NEW DELHI -- Auto parts suppliers to Bajaj Auto Ltd. have been informed by India's second-biggest two-wheeler maker by sales that the company is developing a new 100-cubic centimeter motorcycle that could cost less than 40,000 rupees ($905.)
The new motorcycle is being developed as part of Bajaj Auto's plan to expand its offerings in the entry-level segment, executives at two auto parts suppliers, who declined to be named, told Dow Jones Newswires recently.
Bajaj Auto currently sells 10 motorcycle models, including two with 100cc engines--the Discover 100 and Platina. It also sells a 150cc motorcycle under the Discover brand and a Platina 125cc motorcycle.
Offering more products in the entry-level motorcycle segment will help Bajaj Auto intensify competition with bigger rival Hero Honda Motors Ltd. The New Delhi-based affiliate of Honda Motor Co. controls more than half of India's motorcycle market with 15 two-wheeler models, including six 100cc models such as the Splendor+, Passion Plus and CD Dawn.
Others, such as TVS Motor Co. and Honda Motorcycle Scooter India Pvt. Ltd., also sell 100cc motorcycles in the country.
Entry-level motorcycles with 100cc-125cc engine capacities comprise more than half of the more than nine million motorcycles and scooters sold in India each year, according to industry data.
Bajaj Auto Managing Director Rajiv Bajaj confirmed that the company is working on a new entry-level motorcycle, but declined to disclose its price or engine capacity.
He said the company may introduce the new motorcycle next year. "We have only begun an evaluation, hopefully (the vehicle can be launched in) 2011," he said.
Bajaj Auto previously decided to withdraw from the entry-level motorcycle segment but re-entered the segment in July last year with the Discover brand. The company has sold more than one million units of the Discover brand to date.
Bajaj Auto's motorcycle sales rose 68% during April-August 2010 to 1.4 million units. In comparison, total motorcycle sales in India grew 24% in the same period to 3.54 million units.
Bajaj Auto is in discussions with Renault SA and Nissan Motor Co. to use a low-cost minicar platform to develop more vehicles, Rajiv Bajaj said.
"This (more vehicles on the platforms) is possible, although (it's) yet under discussion," he said, adding that Bajaj Auto can consider introducing both low-cost as well as premium vehicles on the minicar platform.
The new products could be marketed independently by Bajaj Auto, Bajaj said, adding that a light truck is already being planned for development on the minicar platform.
The Renault-Nissan Alliance and Bajaj Auto signed an initial agreement in July to produce a low-cost minicar that will likely compete with Tata Motors Ltd.'s Nano minicar, currently the world's cheapest car. Bajaj Auto, Renault and Nissan's low-cost car is expected to be introduced in 2012.
Under the July agreement, Bajaj Auto will be responsible for the design, development and manufacturing of the new car, while Renault and Nissan will be responsible for branding, marketing, sales and distribution.
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