Bajaj rides 100-cc to regain second spot in 2-wheeler mkt

Written by Yogima Seth | New Delhi | Updated: Nov 9 2009, 05:00am hrs
If early numbers are anything to go by, Bajaj Autos renewed focus on the entry-level 100-cc bike segment is beginning to pay off. The recently launched 100-cc Discover has not only helped it regain the second position in terms of domestic sales, it has also helped the Pune-based two-wheeler company widen the gap with closest rival TVS Motors and inch closer to Hero Honda Motors, the countrys largest two-wheeler maker with a strong foothold in the entry-level segment.

Bajaj lost its undisputed No. 2 position within the industry in the second half of 2008-09. This came soon after the company announced in 2007 that it would exit the 100-cc segment and increase its focus on bigger and sportier bikes.

According to the Society of Indian Automobile Manufacturers, the difference between the number of two-wheelers sold by Bajaj Auto and TVS Motors has gone up from a mere 5,000 units in April to over 1,20,000 units in October. At the same time, the volume difference between Hero Honda and Bajaj Auto has come down from nearly 2.5 lakh units in April to 1 lakh units at present. This is a real comeback, considering that the company was trailing the Chennai-based TVS Motors in January and March and Honda Motorcycle and Scooter India in January and February.

However, the company is still far from regaining the coveted No. 1 position it had lost to Hero Honda way back in 2000-01. The closest it came to Hero Honda was in September 2006 with a difference of over 37,000 units.

As part of the companys strategy to help customers upgrade to bigger bikes, we had introduced Pulsar 180-cc in May and the 100-cc Discover in July this year. The tremendous response we received from rural India for Discover and from urban buyers for Pulsar has helped us increase our market share from 17% in the second half of 2008-09 to 28% currently, said S Sridhar, vice-president (sales and marketing), Bajaj Auto.

The companys performance comes on the back of over 290% increase in sales of 100-cc bikes in the last two months with an average monthly sales of 90,000 units as against 23,000 units in the second half of 2008-09.

In fact, it sold nearly 2 lakh bikes within 100 days of launching Discover, resulting in an overall increase in market share.

Its a different strategy this time. Our strategy is led by the creation of a category of a long distance bike. I would still insist our strategy remains the same. We are launching a bike which is not seen as a 100-cc and we wish to offer it to people who typically buy 100-cc motorcycles but would like to upgrade, Rajiv Bajaj, managing director, Bajaj Auto, had said at the time of launching Discover.

However, a nalysts and industry experts see this as a clear shift in strategy and an attempt to regain ground it ceded to competition. Bajaj made a big mistake thinking it can retain its strong foothold in the Indian two-wheeler industry without being present in the entry-level segment, which still accounts for more than 70% of total two-wheeler sales, said a Mumbai-based analyst. To give credit, it has changed tack and is focussing once again on the commuter segment. He added this shift should also be seen in the light of Rajiv Bajajs vision of making 2009-10 the best year in the companys history.