Bajaj to explore new frontiers with Dominar 400

What is known is that it is a 400cc motorcycle whose name was announced only last week. Yet, there is a lot more to the Dominar 400 which makes its debut on December 15 and is one of Bajaj Auto’s most significant launches in recent times.

The motorcycle is part of a new brand category that will take on Royal Enfield in a space where it lords over the rest. “We have had some very strong products and brands such as CT100, Platina, Pulsar, Avenger, V and KTM. This is the next big one from our stable,” says Rajiv Bajaj, Managing Director.

As he explains, 94 per cent of motorcycles sold in India are priced below ₹1 lakh. Of the balance, 6-5 per cent are in the ₹1-2 lakh segment. It is here that Royal Enfield has a market share of 80 per cent while KTM, Yamaha YZF-R15 and Honda CBR 150R take up the balance. The ₹2-lakh plus makes up the reminder one per cent superbike segment with brands such as Triumph and Ducati.

“This background is the starting point for our new strategy. As much as a man is known by the company he keeps, a company is known by the brand it keeps. It becomes an ambassador for R&D, technology and production capability,” says Bajaj. This capability extends to its dealers, suppliers and its own workforce.

As far as the machine is concerned, he continues, the money it makes is important. Here is where the Dominar 400 becomes important beyond its intended objective of participating in the five per cent space of ₹ 1-2 lakh where Royal Enfield is all-supreme. In terms of volumes, this is a segment that it doing over 60,000 units a month and growing at a healthy pace. Volumes in 2017-18 are estimated to be one million units annually. Assuming an average price of ₹1.3 lakh for each motorcycle sold, a million units will translate into ₹13,000 crore annually.

With its 80 per cent share, Royal Enfield will obviously gain the most, but even for the balance 20 per cent, this means a potential topline of ₹2,600 crore and comfortable profits of well over ₹500 crore. This is where the Dominar 400 will have a role to play. “As bikes become bigger, they turn more profitable,” says Bajaj.

While this sounds an ideal script, it is easier said than done. After all, Royal Enfield has been around for years and is truly considered a heritage brand. How can Bajaj Auto counter this? “We live in a world of opposites and every mature segment is essentially a two-horse race,” replies its MD. As he explains, the top two players take away 80 per cent of the market and 100 per cent of profits too. The other participants only end up discounting heavily in a bid to stay relevant.

“It is better to stay in a niche. When 50 per cent of people buy a Maruti and I want something different, this essentially means that different is the opposite,” says Bajaj. While the bad news is that Royal Enfield has 80 per cent of the market, he believes the good news is that there is no worthy 20 per cent alternative yet.

But how will the Dominar 400 score in this segment where Bajaj Auto’s other brand, KTM (with its 200 and 390 Duke), has hardly made any ripples? Within the Royal Enfield stable, says Bajaj, people are buying a 350cc bike, be it a Bullet or Classic, at a price range of ₹1.1-1.3 lakh. KTM begins at ₹1.5 lakh while the 390Duke is a little over ₹2 lakh which means there is already a problem in terms of affordability.

“Sure, performance is 400cc, but does such a high price justify getting away from Royal Enfield?” asks Bajaj. While KTM bikes are top class in design and styling, lean and ready to race, they are perhaps not the best bet to attract India’s bigger built riders who prefer Royal Enfield. In the case of Yamaha or Honda, it is his reasoning that nobody will move to 150cc from a 350cc, since there is no replacement for displacement by the end of the day.

The Dominar 400, therefore, had to follow a different path even while sticking to the core principle of being opposite from the market leader’s offerings. This is a bike where one can sit up and ride comfortably. It is not thin or awkward and intended to be at par with Royal Enfield in design with the same levels of comfort.

“We are making a modern machine, not a heritage brand. It is truly smart and handsome. Our bike is big, bulky and chiselled. It is all muscle and no fat which was our guiding line in design. If Royal Enfield is a Sumo wrestler, ours is a heavyweight boxer,” says Bajaj.

From his point of view, the Dominar 400 is big and comfortable like Royal Enfield, but still modern and handsome, which then becomes the direct opposite. The performance is 400cc too with more contemporary features for the contrarian effect.

The Dominar 400 is also expected to be priced at a reasonable premium over Royal Enfield which could put it in the ₹1.6 lakh range. “People who buy it will do so for pride of ownership and modernity,” says Bajaj. He is confident that the bike will get huge bookings which has given the company enough confidence to ask a “healthy” down payment from customers.

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