Avenger powers Bajaj share in premium pie

Bajaj Auto’s share in the premium bike segment was around 43 per cent at the beginning of this fiscal. Today, the company is hopeful that December sales, which will be public in a week from now, will propel its share to nearly 60 per cent.

The reason for this whopping jump can be attributed to the heady market response to the recently launched Avenger which is clocking 25,000 units a month. In the process, it has fuelled sales in the premium category with its well established sibling, Pulsar, averaging twice as much.

Between the two, 75,000 units is the kind of tally which will put Bajaj Auto comfortably ahead of competitive models from the stables of TVS Motor, Hero, Honda and Yamaha. The list includes motorcycles over 150 cc and costing under Rs 1-lakh which therefore omits the range from Royal Enfield, KTM and Harley Davidson.

“The Pulsar has a sharp and sporty image while the Avenger is more of an easy ride bike which is in line with our faith in the world of opposites. Simply put, one is ride hard and the other is ride easy,” says Rajiv Bajaj, Managing Director.

What has been especially encouraging from the company’s point of view that there has not been any “significant cannibalisation” of the Pulsar 150 even with the entry of the Avenger Street 150. This only reinforces the fact that each of these bikes appeal to a separate category of riders.

“With the Avenger, one does not have to opt for an intimidating machine like the Pulsar,” adds Bajaj. In the not-so-distant past, when Avenger sales were barely 4,000 units a month, it was clear from market feedback that customers were opting for 125cc bike options or scooters instead. Perhaps, there were concerns about mileage and parental concern for kids riding such a powerful bike.

The tide is now changing in favour of the premium category where the Avenger has been the chief catalyst in sales. This can be supported by data where premium bike sales fell by 10 per cent in the first quarter of this fiscal and down to 8 per cent in Q2. However, Q3 saw an astonishing revival at 7 per cent thanks to the Avenger.

While this is more than welcome news, the company is still being cautiously optimistic. “Maybe this market share number will grow further though it could even fall in line with demand. It is tough to predict what will happen but the initial response has been encouraging,” says Bajaj. The challenge now is to ensure that the momentum continues. The Avenger was launched a decade ago but only had a single 220 cc option to offer which perhaps explains its tepid showing over the years.

Of the three options that were recently launched, the Street 150 accounts for nearly 40 per cent of total sales which translates into 10,000 units each month. The Street 220 and Cruise 220 make up the balance though this ratio could change going forward.

What is significant is that the Street 150, as a completely new alternative, has grown rapidly in just two months from a zero base to nearly 10,000 bikes today. It clearly reflects a fast growing customer category which would otherwise have opted for more expensive cruisers or alternatives in the 125cc space. “I am sure that the sales percentage of the Avenger 150cc option will increase in the coming months,” says Bajaj.

The success of the two-brand approach across user segments is clearly paying off for the company. Bajaj first tried this out in the entry space with the Platina and CT 100 which are now averaging about 75,000 units combined sales.

In the process, this strategy has confirmed what Rajiv Bajaj has maintained: opposites can do the trick in a mature market. The Platina and CT 100 strive to achieve what the Pulsar and Avenger do in terms of being contrarian and, yet, reaching out to two different kinds of buyers.

Bajaj will now be hoping for an encore in the more competitive executive (or value) segment where Hero MotoCorp is the leader with its Splendor and Passion brands. Over the next three months, the company will launch an all-new brand in this super competitive space to pull something off which its Discover could not. It will be an interesting tug-of-war for sure.