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Bajaj spruces up Discover to get back its mojo

Wednesday, 21 May 2014 - 7:40am IST | Place: Mumbai | Agency: DNA
Bike maker to focus on 2-3 models instead of 7-8 variants, sets December target to regain 24% market share

Bajaj Auto, the second-largest motorcycle manufacturer in the country, is chalking out a fresh strategy to boost sales of its Discover bikes, to regain its lost market share.

While overall motorcycle sales grew almost 4% in last fiscal, volumes of Bajaj Auto declined 15% in the last fiscal, bringing down the Pune-based company's market share to 20.03% from 24.4% in 2013, according to the data provided by Society of Indian Automobiles Manufacturers.

The company in an analyst concall on Tuesday said it is looking to restore its market share to 24% by October-December.

Bajaj Auto saw a significant drop in market share, from 22% to 13% in the Discover category (100cc-125cc), which is dominated by the market leader Hero MotoCorp. While it has a 24% share in Platina segment, Bajaj Auto is the leader in premium Pulsar category with a 44% market share.

With sales in the premium (Pulsar) segment slowing down, Bajaj Auto has been betting high on the entry-level motorcycles, which is represented by its Discover family of bikes.

Despite the new launches last year, the company was unable to grow its share within the category due to the existing dominance of Hero and the new launches by other competitors.

The company is now is re-looking at its strategy in order to boost Discover sales.

One of the key points highlighted by Kevin P D'sa, president-finance, Bajaj Auto, was that the company would henceforth focus only on 3-4 key variants, instead of 7-8 variants.

"Challenge currently is the Discover family. Regaining our lost market share will depend a lot on this category," D'sa told analysts.

"We will not do the mistake of launching multiple variants under one brand name. Instead, we will focus only on our important variants like the new Discover 125 and Discover 100 M alongwith the upcoming new launch in the family. The new product will be distinct," he said.

In order to push sales, Bajaj Auto is also increasing spends on marketing and advertising.

The company will also launch one new Pulsar by the end of this fiscal.

"We take our leadership in the Pulsar segment very seriously. We have number of products, which are ready for launch. We will launch the product by the end of this year, however, our initial focus for the next 6-7 months would be on Discover," said D'sa.

According to analysts, the upcoming new launches would help Bajaj Auto regain its lost market share.

"The company has realised that having 7-8 models under one brand will not help. The idea of focusing on 2-3 key models will help. However, Hero's Splendor still dominates the largest chunk of the market. The company will have to work towards building the brand stronger, which can give customers better resale value of Bajaj's products," said Ajay Sethiya, an analyst with Centrum Broking.




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