Bajaj Auto to make a comeback in two-wheeler market with 7 new brands

Auto-major Bajaj is ready to re-enter competitive market with the launch of seven new brands in the Indian market soon. Bajaj company Managing Director, Rajiv Bajaj has assured shareholders that the company is taking corrective measures to boost its presence in the domestic market including launch of more than half a dozen products.

The Bajaj company is confident to reinstated its market share to 26 per cent from the current 15 per cent on the back of new launches in each of the seven brands it sells.

"By December (2017) we will launch new products under all our seven brands - CT, Platina, Discover, V, Avenger, Pulsar, andDominar. Our effort is to gain another 6-7 per cent market share (from 20 percent by end of Q2). We want to go to 25-26 percent," said Rajiv Bajaj.

Due to the oddity created by the sudden change in emission norms during the last two days of March, 2017 the Bajaj company has lost share.That was when companies dispensed out 50 per cent discount to get rid of the older Bharat Stage III stock.

“When the transition took place from BS-III to BS-IV we had done the right thing. Because we had converted to BS-IV well in advance and had no almost stock of BS-III by end of March. The competition on the other hand had lakhs of vehicle in stock”, Bajaj added.

Bajaj Auto claimed that the company had just 15,000 BS-III vehicles in the channel. “Discounts ranged from Rs 5,000-25,000. We estimate the competition put out discounts of Rs 700 crore during the two days on 8 lakh vehicles. Consumers, who were going to buy products in April, May, June and July, decided to prepone to end of March,” Bajaj said, speaking to shareholders on Thursday.

With the help of new launches under the brands V, Avenger, Dominar and Pulsar Bajaj Auto managed to spruce up its market share to 20 per cent by end of December in the motorcycle segment. However, it fell to 15 per cent by end of last month as dealers engaged in restocking their inventory.

“Some of our customers also went (to competition) because we did not seek to match their discounts. As a result the reality is that on the ground the first quarter has been poor for the industry. However, since our competitors liquidated huge stocks from dealers and sub-dealers they are able to put back into the channel.

Since we had no BS-III vehicles and did not give discounts we did not have the opportunity to put products back in the channel. In short, companies bought market share in the first quarter of this year by paying for it in the fourth quarter of last year,” added Bajaj.

But as market shares underwent a dramatic change at the wholesale level (company to dealer sales) Bajaj mentioned that at the retail level (dealer to customer) there hasn’t been much change in market shares.

“Having come that far it is unfortunate that we have fallen back to about 15 per cent share in the first quarter (Q1 FY18). Therefore, it appears that our share has fallen to 15 per cent. But I can assure you that in retail terms our market share is intact. By end of this quarter you will see 20 percent market share come back to Bajaj, it’s not gone anywhere,” added Bajaj.

In the last 18 months Bajaj Auto launched three products generating 25,000 motorcycles sales every month. The company is presently making 4,000 Dominars every month which it hopes will be increased to 10,000 units by end of the year.