Bajaj hoping to re-Discover the executive segment with new bike models

Fourteen years after Bajaj Auto introduced the Discover brand and created the (125cc) executive commuter segment in the motorcycle market, the company is looking to hitch a ride on the brand yet again as it seeks to recoup its share in an intensely competitive market. 

On Wednesday, the Pune-based firm launched the new Discover 110 and 125. With the new bikes, Bajaj is looking to corner at least 15 per cent share in a segment that is currently led by Hero MotoCorp that sells the Passion, Splendor and Glamour brands. Bajaj sells the Discover 125 in the segment and its share is in low single digits. It hoped to improve its overall share in the motorcycle market by 5 percentage points, Eric Vas, president of the motorcycle business at Bajaj Auto, said.

The Discover 125 has been selling without any sales and advertising push for the last two-and-a-half years and Bajaj is now looking to “pivot its resource for this segment.” With the new models — the Discover 110c, priced at Rs 50,496 (ex-showroom, Maharashtra) and Discover 125cc, priced upwards of Rs 53,490 that boasts of double LED day running lights headlamps and superior performance and distinctive styling — Bajaj is looking to attract a whole set of new customers, according to Vas. The firm aimed to sell 70,000 units within the first year of launch, he said.  

But analysts are not very hopeful of the new models being able to give Bajaj Auto a volume push owing to frequent changes to its line-up and  launches of multiple variants in different engine sizes and subsequent discontinuation of several of them. “As a brand, the Discover has taken a sharp beating in its previous innings,” said Nitesh Sharma, an analyst at brokerage PhillipCapital, adding that a 500 basis point increase in the overall market share was “a tall target”.

One basis point is one-hundredth of a percentage point. In the first eight months of the current financial year, Bajaj Auto’s market share in the motorcycle market fell to 15.91 per cent from 18.60 per cent in the same period a year ago, according to the Society of Indian Automobile Manufacturers (Siam).
 

Launches of a newer generation and variants of models far too early in its life-cycle and flip-flops in strategy have led to the undoing of Discover. In 2009, three years after it announced it was exiting the entry level of the market where it was a distant third, Bajaj Auto launched a new brand called Discover DTSi in the 100cc segment.

It positioned it as a bike that would not be a regular 100cc model but would have “all the qualities of a long-distance bike, and would go 80 km to a litre”.  This was when it was already selling 125cc, 112cc and 135cc bikes under the Discover brand. Encouraged by the success of the Discover 100cc —Bajaj Auto sold 48,000 units in the first month of its launch—the company introduced the Discover 150 the same year and discontinued the 135cc. In 2011, it launched a new generation of the Discover 125. It was followed by another variant called Discover 125 T (Tourer) in 2012. In 2013, in yet another attempt to break the hegemony of rival Hero, the firm launched the 100T, 100M and 125T. None of them helped arrest a decline in the Discover segment, where the company’s share halved to 12 per cent. It then re-launched the Discover 150 in two variants to try and regain market share.  It discontinued the 150 in November 2015.

While Vas conceded a few incorrect decisions impacted the brand adversely, he pointed out Bajaj Auto was working to correct them. “We believe we now have the right set of decisions,” he said. “The company has realigned its strategy to market reality,” he said. Unlike previously, Bajaj Auto does not plan to populate the executive segment.  Bajaj Auto is aiming for a 24 per cent market share by March 2018. Besides the new Discover, it will be helped by the 2018 editions of the existing range, including the Dominars, V and Pulsar Black.