Tough times ahead, those who come up with better bikes will do well, says Bajaj

Written by Geeta Nair | pune | Updated: Jan 8 2013, 06:54am hrs
Rajiv Bajaj, managing director, Bajaj Auto, has cautioned that the months ahead could be tough for bike makers though he expects the firm to report a good set of numbers for the December quarter, helped by the festival season.

Nothing has changed, sales are difficult to come by, Bajaj said at the companys corporate office in Pune on Monday, at the launch of the Discover 100 Tourer, the new 100 cc motorbike from the Bajaj stable.

Consumer sentiment is weak but it is still a market that sells 8 lakh motorcycles a month and there is more than enough for everybody, the Bajaj chief said, adding that the December numbers may have raised false hopes since the road ahead looked difficult.

Bajaj Auto is set to report its third quarter numbers on January 16 and is riding high on some good numbers it achieved in December. Bajaj reported a 13% y-o-y growth in sales in December, its best ever sales for the month.

We have done well in quarter one and two, we launched the Discover SS, Pulsar 200 NS and the Discover 125 ST to keep up the momentum, Bajaj said pointing out that while the April to September period had been difficult, the festival season from October till mid December had been better but was over.

Companies that are able to come up with better products will be able to do well, he said, observing that apart from the Discover 100T, more launches were on the anvil in this segment. Hero has been dominating this segment with its Splendor bikes and Bajaj has been using the Discover platform to combat the stranglehold of Splendor. In September, Discover had overtaken Splendor to become the largest selling bike in the world, but later the Splendor fought back and retained the spot.

The new Discover 100T motorcycle is being launched as the most expensive 100 cc bike. Every bike has to contribute 20% Ebitda and it makes no sense to introduce products that drag down performance of the company, which is why we have priced the new bike at R50,500, Bajaj said. The bike has been priced at a five per cent premium compared to the offering from Hero Motors (Passion Pro) and Honda (Dream Yuga).

There is cost of technology and the bike is leagues ahead and it had to reflect in the price, he added.