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|25th October 2006, 08:24||#1|
Join Date: May 2006
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Goodbye 100cc, hello 125cc: Bajaj Auto
Posted online: Wednesday, October 25, 2006 at 0000 hrs
New Delhi, October 24, 2006: India's second largest two-wheeler maker, Bajaj Auto, is taking a risky, yet, tactical turn in its quest to dethrone Hero Honda Motors as the leader in India's Rs 33,000 crore two-wheeler industry.
By September next year, Bajaj will exit the 100cc segment, which accounts for 80 per cent of India's 7 million units motorcycles market. It currently clocks 1.5 million units a year with the CT100 and Platina in this segment.
Instead, the Bajaj portfolio will begin at a higher capacity, expected to be 125cc, for which it is developing a low cost platform from scratch. The first prototype of the new vehicle will roll out next month.
Two variants of the new bike will be priced in the Rs 34,000 to Rs 42,000 range, like any other 100cc bike on the market. Bajaj hopes his higher capacity bikes at the price of a 100cc product will give it the crucial thrust to overtake Hero Honda as the country's largest two-wheeler maker. "The push for leadership and exit from 100cc are inter-related," Bajaj Auto managing director Rajiv Bajaj said.
The 100cc segment that Bajaj has targeted is now the mainstay of arch rival Hero Honda's business, wherein it has a 55 per cent marketshare followed by Bajaj's 26 per cent. The segment accounts for 98 per cent of Hero Honda's 4 million bike volumes. A Hero Honda spokesperson said the company would continue to lay importance on 100cc products. "We believe the 100cc is an important segment within the two-wheeler market," he added.
If successful, this would be the most significant upset in the Indian automobile market since Hero Honda toppled Bajaj Auto as the largest two-wheeler maker in 2000-01 and Maruti Udyog overtook Hindustan Motors in 1983-84, the first year Sanjay Gandhi's people's car — the Maruti 800 — was launched.
This is the latest salvo from Bajaj Auto ever since a battle of nerves began between the two bike majors. Bajaj began closing in on Hero Honda following the launch of Pulsar (150cc and 180cc), followed by Wind (125cc), Discover (125cc), CT100 and Platina. Hero Honda, however, hasn't had spectacular success since Splendor, which was launched in 1994. Although its CD Dawn (100cc), Passion (100cc) and Super Splendor (125cc) have done reasonably better than the other bikes it has introduced in these 12 years.
In September this year, Bajaj had closed Hero Honda's lead in motorcycles to just 37,883 units, down from 92,206 units in September, 2005. While Bajaj sold 2.45 lakh motorcycles (up from 1.65 lakh in September, 2005-06), Hero Honda sold 2.83 lakh units (against 2.57 lakh). In April-September, Bajaj sold 10.42 lakh units, against 7.99 units in the same period last fiscal. Hero Honda sold 14.83 lakh units, against 13.77 lakh units.
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