A file photo of Rajiv Bajaj, MD of Bajaj Auto
Most domestic two-wheeler manufacturers registered double-digit growth in sales in April 2014, with market leader Hero MotoCorp reporting its highest ever non-festive monthly sales. Unlisted Honda Motorcycle and Scooter India (HMSI) said sales jumped 21 per cent year-on-year, while TVS Motor recorded a 15 per cent growth in sales during April.
The exception is Bajaj Auto, which reported a marginal decline in April sales. Bajaj Auto's motorcycles sales in April declined to 2.9 lakh units as compared to 3 lakh units in the corresponding month last year. Nearly half of the April sales came from exports.
Clearly, the new financial year has not started well for Bajaj Auto, which has been steadily losing its market share in the domestic two-wheeler segment to its rivals. According to SIAM data, Bajaj Auto's domestic market share has come down from 19.1 per cent 2011-12 to 14.2 per cent in 2013-14.
Analysts have attributed the declining sales to an onslaught by Japanese major HMSI, which has gained market share at the cost of both Bajaj Auto and Hero. According to domestic brokerage Nirmal Bang, HMSI has gained 9 per cent market share over the last two years, while Bajaj has lost 5 per cent during the same period.
Bajaj continues to be the dominant player in the premium motorcycle segment, but has been unable to break into the economy and executive segment, where Hero is the undisputed leader.
Bajaj Auto's managing director Rajiv Bajaj told NDTV that the de-growth witnessed last year was on account of transition in Discover models. Going forward, he expects, the new Discover models, particularly the 125M model, would rev up sales growth. According to Mr Bajaj, the 125M model is selling three times the number of its previous model. In April, of all the Discovers, close to 70 per cent of the sales were from the new platform, he added. (Watch video)
Bajaj Auto had recently launched two new Discover models, 100M and 125M, to challenge Hero and HMSI.
The Discover 125 is positioned as an alternative to the 100 cc bikes: "not just mileage but more power and more features." he said.
He expects incremental growth and market share coming in from the June.
However, Deutsche Bank today came out with a sell call on Hero, Bajaj Auto and TVS Motor, citing falling margins amid increased competition. The investment bank expects Hero and Bajaj to lose market share by 1.1-2 per cent over the next 12 months.
RESULT
According to MD Rajiv Bajaj, the 125M model is selling three times the number of its previous model. In April, of all the Discovers, close to 70 per cent
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