Firing on all cylinders, Bajaj upbeat about growth

Rajiv Bajaj is confident that his company will have a good run through 2018-19 both here and in overseas markets.

“Exports have now fallen into place and three-wheelers are rocking,” says the Managing Director of Bajaj Auto. “Our motorcycles are also doing well.” These include the new Pulsar NS, Avenger, Dominar 400 and Discover. On the anvil is a new ‘V’, which was first launched two years ago as a 150cc commuter bike and followed, in more recent times, by its 125cc sibling.

Rise in numbers

The company’s bike numbers have been rising in recent times thanks to the relaunch of the Discover in January. Data for February shows that bike sales in the domestic market have jumped 23 per cent to 1.76 lakh units with exports up 19 per cent at 1.22 lakh units.

Three-wheelers have shown a much higher increase at over 38,500 units sold in India last month, which is more than double of what was reported in the same period last year. This is also same for exports that recorded nearly 22,000 units compared to over 11,700 three-wheelers in February 2017 when key markets such as Africa virtually imploded.

Additionally, it is only a matter of time before the Qute debuts in the Indian market a good six years after it was first displayed at the 2012 Delhi Auto Expo. If everything goes according to plan, this 216cc quadricycle will be offered as an upgrade to the autorickshaw in the public transport category.

From Bajaj Auto’s point of view, while there is some cause for cheer, these are still early days yet to celebrate, especially in the executive commuter motorcycle space. The recently launched Discover duo (110cc and 125cc) is averaging over 30,000 units each month. But still has a long way to go in a product segment where Hero and Honda are miles ahead.

With scooters also eating into the commuter pie, the Discover will have its work cut out though the initial market response has been quite encouraging. The key is to sustain this momentum and ideally grow monthly numbers to over 50,000 units. The company has been unable to make much headway in the executive commuter space despite the fact that it has pulled out all the stops over the years with brands such as the Discover and the more contemporary ‘V’ in recent times.

“We will continue to focus on our strategy of differentiation and steer clear of me-too products,” reiterates Bajaj. For instance, the objective of ‘V’ was to create the ultimate commuter bike even though its numbers have been modest at 10,000 units each month. It will be interesting to see how the new ‘V’ is positioned and whether it can strike the right chord with its targeted customer.

Three parameters

As Bajaj puts it, a product is defined by three parameters: styling and design; performance and function; and finally cost/price. When it comes to the brand, the first part is to be able to tell a story where, while taking the executive commuter segment as a case in point, the Discover and ‘V’ have something to say. In the case of the former, it was the first 125cc commuter launched 14 years ago while the ‘V’ has the association with INS Vikrant, the country’s firstaircraft carrier whose metal was recycled for the bike.

The next aspect of the brand is the experience and, finally, the product itself. When it comes to the Discover, even though it was in cold storage for a while, the brand had not been forgotten that explains its positive market reception. Of course, its manufacturer had also done careful market research to ensure the right mix of ingredients for the new Discover, which will also extend to the rejuvenated ‘V’.

Bajaj Auto is also confident about the Dominar 400, which was positioned as the alternative to Royal Enfield’s vice-like grip in mid-size motorcycles. While its numbers are still hovering around 4,500 units each month (including exports), the company believes that its potential is a lot more. Even here, differentiation was the guiding principle while offering a bike that was muscular and contemporary.

“Of course, we would like to see 10,000 units every month for the Dominar 400,” responds its MD. For now, the twin brand strategy across its motorcycle portfolio is working well, especially at the entry-level with the CT 100 and Pulsar and sports with the Pulsar and Avenger.

The challenge is to replicate this with the Discover and ‘V’ in the executive commuter space and this is especially critical since this product category accounts for a lion’s share of bikes sold in India.

It is also here that scooters, led by Honda Activa, have made a huge impact and successfully taken on established motorcycle brands like the Hero Splendor.

Making an impact

Bajaj Auto had realised years ago that the only way to make an impact here was to be different and this puts in context why it launched the Discover 125 way back in 2004 at a time when this arena was all about 100cc bikes. The brand had everything going in its favour except that, in hindsight, a needless detour could have been avoided in launching the XCD 125.

In all fairness, the company quickly set right its business plan and decided to focus on the Discover all over again along with the well established Pulsar. Here again, things started off on the right note but as a host of versions followed, the script went off track. With renewed market research/inputs, the new Discover is intended to set things right even while it has a long haul ahead with rivals such as Hero and Honda equally determined to grow their presence in this segment.

Beyond its own brands, Bajaj Auto also has the KTM range firing on all cylinders both in India and overseas markets.

The Austrian bike maker, in which Bajaj has a 48 per cent stake, has successfully leveraged its ally’s manufacturing skills for over a decade now to make 125-400cc bikes at Chakan near Pune, which are exported to a host of countries.

This plant will soon have a new resident in the form of Husqvarna, the Swedish brand that KTM acquired in 2013 and is now keen on seeing it go global too.

This is where the cost-competencies at Chakan will play a big role in catapulting the Husqvarna range to markets in the Asia-Pacific region.

The next big thing is the alliance with Triumph of the UK where the partners are “in the thick of product development”. If things go according to plan, the first range of mid-size motorcycles will be ready to roll out of the Chakan plant in 2020.

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