Bajaj and KTM to launch bikes up to 700 cc in India

Bajaj Auto Limited India’s second largest two wheeler maker has plans to launch bikes up to 700 cc in India.The bikes up to 700 cc may not be from Bajaj but from the Austrian company KTM who are well known for their naked endurance bikes all over the world.Bajaj auto Limited has a 40 % percent stake in KTM.These bikes will be cold through KTM stores in India previously Pro biking showrooms.In India we have imported sports bikes with  displacement starting from 600 cc to 1000 cc bikes from the likes of Ducati,Honda,Yamaha and Suzuki on sale for a price tag which only some can afford.The high price of this bikes can be attributed directly to the point that these companies do not manufacture the high end bikes in India they manufacture the bikes somewhere else and Import them to India in completely built Unit (CBU).In India we have a 100 % import tax on a CBU vehicle whether it may be a car or a motorcycle.So that makes the price of this high displacement bikes go up towards the stars.So whats special in Bajaj making the news with their plans for launching bikes up to 700 cc ? The main thing that excites bike lovers in India is the fact that KTM bikes will be manufactured in India by Bajaj so no import duties which double the cost of the bikes.This can be seen with the launch of KTM Duke 200 which is manufactured at Bajaj Chakan plant was launched at an impressive price tag of rupees 1,17,000 .The CBR 250R  was brought into India in Completely Knocked Down (CKD) on which only 10 % import duty is imposed.The Ninja 250R which brought change in the auto market which is also a CKD was  priced highly  at rupees  2,69,ooo but sold well in the Indian market which made Honda launch their CBR 250R at a price less than 40 % of the Ninja 250R.The excess pricing of the Ninja 250R when compared to CBR 250R in India (although they are priced nearly the same all over the world) may be justified that the Ninja has a two-cylinder engine where as the Honda has one and the Ninja has more styling and road presence than the CBR.This shows that Indians have love for exotic bikes which may be over priced when compared to other bikes with same displacement.Take for instance the R15 which is not in any way over priced but when compared to a Pulsar 220 cc bike it losses in power output and torque although comparing an 150 cc bike to a 220 cc bike does not show the clear picture the price of the R15 is rupees 1,08,000 when compared with other 150 cc bikes it is very high.But also the R15 managed to be sold in large number because of its looks and racing ability combined with handling.The R15 price is justified by the fact it is made for racing which gave the Indians a pure taste of racing.The R15 is built in India.This again shows that Indians love bigger displacement bikes and sporty bikes but until it fits their pocket they are willing to spend.

Kawasaki Ninja 250R

Ninja 250R may be over priced but fits the buying capability of many and now the newly launched Kawasaki Ninja 650R is priced aggressively at rupees 4,50,000 on road while the Ninja 250R costs rupee 3,08,000 the general mind set of an Indian tends to think like we get an additional 400 cc and an increased power output of up to 40 hp so i would try to increase my budget to get the Ninja 650R .The pricing strategy between the Ninja 250R and 650R will definitely make some of those who want to buy a Ninja 250R Incline towards the higher displacement Ninja 650R which is a true value for money.One may ask why the Ninja 650R is priced less when compared to Ninja 250R which because the Ninja 250R is sports bike which features super sport body work and styling.while the Ninja 650R is a sports tourer bike.Although both the bikes fall in the same category the 250R is more sporty than the 650R.There is also Ninja ZX-6R which is super sport and has a price tag more than that of the Ninja 650R.So the Kawasaki strategy of a 650 cc tourer and a sporty 600 cc bike yielded them a nice market share in India.while the Yamaha R6 which is to be released before the end of 2012.The R6 is a CBU and expected to coast around rs 9 lakhs the R6 is a direct competitor to ZX-6R.So the reason why Kawasaki

Kawasaki Ninja 650R

Launched the 650R is clear they want to offer the true value for money and they know the pulse of the Indians.

So coming back to the story of the Bajaj bikes to be released up to 700 cc which are going to be manufactured in India by Bajaj will be definitely priced competitively against the competitors offering even if the manufacturers started producing them in India as was the case seen with Yamaha R15 against other Indian bikes.The recent launch of the Pulsar 200 NS with a 23 horsepower and 200 cc engine which is to be priced below one lakh ex showroom price with all the most lovable features we see on Japanese bikes like the Mono shock suspension and use of swing arms and other features.There are also rumours floating around the Internet about the possible launch of a 250 cc pulsar and a 320 or 350 cc naked bike in 2013 by Bajaj.Bajaj also plans to sell their bikes in Europe with their partnership with KTM.Europe is a place where people mostly love expensive and powerful bikes with styling and looks.So one can definitely expect the new motorbikes which are going to join the Bajaj family would be of high quality and match international standards with the assistance Bajaj receives from KTM.

Aggressiveness of Bajaj 

Back in 1980 Bajaj Auto was once the number one two wheeler manufacturer in India at that time Bajaj scooters were leading the roads which are two stroke and not fuel efficient.Then at the time Hero Cycles in partnership with Japanese motorbike manufacturer Honda had joined hands and introduced four stroke motorcycle like CD Dawn under the brand name Hero Honda with aggressive advertising campaigns one of those advertising campaigns include the notion fill it shut it go.At that time Bajaj was not capable of meeting the customer demand supply for their scooters a six month waiting period was six months then the black market got demand which increased the price of the scooters.The inefficiency of mileage and long waiting period and aggresive advertising by Hero Honda made Bajaj loose the throne.Later Bajaj scooter lost their charm because of low mileage and other concerns surrounding a two stroke engine and the scooters are not so rider friendly.Bajaj sales figures fell dramatically.At that pint Bajaj auto needed resurrection and the resurrection was done by Rajiv Bajaj who formed a strond Registry and Development team for Bajaj the team developed pulsar in 2002 which made the company sales increase in the 150 cc category and reach second place in India.Till today Hero moto corp after the Hero and Honda split up Hero Honda was changed to Hero Moto Corp is in the number one spot.Bajaj want to regain its throne from Hero moto corp one of the mot respectful motorcycle brand in India.Recently Bajaj Discover 125 cc advertisement is based against the likes of Hero moto corp’s bikes between 100 and 125 cc class.Where Hero has the most share in Indian market.In the advertisement one can find people saying that they have settled for a bike which will run but will not run like a Bajaj Discover and make the person watching it feel the Discover is superior to to other 125 cc bikes.

Another TV commercial in which Bajaj shows some Japanese people saying Hunto.Hunto means un believable.they say Hunto because they are astonished by the fact that Bajaj sells more than 5 times than any other Japaneses motorcycle manufacturers in 150 cc category.

From these TV commercials it is clear that Bajaj is not only targeting Hero but also Japanese bike makers Honda,Yamaha and Suzuki.But Bajaj has a long way to go before it reaches the number one spot.S

So what makes Bajaj sit in the second position ? and what the y probably coulf fo to gain the first position?

The Indian market may be looking for higher displacement bikes but not every one is looking for a higher displacement bikes there is still a huge market in the lower displacement range in between the 100 and 125 cc clas.Although Bajaj has a strong market share in 150 cc segment they need to increase their presence in the 100 to 125 cc class bikes.they had achieved some success with discover but needs to make a more significant impact on the motorbiking scene.What people still today believe is the reliability Hero motorcycles.Bajaj bikes between 100 and 125 cc are priced far less than Hero bikes and offer mileage superior to Hero bikes but they lack reliability the lack of reliability makes their motorcycle value go down in second hand market this lack of reliability had costed Bajaj auto sales in the lower displacement bikes.So they must concentrate on the reliability and increase the bikes second hand value which could increase the customers.

Bajaj and KTM duo Advantages over other Manufacturers in India

What advantage does Bajaj and KTM have in higher displacement bikes.There are many advantages we discuss them in detail

Servicing Advantage:

Bajaj had  turned pro-biking showrooms into KTM stores.Which have a network of 40 stores across the country which specialize in  servicing of high displacement sports bike like Ninja 250R and 650R.32 stores will be set up for selling these bikes.Bajaj had said that they would increase KTM stores by 34 new stores making a total of 66 stores.So if other manufacturers want to compete with KTM stores they need to plan a new strategy they cannot make higher displacement bikes to be sold by the side of small displacement bikes.A owner who want to buy a higher displacement bike first looks on to the number of service centers and the brand value.If these bikes are sold by side of small 100 cc displacement bikes it reduces the brand value of the bike.So other manufacturers cannot take the risk of making their Indian showrooms and service centers turn into specialized sales and servicing for higher displacement bikes.They need to create separate showrooms and endorse them which involves lot of money which may make them to increase the price of vehicles  or cut in profits.

Strategy:

KTM Duke 200

The strategy of these KTM and Bajaj Duo is sure to be appreciated because manufacturers like Honda doesn’t have bikes in between 250 cc and 600 cc and after the 600 cc one has to move to 1000 cc bikes.Bajaj plans to create a some new bike classes to reach more potential customers.

Bajaj in partnership with KTM may launch four to five bike starting from 200 cc to 700 cc making more options available to the buyer.KTM had also priced the recently launched KTM Duke 200 which produces 25 bhp at a very aggressive price of rupees 1.17 lakhs Ex showroom.This 200 cc offering from KTM shows the power and the value for money nature of these bikes.These in turn create brand awareness and increase potential buyers of the brand.The decision to produce the bikes in India cuts the costs of the bikes by a huge margin if planned properly.

Pricing:

Pulsar 200 NS

How many times have you heard that Ducati,MV Agusta produce 1000 cc and more displacment bikes which are exotic sports bikesthey have stylish looks and a very high price tag which make them rare and prestigeous to own  than other 1000 cc bikes like CBR and R1.But the bikes from Ducati and MV  Agusta might be looking and powerful but that does not translate well into huge sales.You may ask the reason why? It is because why would every one dream to buy a bike which is pricey and have relatively equal technology may be a bit less but can reach the same  top speed and offer the best package for city and highway riding and produce equal amounts of power and needs more maintenance.But many would dream about buying those exotic bikes but they are not in their price range so they settle for other small bikes.Ducati realized this and launched Ducati 795 in India and emerging markets to get buyers attracted to Ducati.

So one would wonder why i made this huge explanation about bike pricing in the above paragraph the reason is if Japanese motorcycle manufacturers who are importing bikes from some where else in the world would need to plan to produce the bikes in India or atleast bring them in CKD form to reduce the price.Other wise the Japanese bikes will become like the exotic sports bikes who have more fans and less sales.

Verdict:

All in all Bajaj is heating up the competition of sports bikes in India.The heated competition can ensure that other Motorbike manufacturers rethink their pricing and import strategy.In the coming years automakers especially from Japan had to switch to CKD form or build the bike completely in India to reduce the costs and be competitive.And another plus point for Indians with these companies starting their production plants in India is increasing in Employment.In either way Bajaj is Distinctly ahead of their competitors.

Related Posts:

1.Hero Moto corp future

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s