Like cars from Germany and trucks from Sweden, the managing director of Bajaj Auto says motorcycles should be associated with India.
Yes, Bajaj Auto’s market share in India did dip from 24% to 18% recently while its rival Honda Motorcycle and Scooter India (HMSI) advanced in the race by a good gap (17% hike in sales volume). This, by many is blamed because of Bajaj stepping out of scooter business.
The company’s policy is to specialise in a niche segment rather than getting into price wars, and the shift has been causing blips in the charts ever since it took the business of low cost motorcycles lightly and left out the flourishing scooter segment. Bajaj says it does not intend to sell products at a lower price for gaining market share.
But, Goldman Sachs projects that Bajaj will face difficulty to grow to the top if it remains out of scooter segment, given their estimation of 24 percent growth in this class of two wheelers, against only 8 percent uptrend in motorcycles over the next few years.
Nonetheless, Bajaj Auto remains confident of doubling their business in five years, by targeting sales of 32,50,000 motorcycles and 4,50,000 commercial vehicles in FY 2020. Bajaj’s exports have doubled in the last five years, same enthusiasm is expected to sustain.
Rajiv Bajaj, Managing Director, Bajaj Auto Limited has stated that the company will not be branching off its business into the scooter segment. He stated that as on date the company is enjoying a certain amount of success in the motorcycle segment. Bajaj Auto currently commands a 10% global market share in the motorcycle segment with a target to increase the same to 30% over the next few years rather than to enter the scooter segment where in the company would have to start from scratch.
When asked by critics, that it is not different, the scooter business and motorcycle business, Mr Bajaj uses the analogy of why not ask Sachin Tendulkar to play baseball instead of cricket. Watch him talk abuot why Bajaj is not going to enter the scooter business in the video below.
Speaking about recent sales performance – Bajaj announced a 4% increase in sales for February 2017. The company total sales stood at 2.73 lakh units as against 2.72 lakh units sold in February 2016. Motorcycle sales were up 4% to 2.4 lakhs units while exports increased by 16% to 1.1 lakh units in the past month.
