Bajaj gears up for change in dynamics

Four months ago, Rajiv Bajaj, managing director of Bajaj Auto, told this writer that the only way to get over the 100cc leadership issue in bikes was to do away with the segment completely. It was irrelevant that this would impact successful models in his own stable like the Platina and CT 100 which are doing good numbers. Recently, at a vendors meet in Pune, Bajaj reiterated his commitment to eliminate 100cc bikes through launching better models at the same price.

Over the last week, this subject has become a raging debate in sections of the media. Market leader, Hero Honda has maintained that there is no way 100cc bikes will come under any threat while Bajaj Auto has stuck to its objective of changing bike market dynamics in a big way. It is also clear that the gap between the two has been coming down for a while now. September saw a difference of barely 20,000 bikes but this has widened quite a bit in October at the time of going to press.

Of course, a lot of this momentum has to do with the festive/marriage season and a far more accurate reflection of demand can be ascertained between November and March. The general feeling is that both Hero Honda and Bajaj Auto will be neck and neck with 2.4 lakh bikes and it is anybody’s guess when the leadership equations change. There is, of course, considerable sceptism about Bajaj Auto’s determination to offer more powerful bikes at the price of the prevailing 100cc models.

The company’s managing director remains unfazed. “Years ago, nobody expected the Ambassador or Padmini to be so badly hit when Maruti introduced its small car. Similarly, in our case, the Chetak scooter wilted in front of Hero Honda’s Splendor,” he told Autocar Professional.

The reasons for these rapid shifts were due to factors like better style, design, fuel economy etc but not price. As Bajaj says, customers went for the better option even though it cost more. “This is exactly what we propose to do with the new bike platform that will raise the bar in the present 100cc segment. Obviously, we will not look for 110cc and scream from the rooftops but will launch a motorcycle that is distinctly more powerful. It could be 125cc or even 135cc,” he adds.

Bajaj says that one of the key ingredients in this renewed focus is technology, specifically DTS-i which has worked like magic for the Pulsar and Discover. He reasons that good technology will be the brand identity of his company and something that the customer deserves. “By saying that 100cc bikes will be history only means that the buyers in this segment are going to get something far better at more or less the same price,” he says.

But, doesn’t that sound like a tall claim? Surely, new features will add to overall costs of the product. How can it still be priced at the level of a 100cc bike? Bajaj is more than confident that this can be done. “We will make money on this product whose prototype will be ready in a month. It is going to be a DTS-i platform and will be profitable,” he maintains.

What then happens to the existing Discover duo (the 112cc and 125cc) and their own price points? Bajaj hints that there could be a revision here too. Obviously, this will mean going up the cc ladder. Assuming that the new product is a 125cc priced at barely Rs 40,000 (on-road), and intended to be the big growth driver, the next option could be a 135cc and 150cc Discover. Possibly, the Pulsar will be up to 170cc and 200cc. Irrespective of what the final numbers are, it is clear that Bajaj sees itself making powerful, profitable bikes. We could also expect partner, Kawasaki, playing a far more proactive role in the near future.