Bajaj Auto to drive in six new bikes to rev up market share

NEW DELHI: Two-wheeler major Bajaj Auto is set to fight back falling sales with a renewed focus on bigger engine bikes backed by six new launches in 2009.

The company will kick off with a new product, which will directly target rival Hero Honda’s best-selling Splendor/Passion range, the 135 cc XCD priced at Rs 45,000 and due for debut on January 21.

Followed by this, the company also plans two more new rollouts in value-segment (125-135 cc engine size) in April and July and three premium models (150 cc and above) later this year.

Speaking to ET, Bajaj Auto managing director Rajiv Bajaj said: “We want to pursue our strategy of being a motorcycle specialist and our focus is on motorcycles in the 125 cc and above engine size, which has 35% share in the domestic two-wheeler market. Currently, we own 50% of the market for 125 cc and above engine size. We want to grow both our product range as well as our marketshare in that segment. We do it through our DTSi engine technology, and for us, that’s the core differentiator.”

Apart from a head-to-head pricing with its rival brand, the XCD 135 cc DTSi will come with a number of features than the premium stable mate Pulsar. That includes a 5-speed gearbox, a 10.5 hp output and 65/70 km per litre mileage. It will sport a digital cockpit, nitrox rear suspension, low-friction front suspension, twin pilot headlamps and LED tail lamps.

The bike will roll out from Bajaj’s Waluj plant and will also be produced at Pantnagar from February.
Bajaj Auto has been badly affected by the defaults that dried up financing in the two-wheeler market. It’s motorcycle sales declined 8% to 1,534,149 units during April-December from 1,660,182 units for the same period last year. In December alone, it’s sales skid 33%.

“In the entry-level segment, we witness a major sales growth with our Platina model,” said Mr Bajaj. “Due to defaults, finance dried up and our numbers fell to about 40,000 units per month from 75,000 units,” he added.

In 2006 and 2007, the entry-level segment, where cheap and cheerful 100 cc motorcycles rule, suddenly expanded when financiers got aggressive and offered bikes at Rs 2,000 down payment. “It was bad business and it’s over and no one will go back to that structure,” said Mr Bajaj. For Bajaj, that leaves the problem of a shortfall of 30,000-40,000 motorcycles a month.

Mr Bajaj is using Bajaj Auto Finance (BAF), the in-house financing company, to get over the entry-level sales spike. “However, NBFCs typically have higher cost of finance. So we’re countering that with 1-2 years of extended free warranty cover,” Mr Bajaj said. Already BAF has financed 25,000 bikes in December despite its 3% higher interest rate. “When compared to other banks, that is a good performance,” said Mr Bajaj.

Two years ago, Bajaj Auto had announced that it would not look at the entry-level segment because there’s no money there. “We are not abandoning 100 cc bikes,” said Mr Bajaj. “All we are saying is that we would want to address the mid/value-segment that is now ruled by our competitor’s Splendor/Passion range, with 125 cc and above products.”

Source: http://economictimes.indiatimes.com/News/News_By_Industry/Auto/Bajaj_Auto_to_drive_in_six_new_bikes_to_rev_up_market_share/articleshow/3965486.cms

Bajaj Auto drops Triumph plans, trains focus on KTM

NEW DELHI: Bajaj Auto, which was negotiating with top European motorcycle brand Triumph for an alliance/acquisition, has now decided to put those plans on the backburner and instead focus attention on its KTM brand. The Pune-based two-wheeler major will increase its holding in KTM, Europe’s second largest sport motorcycle maker, from the current 25% to around 30% by early next year.

Accordingly, it plans to increase its representation on the KTM board as well. When contacted, Bajaj Auto MD Rajiv Bajaj said: “We are focussing our top-end efforts on the KTM brand. By next year some of those products will be out in the market and we will work towards riding that brand in the lifestyle segment.

We are not pursuing any further negotiations with overseas brands right now.” Although no confirmations were available, market sources say the 5% increase in stake would cost around Rs 60-80 crore. Bajaj Auto started talking to Ducati and Triumph mid 2007. By the end of the year, company chairman Rahul Bajaj was quoted saying that BAL has walked away from Ducati because it was too expensive.

However, as late as January 2008, Triumph boss John Bloor came to India and visited BAL’s Chakan plant. Talks continued through summer but seems to have stalled since then. Bajaj Auto bought 14.5% of KTM from the open market in October 2007 for around Rs 300-350 crore. It subsequently raised its stake to around 20.9% and then to 25%. Mr Rajiv Bajaj is already on the board of the company.

In the last 10 months, a lot of the product development and R&D work for KTM has shifted to India and Bajaj will roll out its KTM range through its Probiking retail network shortly. Bajaj Auto-the market leader in the performance segment in India, thanks to the Pulsar twins and Avenger-had been looking for an alliance or acquisition to possess enough engineering and product development expertise to crank out cruisers and higher displacement bikes in the 200 cc plus range.

The company has been getting increasingly aggressive with its bike retail channel Probiking and Mr Bajaj has been on record that the company will crank out more products to stock its Probiking shelves.

The promoters of KTM currently own 50.1% of the company. The company is listed on the Vienna stock exchange and Bajaj’s current stake comes from the free float shares making it the second largest shareholder. At the time when the first tranche of 14.5% stake acquisition, KTM CEO Mr Stefan Pierer told ET, “If there’s something free on the market they (Bajaj) could end up increasing their participation. We see this as a long-term partnership and we would be very positive about it.”

Soruce: http://economictimes.indiatimes.com/News/News_By_Industry/Auto/Two-wheelers/Bajaj_Auto_drops_Triumph_plans_trains_focus_on_KTM/articleshow/3882836.cms

Bajaj Auto Rolls Out New Platina

Bajaj Auto, the countrys second largest motor bike manufacturer, began selling the Platina 125cc in a bid to gain market share from its biggest rival, Hero Honda Motors.

This is the Pune-based companys first among three new motorcycle offerings for the year, based on the patented DTS-Si technology. The 125cc bike, which is priced at Rs 39,000 (ex-showroom) is cheaper than Indias largest selling 100cc bike Hero Honda Splendor, which is priced at Rs 41,000.

Amit Nandi, general manager (marketing), Bajaj Auto, said, Our aim is to convert the user of 100cc bikes to 125cc. This new bike will offer the power of a 125cc motorcycle and also deliver a mileage of more than 100 kms to a litre.

source: www.siamindia.com

The sales of Bajaj Auto in the five months ended August 31 dropped by 1 per cent to 623,000 units as the company failed to enthuse customers.

It plans to launch newer models to retain customers. In contrast, Hero Honda sales grew about 20 per cent to 14,46000 units during the period. Hero Honda has been pushing sales in rural areas.

The Platina is based on the engine platform of the XCD 125, which was launched during the same period last year.

Bajaj XCD 125 DTS-Si is India's Largest Selling 125cc Motorcycle

Mumbai, Maharashtra, India, Friday, August 08, 2008 -- (Business Wire India) -- Launched in September 07 the Bajaj XCD 125 DTS-Si is India's largest selling 125 cc motorcycle. With average sales of 27,000 units pm in Quarter 1 of 0809, the Bajaj XCD has overtaken all established 125cc brands. Launched to upgrade 100 cc customers from overpriced and under-performing 100 cc motorcycles to a superior performing and feature-laden 125cc product, the Bajaj XCD 125 has been instrumental in migrating customers away from the 100 cc segment. The 125 cc + segment today constitutes almost 40% of the motorcycle market, up from only 25% two years ago.Bajaj has a dominant market share of almost 50% in the 125 cc + segment. Bajaj XCD 125 alone contributes 13% of the 125 cc + segment, a feat not achieved by other 125cc products after years of existence.Mr. Amit Nandi, General Manager (Marketing & Probiking) Bajaj Auto, said, " 60% of Bajaj XCD 125 DTS-Si customers were erstwhile 100 cc customers who felt compelled to choose the XCD 125 over other 100 cc products due to its obvious superiority on performance, features and fuel economy on the one hand and the sporty, youthful image of the Bajaj Brand on the other " In continuation of its strategy to catalyse migration of 100cc customers to superior performing 125cc+ products Bajaj will soon be unveiling 3 more products from the XCD PLATFORM, off which the Bajaj XCD 125 was the first PRODUCT. This will further accelerate the unabated decline of the 100cc segment from 75% of the market two years ago to only 60% of the market now