Bajaj Auto hopes to rev up its domestic sales with V15, Pulsar 400

PUNE: Pune-based motorcycle maker, Bajaj Auto is pinning its hopes on the newly launched V15 and the yet-to-be-launched Pulsar 400 to drive its domestic growth over the next few quarters.

The 150cc V15 is positioned in the commuter cum entry level sports/ performance segment, where the motorcycle maker has failed to capture the imagination of the masses, of late. The company has only a market share of 5% in this segment compared to its overall domestic motorcycle market share of 19%.

"In the value segment, our market share is quite low. V15 is the single biggest opportunity for us to better our share in the value segment. We will launch a new SKU from same platform over the next 18 months at a gap of every six months," said Rajiv Bajaj, Managing Director, Bajaj Auto Limited.

The company has been buoyed by the initial response for V15, which seemed to have struck an emotional chord with the masses. The company says that its fuel tank assembly contains metal from India's flagship aircraft carrier, INS Vikrant (now decommissioned and broken down).

Rajeev said that the company has sold more than 1 lakh units of V15 since its launch. Domestic sales of motorcycles for Bajaj Auto turned the corner in the last financial year, after three successive years of progressive decline. FY 2016's domestic sales of about 1.9 million motorcycles, though higher than the previous year, was however lower than FY 2012's domestic sales of over 2.5 million motorcycles.

Also in the first quarter of the FY 2017 that ended June 2016, the company sold over half a million motorcycles within India, 13% higher than the same year ago period. However, its overall growth was dragged down by weak demand in Nigeria and Egypt. Over the quarter ended June 2015, the company's motorcycles exports plunged 17%.

Given the global uncertainties like lower oil prices, Bajaj Auto is hoping to improve its domestic market share to compensate for the likely loss from the exports market.

The company will also soon be launching the premium motorcycle Pulsar 400, which Rajeev believes will have the same "revolutionary" effect that Pulsar 150 and 180 cc motorcycles ushered in for the company in 2001.

"We believe it will disrupt the market," he said addressing the annual shareholders' gathering in Pune on Wednesday.

In terms of exports, Rajeev indicated that the company will look at the south east Asian markets, where the company sees an opportunity to sell a million motorcycles every year.

However, the company has no plans to re-enter the scooter market where much of the two-wheeler growth in urban areas is coming from. "We don't have any plans to re enter the scooter segment. Monthly domestic motorcycle market is 8-9 lakh units per month. Bajaj does some 1.5 lakh motorcycles per month. So there is a potential to address the remaining 7 lakh market. Scooter market is 4,00,000 per month and so it is logical for us to chase the motorcycle market than the scooter market," he added.

On a standalone basis, the company posted a net profit of Rs 978 crore in the three month's ended June 2016 crore against Rs 957 crore, a year ago.

Bajaj Auto's cash position improved further to Rs 10,701 crore end June 2016 against Rs 9,085 crore at end March 2016. Despite this the company did not announce any dividends or bonus, a move that disappointed a section of investors.

Source: Bajaj Auto hopes to rev up its domestic sales with V15, Pulsar 400