Bajaj Auto bets on Discover to regain market share

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A new 125-cc version of Bajaj Discover is scheduled to be launched in March 2014. Reuters A new 125-cc version of Bajaj Discover is scheduled to be launched in March 2014. Reuters
SummaryBajaj Auto aims to regain ground in the domestic motorcycle segment through its Discover variants.

Bajaj Auto aims to regain ground in the domestic motorcycle segment through its Discover variants. The company also plans to spruce up presence in the entry-level and executive segments.

In October this year, Bajaj launched the Discover 100M, a toned-down version of the sportier 100T priced at Rs 47,700 (ex-showroom, Mumbai), which experts say is at a lower price point and in line with the Rs 42,000-48,000 price range seen in the segment.

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A new 125-cc version of Discover is scheduled to be launched in March 2014.

The company believes 100M, and the new 125 cc Discover,

along with the rest of the 100cc motorbikes, will together contribute almost 90-95% of the total Discover volumes.

“The Discover family can give us somewhere near 120,000-125,000 numbers per month, which should happen by about June. This will be the result of the Discover that we have already launched in October and the new Discover that is coming up in February, beginning of March. We are talking of a 50% growth from the current volumes of 80,000 Discovers,” Bajaj Auto president (finance) Kevin D’Sa said during an analyst call.

“Our channel checks indicate Bajaj Auto’s newly launched Discover variant met with encouraging response, and we expect its volumes to recover from Q4 of FY14. Bajaj’s motorcycle volumes have declined 14% year-to-date despite a modest 3.3% growth in industry, largely owing to the poor show by Discover (year-to-date dip of 23% year-on-year). Our worst case scenario analysis indicates mere 1% downside from current levels factoring in multi-year decline for Discover and flat exports,” said Aashiesh Agarwaal, head (research), Edelweiss Financial Services.

Bajaj Auto’s market share at the end of December 2013 was at a low of 20.5%, from a high of 32% at the end of FY07.

The company saw its sales fall 16% during the April-December 2013 period on a year-on-year basis. In the domestic market Hero is the dominant player with 52% market share while HMSI has about 15% market share.

While Bajaj Auto claims it is on track to regain market share on the back of new launches in the segment, it is also keeping a close eye on rival Honda Motorcycle & Scooters India, which has made rapid inroads in the domestic market off late.

“Bajaj Auto market share losses could be due to ‘Discover’ range losing

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