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Bajaj Auto claims top position in premium segment in 2015

Bajaj Auto claims top position in premium segment in 2015
Nikhil Puthran Nikhil Puthran Friday 08 January 2016, 16:38 PM

Bajaj Auto stated to PTI that it has ramped up its market leadership in the sports and entry-level segments in 2015 even as the industry faced a daunting time, adding that its focus this year will be the mid-segment. To beat the slump in the mid-level or the executive segment as Bajaj labels it, the Pune-based company is planning to roll out a brand new model. This will be the first new model in a decade from the Bajaj stable.

As part of the strategy, Bajaj Auto President Eric Vas said it has set a target of increasing sales in the mid-segment, which currently has only two models from the company in the Discover range (125cc and 150cc), by over three times to 70,000 units a month this year. Last year, its sales hovered around 20,000 units per month in the segment. He further said the plan this year is to do an encore of what it did in the entry and premium segments in 2015 and to achieve this, it will be launching a brand new model in the mid-segment.

The third-largest two-wheeler player will also launch a new entry-level model in the March quarter and a variant in the sports category in the second half of the year. The entry and sports/premium segments together constitute 43 per cent of the industry and Bajaj is now the leader in these clusters with a 36 per cent market share, Vas said. He said in the entry segment, Bajaj grew its market share from 23 per cent in 2014 to 36 per cent in 2015, one percentage point more than its target for the year.

In the sports/premium segment, the auto firm increased its market share from 44 per cent to 52 percent, two notches below its target. The company, known for its high margins globally, however, refused to offer any target for 2016. In December 2014, the company had set the targets for 2015. But Vas said once the third quarter earnings are announced, it will make its strategies public. On the back of two launches in the entry segment, the company had a dream run last year, selling 77 per cent more Platinas and CT100s, it said. While the industry as a whole dropped 3 per cent in the year gone by, Bajaj sold 8 per cent more vehicles, primarily led by the entry space category, but the fall in mid-segment scuppered the gains overall as industry share inched up to 18 per cent in 2015 from around 17 per cent in 2014.

In the November-December period of last year, post- the launch of three new Avengers, Bajaj ramped up its market leadership to 53 per cent in the mass sports segment priced below Rs 1 lakh. "Introduction of new models such as the CT100 (offering 89.9 kmpl) and the new Platina with an electric start offering of 99.7 kmpl, we strengthened our position in the entry-level segment. In the sports segment too, we enhanced our leadership with the launch of the Pulsar RS200, Pulsar AS200 and AS150 and the exciting Avenger Cruise 220 and Avenger Street 220 and 150," Vas said.

Asked whether the company will be able to meet the new emission norms (BS VI) to be effective from April 2020, Vas said these rules are primarily meant for the four-wheeler industry but Bajaj is ready to adhere to any guideline. "We have the technology and we can rollout our models meeting the new emission norms in four months. But speaking matter of factly, most of the work is to be done by our vendors and our job is to certify those new parts. So in capex terms too, the impact is more on the vendors than the auto companies," he said.

Asked about meeting the new safety standards like ABS and CBS on two-wheelers, to be effective from April 2017 and its impact on prices, he said the company will have to pass on the price increases, which will be to the tune of Rs 7,000 to Rs 10,000. The CT100, which re-entered the market last year, and the new Platina which made its debut in January, have gained market share and volumes in the entry-level segment. Bajaj Auto sold 6.81 lakh entry-level commuter motorcycles in 2015 as against 3.83 lakh in 2014, a growth of 77 per cent.


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