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As Bajaj Auto tries to put the Discover on a new path, Eric Vas, president for the motorcycle business, talks to Swaraj Baggonkar on the new Pulsar and how the company expects to improve its market share in motorcycles. Excerpts.
How has 2015 been for the industry and for Bajaj Auto?
The motorcycle market has slowed down. In quarters one and two growth rates were in the double digits. The industry’s sales declined 5 per cent in the third quarter and by 7 per cent in January and February. The second half has been challenging and the growth rate for the year so far is just 3.5 per cent, much lower than what we expected.
What were the expectations?
The industry was expecting double digit growth in motorcycle sales and the first two quarters were in line with it. We hoped to finish the year with 9.5-11 per cent growth at the industry level.
Has the rural market been a reason behind the disappointment?
Sales of 100cc bikes have slowed dramatically. Typically, 100cc bikes used to sell a lot in rural markets. So people draw that conclusion, which may or may not be correct, but it is largely indicative.
Pulsar has been your flagship product, but the Discover has been a disappointment...
Yes, we have seen a dip in market share. But we launched the Discover 150 in August with the purpose of repairing that brand. The Discover 150 has done a good job, we are getting good volumes. We are well on our way to be where we want the Discover to be. Making sure the brand is aligned with customers takes time, we have to move gently. We will fix it over time.
How will the coming quarters shape up for the industry and Bajaj Auto?
The north Indian wedding season is coming up in April and May so that should hopefully give the industry some volumes. I will not venture beyond the next quarter because I simply do not know what is going to happen. When you read the numbers in April and May, Bajaj will be gaining market share. We are confident the Platina ES and CT100, two products we launched in January and February, will give us significant volumes.
What was the rationale behind bringing back the CT100?
We would like to do much more in the 100cc end of the market. The CT100 was one of those things, and we believe that for the 100cc customer we need to have two brands, Platina and CT100. The Discover will continue, but at the top end of the 100cc segment.
What is your market share in the 100cc segment?
The 100cc segment is split into entry level and others. Entry level bikes sell around 200,000 a month and the 'others' sell 300,000. We used to have 23 per cent share in the entry level and we hope to take that to 50 per cent. The correction has begun on the Discover brand so I cannot fully answer the question. There is an interplay between the 125cc and 100cc segments.
Can rationalisation be expected in the number of the products under the Discover brand?
We have done the rationalisation, there can be no further rationalisation unless, of course, customers come back to us saying they are going to stop buying a product.
Was the pending order for Discovers by the previous Sri Lankan government cleared by the new one?
The government is still reviewing some of the old contracts. After their review is complete they will take a decision.
With the 200RS, will the Pulsar 220 remain?
Of course, the Pulsar 220 will remain, it is very different from the 200RS.
