Companies

Bajaj eyes top slot in 125cc space with new Discover

Murali Gopalan Mumbai | Updated on April 19, 2011

bajaj

Bajaj Auto’s recently launched Discover 125 is part of a carefully thought out strategy to ensure leadership stakes in the upper end of the commuter segment.

“The Hero Honda name is strong in the 100cc space but does not travel as well in 125cc bikes. It is here that Bajaj has an opportunity to strike it big with the Discover 125,” Mr Rajiv Bajaj, Managing Director, told Business Line.

The Discover 100 and 150 duo has been averaging 1.25 lakh units each month of which the former accounts for a lion’s share with 85,000 units. Thanks to this brand strategy, Bajaj Auto has finally hit paydirt in the commuter space where Hero Honda rules the roost with its Splendor and Passion models.

The intriguing part about the Discover saga was the decision to launch the 150cc after the 100cc version. “It was a deliberate ploy to create this huge contrast in the commuter segment and it has shown us that 40,000 customers each month have moved beyond mileage,” Mr Bajaj said.

For a segment that reports monthly numbers of around 500,000 units, this may seem a trifling share but not only was this achieved in less than a year but clearly showed that some buyers were willing to make the change. “Gradually, this trickle will become a flood in five years but we cannot wait that long. We were also aware that the Discover 150 represented an extreme jump in the commuter space and it was time for the ‘in-between’ option,” he said.

This is where the Discover 125 entered the picture and it could well emerge a key growth driver for Bajaj Auto if the script goes according to plan. The Shine from Honda Motorcycle & Scooter India is the lead player in the 125cc category with over 25,000 units a month. Hero Honda’s Glamour and Super Splendor are also part of this product segment.

“Personally, I would be very happy if the 85,000 monthly numbers of the Discover 100 completely shift to the 125cc version. And if another 10,000 customers hopefully come in from the Discover 150, we would have then secured our position in this category,” Mr Bajaj said.

The coming months will reveal if the strategy is working out on these projected lines. What is clear, though, is that Bajaj Auto is aware that Hero Honda’s hold in the 100cc commuter segment is not going to change in a hurry and that there is only so much that the Discover 100 can do.

The only other option, therefore, is to strive for the top slot in the 125cc space. “Over time, people will gravitate beyond 100cc and we must patiently wait for customers to come to us. If we step out, this is where the mistake will occur,” Mr Bajaj said.

Ironically, the XCD 125 was supposed to do exactly this when it was conceived nearly five years ago. “I did not know at that time the difference between a product and a brand. We did everything right on the XCD but the name,” he added.

Published on April 19, 2011

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