Bajaj sees scooter as key to top slot

Bajaj Auto will have to look beyond motorcycles and fall back on old favourite, the scooter, if the company was to regain its numero uno position in the two-wheeler segment from Hero Honda, the company's marketing chief R L Ravichandran said.

He told Business Standard at the Auto Expo in Delhi that though there was an effort on within Bajaj to gain more market share in the motorcycles segment through new product innovations, it would not be enough to beat rival Hero Honda which only produced and marketed motorcycles.

"We expect the motorcycle market to grow at around 15 per cent in 2004-05. Even if we grow at the same rate, we will not match their numbers," he said.

Hero Honda is expected to close the year with sales of around 1.8 million two-wheelers (only motorcycles), whereas Bajaj's cumulative two-wheeler sales (motorcycles, scooters and scooterettes) in the year will be around 1.4 million. That leaves a gap of around 400,000 bikes.

The company's deputy managing director Rajiv Bajaj had said earlier in the week that he expected to regain the number one position in the two-wheeler segment latest by 2006-07. By then, the company's cumulative sales will touch the 3-million mark.

Much of Hero Honda's growth during the next few years will depend on how fast the consumers graduate from 100 cc bikes to 125 cc bikes - Hero Honda is a dominant player in the 100 cc segment, which commands 90 per cent of the total market -, and on whether or not its partner, Honda, which will also start making motorcycles from this year, will allow smooth transition of technology and product designs to the joint venture with the Munjals.

However, Ravichandran said that going by the current market trends, it will still be difficult to become the numero uno player in the motorcycle market. In the segment, Bajaj crossed the 1million mark this year and hopes to sell around 1.3 million bikes next year.

New products are in the pipeline which, he hoped, will help the company be at par with Hero Honda in the next two years. Some of them are scooters with new engine technology and superior design.

A 125 cc motorcycle with new features will be launched in the middle of this year, which the company expects to change the dynamics of the market completely.

"We cannot tell you much about the product. But this should be able to shift numbers swiftly from 100 cc to 125 cc. More and more people will buy the 125 cc bikes, especially those who are now owing 100 cc bikes. The new product will compare with the fuel efficiency of a 100 cc bike and its price tag, almost. People are willing to pay an extra amount to buy a better product," he said.