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Bajaj hits past forward

CT100 and Platina, Bajaj’s two bike brands, which consumers had sidelined for the lure of stronger brands from market leader Hero Motocorp, are churning the numbers for the Pune-based company. From an average of around 35,000 units a month, Bajaj Auto sales in the no-frills, entry 100cc space has gone up to 80,000 units a month since January. Its market share in this segment too has shot up to 40 per cent from 24 per cent earlier.

Priced at Rs 35,000 (ex-showroom, Delhi) the CT100 is the cheapest bike in the Bajaj line up followed by Platina. It had piqued consumer interest for its high mileage and low running costs on rickety rural roads but it had dropped off the radar, for customer and the company. It was discontinued 11 years ago – so how has it been able to make the instant consumer connect after the relaunch?

Kevin D’Sa, president (finance), Bajaj auto said, “This was an outstanding brand, very well-recognized and accepted by the customers as one of the most reliable mileage bikes that was there until we withdrew it and introduced the Platina. So, the minute we’ve launched it back, the recall has been instant, and, has been very well accepted”.

The 100cc segment is divided into two categories – entry level and others. The market for entry level (M1) bikes is around 200,000 bikes per month while the ‘others’ (M2) account for 400,000 bikes a month. The M1 segment with prices of under Rs 44,000 comprises models such as Platina and CT100 from Bajaj, HF Deluxe and HF Dawn from Hero MotoCorp, Yamaha Crux and the TVS Sport.

The M2 segment which also has 100cc bikes has prices ranged between Rs 44,000-51,000. Models like Bajaj’s Discover, Hero’s Splendor and Passion, Honda’s CB Twister and Dream Yuga and Yamaha’s YBR 110 are part of this segment. The Discover 100 whose price goes up to Rs 50, 700 continues to play in the premium 100cc category.

Platina, a forgotten brand, which was the entry model for Bajaj before the relaunch of CT100, was given a new lease of life in January this year when the convenience of an electric start option was added to it. This was done by Bajaj to match the competition Hero on the HF Deluxe and TVS on the Sport were already offering the feature. “Bajaj is at a place in the 100cc segment where they want to try everything. More products will offer them a better chance to cater to a wider range of customers. As of now none of the products is very popular but the combined add up considerable volumes. The segment has been stagnant in recent quarters with some negative growth numbers reported. As the economy recovers the segment will also find flavour once again. Due to its huge size, any growth in the future will provide huge incremental volumes to the participants”, said Deepesh Rathore, analyst at Emerging Markets Automotive Advisors.

For Bajaj, the two models have collectively filled up the sales vacuum created by the fall in numbers of its troubled Discover brand, whose demand has experienced a free fall over the last several quarters. Discover saw a three-fold contraction in volumes sold over the last two years. In 2014-15 the Discover (models under 125cc) recorded a fall of 56 per cent to 429,299 units as compared to 985,610 units sold in 2013-14. This was preceded by a 23 per cent fall in volumes in 2013-14 compared to 2012-13 when volumes closed at 1,274,553 units.

Why did Discover fail? The carpet-bombing of brand Discover drove consumers away from Bajaj showrooms. D’sa, said during a call with analysts earlier, “To some extent we compounded the problem by launching several products of the Discover. And that’s why the fundamental problem of the Discover is not quality...but it lost the position or what it stands for.” Bajaj launched several models and derivatives under the Discover brand fueling confusion among consumers about its positioning. The brand had 10 models and variants straddling 100cc to 150cc while also having a ‘commuter’ version and a ‘sporty’ version on some of these models. So as D’sa said, “if you ask the customer what does Discover mean, he does not know what it is”.

While the Platina and CT100 steer Bajaj’s ship in the 100cc space for the time being giving the company some time to regroup and forge a better plan for the Discover, sources say Bajaj is preparing to launch a new motorcycle in the next few months under the Discover brand.

“The focus will be on the CT, Platina and Pulsar. The strategy is basically to shrink the 100cc space of what I would call the Splendor territory. And therefore, for us, the focus will be again on the 125 cc space and above. And for that, we are working on it. And I would expect a product to come out more to in the second half.

I think what is required is the focus which has to be pure clear cut positioning of Discover, and that’s what we intend doing, you should see the results coming out in H2”, added D’Sa.