Bajaj bets big on new bikes to rev up growth

Bajaj Auto is betting big on new bike launches to keep its growth momentum ticking through 2012-13.

Tuesday, January 24, will see the first KTM offering, the 200 Duke, showcased in New Delhi. Bajaj Auto has a 39 per cent stake in the Austrian motorcycle company and will produce the bike at its Chakan plant near Pune.

“We expect this initiative to bring enormous energy into our system. Customers who visit our showrooms will hopefully be impressed with what they see and overall sentiment will be lifted in the process,” Mr Rajiv Bajaj, Managing Director, told Business Line.

NEW PULSAR RANGE

On January 30, the company will unveil in Mumbai the first of its all-new Pulsar range, which will be part of the mid-sports category.

This will mark 10 years of its launch during which time the brand has emerged the leader in the sports segment.

More importantly, the Pulsar was a game-changer for Bajaj Auto in motorcycles and helped reinforce its decision to exit the scooter business.

“I am confident that the new Pulsar will be the most stunning sports bike in the world. It is also my belief that as much as DTS-i took the market by storm, the new technology in the Pulsar will shake up the market this decade,” Mr Bajaj said.

By June, another all-new product will be launched, albeit more in the volumes space which suggests that it could be part of the Discover family.

At present, the company offers three options (100, 125 and 150cc) and it will be interesting to see how the brand new commuter will grow the (Discover) success story.

The new technology for the Pulsar could also be extended to the Discover range keeping in line with Bajaj Auto's focus on ‘innovation for mass consumption'.

“Our strategy is to be a bike specialist. We have every reason to believe that 2012-13 will be an exciting period where we can produce something special for customers both here and abroad,” Mr Bajaj said.

EXPORT MARKET

This makes sense given that exports already account for 35 per cent of the company's business and this component will only increase in the coming years.

Africa has already been identified as the key growth driver, in addition to Asia, while the KTM association could help Bajaj Auto make inroads into Brazil as part of the bigger Latin America journey.

OUTPUT TARGET

The company hopes to wrap up this fiscal with production of over 4.4 million bikes and three-wheelers and the new launches in 2012-13 are expected to give a fillip to the growth tempo.

The fourth plant may have to wait a while longer since the existing units in Chakan, Waluj and Pantnagar can meet production needs for the moment.

“We have an astute business model with strong front and back-ends. We know that we are a volumes player but this does not have to translate into mediocre profitability.

“As much as it is common to find high profitability with low volumes, we are striving for fairly high profitability with fairly high volumes,” Mr Bajaj said.