1. In big surprise, Bajaj Auto sales soar in festive season

In big surprise, Bajaj Auto sales soar in festive season

After almost a year-long slump in volumes since demonetisation, Pune-based two-wheeler major Bajaj Auto had first seen a revival in its volumes in September, owing to the start of the festive season.

By: | Mumbai | Published: November 8, 2017 5:05 AM
This has helped the company maintain a strong 19% market share in the motorcycle segment in the two months of festivities. According to the company, this turnaround in wholesale dispatches will continue. (Reuters)

After almost a year-long slump in volumes since demonetisation, Pune-based two-wheeler major Bajaj Auto had first seen a revival in its volumes in September, owing to the start of the festive season. This has helped the company maintain a strong 19% market share in the motorcycle segment in the two months of festivities. According to the company, this turnaround in wholesale dispatches will continue. The company is going to remain on the growth path on the back of its entry segment motorcycles and the Pulsar series of models. Eric Vas, president (motorcycle business), Bajaj Auto, said, “We expect growth to come from the 100cc segment and the 150-220cc bikes owing to models like the Pulsar NS, the Pulsar 160cc, the new Platina and the electric start CT 100. We aim to exit this year with a market share of 23% in the motorcycle space.” Regulatory disruptions aside, analysts feel that Bajaj Auto’s sales have been bogged down by increasing competition in the motorcycle segment and the shifting preference of buyers to automatic scooters and the resurgence of niche motorcycle brand Royal Enfield, which has severely dented Bajaj Auto’s volumes. Bajaj Auto, which has been the leader in the premium segment ever since the launch of the Pulsar in 2001, has also been shedding market share to new entrants in the segment, like the TVS Apache and the Honda CB Unicorn. However, the company is confident that the launch of the new Pulsar NS will act as a fillip to its premium motorcycle volumes. For instance, while the company sells around 40,000 units monthly, with the launch of the new Pulsar NS, Pulsar sales grew to above 80,000 units in September. Also, the company is going to unveil a refreshed Avenger in the last quarter of this fiscal and has hinted at the launch of a mid-segment motorcycle (motorcycle with an engine capacity between 250-500cc) in collaboration with Triumph Motorcycle by 2020.

In the economy segment too, the firm hopes to maintain sales of over 1,20,000 units monthly, owing to the new Platina and the CT 100. Prior to August this year, the company was selling around 60,000 units per month. Vas admits that the bikes in the executive segment, or bikes between the price range of Rs 50,000-60,000, have not been growing in sales for the company. “We have not done as much for the executive segment as the other segments but we will tweak the V series of models in the coming days. In the 125cc segment, we are mostly focusing on the Discover.”

However, analysts say that while a positive trend started in September, the two-wheeler maker’s absence of scooters in its line-up and intense competition in the motorcycles space is going to continue to weigh on Bajaj Motors. Analysts at JP Morgan said, “Long cycle, we remained concerned about increased competitive intensity in the 150cc segment (and within that, 150-250cc segment) with a number of competitors (Yamaha, Honda, TVS and Hero) planning new launches here. Bajaj Auto needs a successful launch here, which till now has not come.”

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