Bajaj Auto could be devising a multi-pronged strategy to generate growth in these troubled times.
Sub-125cc offering likely to be priced around Rs 30,000
NEW DELHI: Bajaj Auto could be devising a multi-pronged strategy to generate growth in these troubled times. The company, which has seen a significant slowdown in domestic bike offtake over the last several months, may have already developed a low-cost motorcycle even as it works on upgrading the XCD platform for launching a “sports” bike next month.
Though the company has been vehemently denying any such move, industry sources say Bajaj has just begun testing a low-cost product in export markets such as Nigeria. According to these sources, this is a “sub-125 cc” bike and a debate is currently on within the company on whether to price it around Rs 30,000 (lower than the cheapest bike available in the market today) or slightly higher. Sources indicated that the brand name for the new product could be “Steel”, but this could not be confirmed.
Bajaj may be able to price this bike lower than existing, entry level motorcycles by importing many components from low-cost sourcing bases such as China.
Bajaj Auto managing director Rajiv Bajaj did not respond to DNA queries on new products. Two-wheeler CEO S Sridhar, general manager (marketing) Amit Nandi and vice-president (business development) S Ravikumar also remained unavailable.
On the sports bike front, it seems the company has been working on project “L1” which is believed to be a 135cc sporty bike based on the XCD platform. It could be the first product Bajaj launches in collaboration with technology partner KTM.
Launching a sporty bike on the XCD platform seems to be part of the company’s stated strategy of launching four products off this platform to consolidate its share of the executive motorcycle segment, where it remains the clear market leader.
But why is Bajaj ready to peddle low-cost bikes when market leader Hero Honda Motors - which is a well entrenched player in the entry level motorcycle segment - has shied away from this segment till now?
One of the company’s vendors pointed out that Bajaj has suffered over the last few months due to lack of a “strong product line-up, with only one product in the entry level, 100-125 cc segment. Even the XCD platform did not perform well in the market….. an entry into low cost segment could give it an edge over competition since the company would be offering a good product at the lowest possible price”.
Another vendor lamented the low volumes Bajaj has been producing at its Pantnagar plant (which produces the 100 cc Platina and some bikes off the XCD platforms), saying the company’s sales performance is leaving many baffled. “We just don’t know why Bajaj bikes are not selling. The product quality and line-up seem to be fine…..the proposed XCD upgrade to a sports bike should help matters somewhat”.
A dealer said any low-cost product Bajaj develops for export markets is eventually bound to be sold in the domestic market as well. “Bajaj needs to strengthen its presence in the entry level space. Platina is its only offering in the space and the recent Platina upgrade has only cannibalised sales of the existing bike without generating significant
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