Bajaj Auto revs up for next growth surge

Bajaj Auto, which has had a heady run with the Pulsar and Discover motorcycles, is now preparing the groundwork for the next phase of growth.

“We are looking at a fresh onslaught of products which will keep our growth momentum going. Will it be a new Pulsar or Discover? Or will it be something out of the ordinary? I really have no answers at this point but do know that an aggressive strategy is being worked out,” Mr Rajiv Bajaj, Managing Director, told Business Line.

It remains to be seen, though, whether the company will take a detour from its twin brand focus, which has worked wonders in terms of big numbers and doubling market share in a brief span of time.

The Pulsar and Discover are clocking monthly volumes of over 2,00,000 units. In fact, the more recently launched Discover 150 has spawned a new product category in the form of the sporty commuter segment.

“The next step is to increase volumes of these two brands to levels of 2,50,000 to 3,00,000 units a month. We are confident that this can be done in the coming months,” Mr Bajaj said.

From the company's point of view, the most heartening news is that it finally has a strong foothold in the commuter segment where Hero Honda is the market leader. The fact that the Discover brand has overtaken the Passion and is now second to the Splendor has also been cause for cheer.

Sports segment scores

These changing dynamics have also had their impact in the two-wheeler sector. For instance, the overall commuter motorcycle segment accounted for nearly 86 per cent of the industry in 2008-09 but has since fallen to 82 per cent in the first quarter of this fiscal.

Despite this shrinkage, Bajaj Auto has seen its own share in the commuter category increase from 25 per cent to 30 per cent in this time period. According to Mr Bajaj, the Discover 100 and 150 have clearly played a big role in making this happen with monthly sales of nearly 1.5 lakh units.

Likewise, the share of the sports segment has increased from the level of 14 per cent in FY'09 to 18 per cent in April-June 2010. In the case of Bajaj Auto, the good showing of the Pulsar has seen its share move up to 50 per cent from 43 per cent a little over a year ago.

“These figures clearly show that we are on track and being driven by a good, robust brand strategy,” Mr Bajaj said. Monthly sales of the Pulsar are a little over 75,000 units today compared with barely 35,000 bikes in 2008-09.

Indications are that the share of the overall commuter category could reduce even further, though very gradually, from the current 82 per cent level. Customers are increasingly showing a preference for sports bikes and scooters. Clearly, the rules of the game are changing rapidly in the two-wheeler space.