Bajaj Auto has taken the lead by coming out with a 5-5-5 scheme under which customers will receive 5 years of free own-damage insurance, extra free services and 5 years of free warranty on select motorcycles.
With retail demand for two-wheelers being weak for the past two months and the cost of ownership going up due to one-time payment of insurance for a five-year period, manufacturers have started coming out with schemes to push sales during the festival season. Bajaj Auto has taken the lead by coming out with a 5-5-5 scheme under which customers will receive 5 years of free own-damage insurance, extra free services and 5 years of free warranty on select motorcycles.
Customers buying Platina, Discover, Pulsar or V range of motorcycles under this scheme will get five years of free own-damage insurance.
A comprehensive insurance which customers get done for vehicles comprises own damage and third party in the ratio of 50:50. While the own damage part has to be paid yearly, the third party charges have to be paid for a period of five years. Under Bajaj ‘s scheme, customers will not have to pay any charge for five years after the initial payment as the own damage part will be taken care by the company.
Bajaj said as a result of this scheme, customers will save up to Rs 9,800 on Pulsar bikes, Rs 5,200 on Bajaj V range, Rs 4,800 on Discover and Rs 4,100 on Platina.
Overall two-wheeler volumes for OEMs grew 12% Y-o-Y in September, partly led by a strong growth in exports and push of inventory to dealers. Retail demand was, however, quite weak. Hero MotoCorp reported a 7% Y-o-Y volume growth in September. Bajaj Auto’s overall volumes increased by 17% Y-o-Y, led by 10% growth in domestic motorcycle volumes, 12% growth in domestic three-wheeler volumes and 30% growth in exports. TVS reported an 18% Y-o-Y volume growth led by a 20% growth in exports, while domestic two-wheeler volumes were up by 18%. Eicher reported only 2% Y-o-Y volume growth due to Kerala floods (accounts for 11% of the company’s volumes), a strike at one of its plants and weak retail demand.
Eric Vas, president of the motorcycle business at Bajaj Auto, said: “Motorcycle on-road prices have gone up by at least Rs 6,000 due to the increase in insurance cost. We wanted to cushion this cost for customers by absorbing cost of own-damage insurance for the first year and extending this benefit by covering him for the next four years.”