The Hindu Business Line : Bajaj mounts new Discover for growth ride

Mumbai, July 9 Bajaj Auto is betting big on its new 100cc Discover that will roll out of its Chakan plant near Pune on July 17. It will subsequently move to the Pantnagar facility which will help service markets in the North.

“The new Discover is extremely fuel-efficient and its mileage in actual road riding conditions is 80 km per litre compared to 65 kmpl in most other 100cc bikes,” Mr Rajiv Bajaj, Managing Director, told Business Line.

From the company’s point of view, the core of this initiative is to create a long distance bike. “According to me, issues of engine capacity and price are too simplistic,” he added.

There are no indications yet how much the 100cc Discover will cost though it would be closer to the Rs 42,000 (ex-showroom) mark keeping in line with other models in this segment. Bajaj Auto is also not making public the targeted volumes though it could even do upwards of 40,000 units each month if things go according to plan.

What is clear, though, is that the new offering will be a critical growth driver in the company’s quest to reach monthly sales of 2,00,000 bikes in the domestic market during 2009-10.

“It is my estimate that, in terms of sales and profits, this fiscal will be the best ever for Bajaj Auto,” Mr Bajaj said.

Taking on the competition

The new Discover is intended to take on Hero Honda’s Splendor and Passion models, the clear market leaders in the mid-size segment which accounts for sales of nearly 3,00,000 bikes each month.

The entry-level 100cc category with models in the price range of Rs 35,000 does sales of 1,00,000 units a month.

The 100cc Discover will target customers from both categories to be able to build volumes.

“We do not want this to be a ‘Me Too’ product. Bajaj builds brands by creating categories. What is important is that those people who want short distance bikes can also opt for it,” he said.

As a brand, the Discover has been around in the market for over five years now since it was first launched with a 125cc engine. The present 135cc version does sales of 30,000 units a month, both here and in the export markets.

Investing in brands

Mr Bajaj reiterated that the new Discover was “just not another 100cc bike” because some of its new technological features could have been put on the Platina instead.

“The Platina is seen as a 100cc bike and will never get pride of place in the executive segment. We are definitely not trying to promote it either. If the Discover does well, it will not be perceived as a 100cc bike by customers. Our strategy is to invest in brands. A brand, by the end of the day, is a product with pricing power in the market,” he said.

Bajaj Auto has constantly maintained that it would like to focus on top-end bikes, which offer the best in technology and also make money in the process. “We have done the right thing by being a premium player. The Pulsar is already a strong brand and we will move down on the Discover and XCD,” Mr Bajaj said.

The 100cc Discover endeavours to meet the needs of the average commuter who does 50 km daily, through a host of features such as DTS-Si technology, pent-roof combustion chamber, a five-speed gearbox, long wheel base and better suspension. Nearly 18 months of work went into readying the bike.

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