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Bajaj Auto to invest Rs 300 crores on R&D – New motorcycles under Dominar, Pulsar umbrella?

With share prices scaling new heights and Bajaj Auto posting consolidated net profit of INR 1,175 crores for Q4 FY2018, it is the perfect time to increase their focus on the future. And in order to do that, Bajaj Auto Limited has also announced fresh investments of INR 300 crores into future products and R&D.

Bajaj Auto Limited, headquartered at Pune, India, manufactures two and three wheelers. Wishing to enhance its presence in the sportsbike segment and to bring in fresh products in the three wheeler segment, the company will be infusing added investments with an eye on Research and Development.

Autologue Design

Bajaj is aiming at improving their presence in the 350-500 cc segment. In this segment, it is Royal Enfield that is the current leader, with over 85% market share. Bajaj had launched Dominar in this segment, with an aim to sell 10,000 units a month. But that has not happened. Dominar sales stand at about 2,000 units a month, while Royal Enfiels sales are at 75,000 a month.

But, that is not the end. Based on the Dominar’s 373 cc engine, Bajaj is expected to launch new motorcycles. Though it is not clear what will be these new motorcycles. Rumors state that it could be an adventure variant and a cruiser variant. The company has not stated anything officially yet on this matter.

Image – Autologue Design

Apart from this, the company’s current portfolio is also facing increased competition in the entry level two wheeler segment. This could be because there are not much exciting products in this segment and has caused the company to face some level of stagnation.

In Q4 FY 2018, Bajaj Auto Limited reported their highest quarterly profit growth in a year. While consolidated profits grew 36% to INR 1,175 crores, net profits were at INR 862 crores during the January to March 2017 period while total revenue from operations stood at INR 6,773 crores in quarter ended March 2018 as compared to INR 5,212 crores in the same period of the previous year. In the fourth quarter, sales of motorcycles stood at 8,56,389 units, an increase of 22% as compared to 7,01,017 units sold in the same quarter of previous year.

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