Bajaj takes top-down route for 100cc bikes

Bajaj Auto, a leader in sporty motorcycles, now tries to implement that DNA into the 100cc segment with the all-new Discover 100T.

Autocar Pro News DeskBy Autocar Pro News Desk calendar 17 Jan 2013 Views icon6152 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Bajaj takes top-down route for 100cc bikes

Bajaj Auto, a leader in sporty motorcycles, now tries to implement that DNA into the 100cc segment with the all-new Discover 100T.

Bajaj Auto has tasted success right from the word go in the 150cc segment with its Pulsar brand. But it hasn’t managed to replicate that success in the extremely competitive 100cc segment, which forms the huge base of the Indian motorcycle market pyramid. After multiple attempts without significant sustainable success, this time Bajaj Auto has recently added a new product – Discover 100 T (T for touring), into the segment with a new approach.

The approach is intended to compete successfully against, among others, market leader Hero MotoCorp which led the two-wheeler market’s transition from scooters to motorcycles. “Often we see that the opposite succeeds. The CD 100 (from Hero Honda) was opposite to what the (Bajaj) Chetak was. It had nothing in common. Big wheels versus small wheels, four-stroke versus two-stroke, side engine versus mid-engine. The strategy of opposites is far more potent, especially if you want to sell profitably,” notes Rajiv Bajaj, managing director, Bajaj Auto.

Priced at Rs 50,500 (ex-showroom, Delhi), the Discover 100T’s price tag is five percent more than its key competitors – Hero’s Passion Pro (Rs 48,300) and Honda’s Dream Yuga (Rs 48,000). The company hopes to create a new segment, or the perception of a new segment with the new bike, which offers 30 percent more power than its peers and more technological features. The Discover 100T comes with a four-valve, twin spark engine, a five-speed gearbox and delivers 10.2 PS of power at 9000rpm. These features, along with the Discover brand name, are expected to help the 100T sell around 45,000 units a month.

In the entry level or ‘A’ segment dominated by Hero’s Splendor and Passion Pro, Bajaj Auto has a 20 percent market share. If the ‘A’ segment is further sliced into three, the Discover 100T will be the first Bajaj product in the top of that segment. The 100cc segment, according to Bajaj Auto, has shrunk from 73 percent of the total motorcycle market in 2006, to 65 percent now. However, in that same segment the more expensive 100cc bikes' share has gone up to 18 percent, from 12 percent, during the same period.

Bajaj Auto’s latest strategy may have been derived from the lessons it learnt in the entry level segment with some of its products earlier. For example, its CT 100 motorcycle, priced 20 percent cheaper than Hero’s offering in that segment was “enormously successful” in 2004. But it lost the game when Hero made a counter move 18 months later. The CT 100 achieved the initial success because it was only a similar product as its competitor, with a cheaper price tag. That strategy, Bajaj says, is not sustainable. “The strategy of opposites is far more potent, especially if you want to sell profitably,” notes Bajaj.

The Discover 100T is also expected to contribute to Bajaj Auto’s vision of being in the 20 percent margin zone, even if it falls in an extremely competitive segment. “While the 20 percent figure is not sacrosanct, what is sacrosanct is that you are much ahead of your competition, at least 4 to 5 basis points ahead, if not more. While this bike has lot more features in it and does add to the cost, when we price it at this kind of the price it’s also the margin that’s gone into it. Our philosophy is all products should contribute to the kitty in an almost equal manner,” says K Srinivas, president – motorcycle business, Bajaj Auto.

A sign of a market maturing is its segmentation. In the Indian motorcycle market, it is increasingly becoming so.

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