Bajaj fails to move up 2-wheeler hierarchy

Bajaj Auto has remained stagnant at the number four position among India’s two-wheeler companies for the fourth consecutive month, behind Hero Honda Motor India, Honda Motorcycle and Scooter India (HMSI) and TVS Motors. Last November, HMSI had pipped Bajaj Auto from the number two position. In December, sales of Bajaj Auto fell further and it was pushed to the number four slot by Chennai-based TVS Motors.

“Dealer stock normalisation, which had happened in November and December, continued into January as well. Due to this, the company registered low sales last month,” said Rajiv Bajaj, managing director, Bajaj Auto.

This dismal performance of the two-wheeler company comes despite the January launch of the new XCD 135cc. The company, however, feels that since the vehicle was launched in the second half of last month, it is too early to feel its impact.

“The XCD 135 was launched on January 21 and February would be the first month of sales for the bike,” said Bajaj. He noted that the company has a target to sell 20,000 units of the bike.

“Once the dealer stock gets back to normal and sales of XCD picks up this month, we expect Bajaj Auto to regain its number two position in the domestic two-wheeler industry in February,” he said.

Whereas sales of almost all players went up in January vis-?-vis November, Bajaj Auto registered a 19.6% decline in January. It sold 66,696 units during the month as compared to 82,919 units in November 2008. Consequently, the gap between Hero Honda and Bajaj Auto increased by almost 23% to 2,44,334 units in January vis-?-vis 1,98,740 units in November last year.

According to the Society of Indian Automobile Manufacturers’, Hero Honda, the leading two wheeler manufacturer in the country with a market share of around 56%, sold 3,11,030 units in January this year followed by 90,796 units of HMSI and 79,729 units of TVS Motors.

The poor performance of Bajaj in the domestic arena could be owed to a mix of factors like inappropriate product portfolio, near absence from the scooter segment and the company’s increased focus on niche products, feels a Mumbai-based analyst.

“The kind of products that Bajaj has in the market is not comparable to its competitors. Moreover, the company has completely moved from the entry-level 100cc segment. Consequently, players like Hero Honda and TVS are increasing their market share in that category,” he said. Though scooters constitute a small part of total two-wheeler industry, Bajaj’s absence from the segment has further dampened the company’s position in India, he opined.