Falling market share and rising competition from other two wheeler majors, has caused Bajaj Auto Ltd to sit up and take a serious look at their scooter strategy.
Once a leader in the two wheeler industry, Bajaj Auto’s market share has been declining after their decision to exit the scooter segment in Dec 2009. At the time they decided to stop manufacturing scooter, so that they could concentrate on manufacturing motorcycles.
When Bajaj Auto quit scooter segment in 2009, they were the second largest two wheeler manufacturer (with 27% market share), first was Hero Honda (with 41% market share), which split a year later in December 2010. Third was TVS Motors with 18% market share.
Five years down the line, in 2014 the situation was such, Hero MotoCorp leads the lot with sales of 61 lakh two wheelers (41.2% market share), followed by HMSI (Honda Motorcycles and Scooters India), followed by TVS Motors, and then Bajaj Auto at about 21 lakh (14% market share).
Bajaj’s decline in market share is mainly attributed due to their decision to exit from scooter industry. For the period April 2014 to January 2015, scooter market has seen a marked increase of 27% to 3.74 million units, against motorcycle sales which saw just a 4% increase to 9.11 million during the same period. This stark increase is due to the huge rise in demand for automatic scooters. The best selling of the lot is Honda Activa, which registers about 2 lakh unit sales every month.
But, to their credit, Bajaj Auto has the export numbers, which have increased exponentially post their exit from the scooter industry. The company is the largest exporter of motorcycles in the country. Their exports for the same period, FY 2013/14, stood at 13.23 lakhs, which is 66.7% of the total motorcycle exports from India. Due to such high number of exports, the company has also managed to post record profits.
But, with the scooter market expected to grow faster than the motorcycle market, how long can Bajaj Auto avoid a re-entry? Well, it seems not very long. If we are to believe a new report, which claims that Bajaj Auto will launch their new scooter next year. Leaked now in patent sketches, the new Bajaj scooter will be a premium offering, which will rival the Vespa brand of scooters in India.
With prototype scooters already seen on test outside their facility in Pune, expect the scooter to be powered by a new engine, about 125-150cc. More details will be revealed soon.
Below is a collection of the iconic ‘Hamara Bajaj’ commercials evolving over the years.