Bajaj plans bike blitzkrieg riding ‘less-is-more’ mantra

Mumbai, June 20:   

 

Rajiv Bajaj swears by the ‘less-is-more’ mantra. His motorcycle business is testimony to this faith where two brands — Pulsar and Discover — have been the biggest growth engines for some years now.

The Managing Director of Bajaj Auto is now preparing for a blitzkrieg of launches this fiscal which will see six new Discovers (two of which will debut next month) and at least two Pulsars. Isn’t this a detour from the ‘less-is-more’ route? At least, this is what some industry observers believe is the case.

Just 2 categories

Bajaj disagrees with this view. “For our rivals, the brand name is the name of the product. In our case, it is the name of the category,” he says. The Pulsar, for instance, is in the sports category while the Discover is the commuter bike.

“Today, I have half-a-dozen Pulsars and am developing half-a-dozen more. However, they are within one category called sports and one brand called Pulsar,” Bajaj says.

The same holds true for the Discover, which is in the commuter category. All these bikes belong to the same family, with the same DNA. This does not mean, though, that all are necessarily successful.

Bajaj cites the example of German automaker BMW, which is one brand with a host of products, such as the 3, 5 and 7 series. Each of these epitomises the BMW brand of being the ultimate driving machine.

“Our competition develops products while Bajaj Auto develops platforms. As a result, development and manufacturing costs are coming down while at the front end, advertising costs are falling too,” the MD says. This is what has helped the company sustain its EBITDA (earnings before interest, tax, depreciation and amortisation) margins at 20 per cent for many years now.

The twin-brand focus has also helped the company stage a strong comeback in motorcycles just when it seemed it was losing its way back in 2008-09. At that time, it had an array of models in its portfolio which were not doing the trick in taking on (the then) market leader, Hero Honda.

Changed dynamics

However, the launch of the Discover 100, quickly followed by its 150cc sibling, put Bajaj Auto back on track in the commuter segment. More recently, the creation of new platforms is expected to take the growth story forward with additional volumes coming in from the Platina and Boxer.

The dynamics of the motorcycle segment have also changed with Hero and Honda parting ways which means the leadership stakes will become more intense in the coming years. Honda is now pulling out all the stops to counter the top-selling Splendor, which is in the hands of its former ally. 

Source: http://www.thehindubusinessline.com/companies/bajaj-plans-bike-blitzkrieg-riding-lessismore-mantra/article4834325.ece