The production halt is expected to be a setback on Bajaj Auto’s retail expansion plans for the Chetak
It has been a year since the Bajaj Chetak retro classic electric scooter’s launch but the company has been struggling to realize its full potential. The lifestyle product received over 50,000 expressions of interest and has registered sales of over 1,300 units – from just two launch cities – Pune and Bangalore. Bajaj is currently sitting on an pending order book of over 1,500 units. However, production bottlenecks has forced Bajaj to close bookings temporarily.
Bajaj Chetak price hike
Business Standard reports that Bajaj is planning to increase the price of the Chetak when the production resumes to a INR 1.5 lakh (ex-showroom). The electric scooter was launched in two variants with base Urbane variant priced at INR 1 lakh and top-end Premium variant priced at INR 1.15 lakh (both prices are ex-showroom, Pune).
It was earlier reported that Bajaj Auto has been making loss with every unit of Chetak sold at its launch price. The price hike is aimed at mitigating / eliminating this loss.
Buoyed by a strong response from the customers, Bajaj Auto is confident that the price hike will not adversely impact the scooter’s prospects. The product is said to have attracted all kind of buyers including very affluent ones who have never owned a two wheeler before.
Production bottlenecks
Soon after the Bajaj Chetak was launched amidst much fanfare, India went into a strict national level lockdown which brought production to a grounding halt. Subsequent logistical issues, compounded by a worsening relationship between India and China, adversely affected the import of critical components.
Bajaj did finally manage to resume production only to put it on hold again due to acute shortage of semiconductors on a global scale. The pause in production would set Bajaj Chetak’s retail expansion plans back significantly. So, a price hike seems inevitable to limit the damage.
Expansion plans and exports
Bajaj is currently working on increasing the local content in the Chetak in addition to reforming its supply chain network. These issues are expected to be resolved in the coming months, and the company is confident of extending the market coverage from current 2 cities to 24 cities by end of next fiscal.
Once the production constraints are sorted out and the Chetak settles into a rhythm in the domestic market, the company may look at exports. In Europe, the Bajaj Chetak could be positioned as a cheaper alternative to Vespa Elettrica. With the old continent taking fast strides in electric mobility domain, the Chetak seems like an attractive proposition. The retro classic styling is a big plus.
In addition to the Chetak, Bajaj’s electric scooter platform will also serve KTM and its subsidiary Husqvarna. A new production facility in Chakan is being readied for Bajaj’s electric vehicle push.
