Bajaj to restart Boxer sales to challenge CD Dawn

Bajaj Auto plans to restart sales of its Boxer motorcycle by April as itseeks to boost volumes for a second bid to challenge Hero Honda’s CD Dawn entry-level model.

“Boxer will be launched in the commuter space, where there is a strong boom,” chief executive (two-wheelers) of Bajaj Auto, S Shridhar, told Financial Chronicle, without giving the pricing and technical specifics of the model. “Pulsar and Discover will remain the focus brands for the time being. Boxer will initially start in a small way, while KTM (launch) will also happen soon,” Shridhar added.

The commuter segment is the bread and butter segment for two-wheelers and constitutes more than 60 per cent of the country’s total motorcycle sales that have expanded 24 per cent to 6.6 million units from April to December, according to Siam (Society of Indian Automobile Manufacturers). A company needs to have a strong product in the segment to have good market share, according to Abdul Majeed, auto practice leader at PwC. “Multinationals are also now gearing up to hit this segment, where Hero Honda and TVS are already strong,” he said.

Bajaj Auto had phased out the Boxer in 2007 and replaced it with the Platina, indicating that it wanted to offer more at a similar price. However, the Platina (Rs 35,300) failed to make much of an impact in the commuter segment against Hero Honda’s CD Dawn (Rs 33,500) and TVS’s Star City (Rs 39,200). It remains unclear whether Bajaj will continue to sell the Platina alongside the Boxer after its relaunch.

Industry officials in the know say that the Boxer would be priced below Hero Honda’s Splendour (Rs 42,000) with an engine capacity of around 125 cc. The company still exports a Boxer motorcycle variant to China, the world’s biggest motorcycle market.

Bajaj Auto’s main brands Pulsar (85,000 units per month) and Discover (130,000 units per month), available in many different engine options, jointly record sales of around 215,000 units a month on an average in the domestic market. However, in the third quarter, Bajaj lost market share marginally to Hero Honda as new launches fuelled the latter’s sales. Hero Honda holds more than 52 per cent of the two-wheeler market against Bajaj Auto’s 27 per cent.

“Going forward, Honda Motorcycle & Scooter India (HMSI) getting aggressive in the market is going to affect Bajaj Auto more towards the premium side, as Bajaj is getting higher sales from the premium segment. Hero Honda continues to be strongest in the entry-level segment,” senior research analyst Angel Broking Vaishali Jajoo said. HMSI plans launch to six models in 2011, starting with the CBR 250R sports bike in April at a starting price of Rs 1,50,000.

Bajaj is pinning hopes on Discover to topple Splendour, the largest selling motorcycle in the country, by March this year. It is going aggressive with ad campaigns to boost sales of Discover and aims at total monthly motorcycle sales (including exports) of over 300,000 units till March this year. It has forecast 2010-11 annual sales of four million units (including exports and three-wheelers). On the other hand, Hero Honda has been averaging over 400,000 monthly unit sales with the year’s forecast set at more than five million units.

Bajaj Auto, which holds 38 per cent stake in Austria’s off-road sports bike maker KTM Powersports, is also expected to launch the KTM Duke 125 cc motorcycle soon.