While the company does not see much scope in electric vehicles, it has already begun test marketing two-stroke, direct injection autorickshaws in Pune.
PANTNAGAR/UTTARANCHAL: Quietly, Bajaj Auto is developing alternate fuel options for its two and three-wheeler range.
While the company does not see much scope in electric vehicles, it has already begun test marketing two-stroke, direct injection autorickshaws in Pune.
These vehicles, although priced much higher than the existing two-stroke three-wheelers, are expected to provide 30% additional fuel economy — almost the same mileage as a three-wheeler that runs on CNG, said managing director Rajiv Bajaj.
He said research & development for this three-wheeler has been largely done in-house and the vehicles are expected to hit the roads soon.
On two-wheelers, he said a CNG two-wheeler is on way but does not divulge further.
He seems to hold a couple of other aces up his sleeve: An entirely new bike that’s aimed at luring buyers from Hero Honda’s stronghold, the 100 cc segment by pricing the vehicle in the same range.
Rajiv Bajaj said due to historical reasons, Hero Honda’s strength has been its ability to sell 100 cc bikes at Rs 40,000 levels. “Our aim is to win these customers by offering them an upgrade at almost the same price level.”
The company has also embarked on significant capital expenditure to meet future demand. It rolled out the Platina, its first 100 cc bike brand, from the spanking new Pantnagar plant on Monday and slashed the bike's price-tag by Rs 3,000 (to Rs 33,000) - may be perhaps building the bike is cheaper at Pantnagar.
That would not be good news for rivals Hero Honda and TVS as they will have to match the sticker shock, and if they do, the moot point is will margins crimp as a result?
Rajiv said this three-pronged strategy to unsettle the 100 cc market began as far back as April last year, when the company launched Platina. Within five months of its launch, the prices of PLatina were slashed, forcing Hero Honda to react similarly.
Hero Honda came up with CD Deluxe at Rs 35,000, which, Bajaj said, is a whittled down Splendour - and therefore a reaction to his slashing Platina prices. But will such a combination of pricing, capex and an ability to second guess competition ultimately bring desired gains for Bajaj Auto?
The company saw robust volume growth with bike sales surging 24 per cent to 23.76 lakh units last fiscal but its growth momentum appeared to slow down a bit towards the March last quarter, with bike sales down two per cent in February at 171,780 units (175,256 units) and 10% in March at 165,524 units (183,927 units). Rajiv said no one can predict how the market will move from here.
"What we can do is ensure we have the capacity to address almost any situation that develops. We are trying to do just that by investing in capex and developing better products". While he may be right, competition in the 100 cc segment does not appear to be dwindling just yet. Hero Honda remains the clear market leader, but another Honda group company HMSI has declared plans to enter the segment soon.
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