Leading two-wheeler maker Bajaj Auto has indicated that it will remain focussed on the higher cc bike segment due to better traction amid some recovery in the entry/commuter segment.
While the 110cc entry/commuter bike segment has seen a sharp fall, particularly in the rural areas, the 125cc and above segment of bikes has been registering growth in volumes.
Key driver
Bajaj’s bike volumes in the 110cc and below category declined to 350,261 units during H1 of this fiscal as against 414,021 units in the year-ago period. But in the 111-125 cc category, its volumes grew to 344,789 units (222,583) helped by new 125cc bike launches. The company has also grown sales and share in a few other higher cc categories.
“Since FY20, the motorcycle industry has reshaped itself towards 125cc plus segment and now constitutes about 50 per cent of the bike market, up from 40-42 per cent 2-3 years ago. For Bajaj Auto, about 60 per cent of our portfolio was in the 125cc plus segment in the September 2022 quarter as compared to 46 per cent in FY20. This is the key driver for improved profitability,” Rakesh Sharma, Executive Director, Bajaj Auto Ltd, told during the company’s Q2 FY23 earnings call.
To drive volumes in the 125cc plus segment, the company launched two new bikes in Q2 and they include an all-black N160 and CT125. Also, Pulsar 125 refresh is being launched as the new Pulsar platform appeared to have received well among the buyers. Combined with a better supply situation, the new product launches have helped the company secure market share across the country now, he added.
The CT125 was launched as an entry bike in its segment with a differentiated positioning. Retails of CT125 has been showing week-on-week growth.
The new Pulsar platform will be expanded further in the coming quarter. With that, the entire Pulsar portfolio will completely and substantially be upgraded. “We will continue to direct our innovation and energy towards 125cc plus segment that appears to be enjoying tailwinds and growing faster than the overall industry. This will also help us improve both the profitability of the domestic motorcycle business and the market share,” said Sharma.
The roadmap
On festival demand, he said: “It has been a big up and down so far. But overall, we expect the industry to report a single-digit growth and we expect to be in line with the industry. However, the growth will be higher in the 125cc plus segment.”
Bajaj Auto is planning to strengthen its electric two-wheeler portfolio with 3-4 launches in the next couple of years. Its electric scooter Chetak sold about 10,000 units in Q2 and the company hopes to touch a monthly sales volume of about 6,000 units.