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Even amid slowdown, Bajaj shuns discounts

Source : BUSINESS_STANDARD
Last Updated: Sat, Apr 12, 2014 19:31 hrs
Bajaj RE60

At a time when almost every automobile company is luring customers with a range of discounts and offers, Bajaj Auto, India's second-largest motorcycle manufacturer, has completely shun discounts. Despite facing strong headwinds from Honda, the Pune-based company, which sells 14 products under brands such as Pulsar, Discover, Platina and Avenger, has said it won't offer direct discounts to customer.

For the April 2013-February 2014 period, Bajaj Auto's motorcycle sales fell about 15 per cent. During this period, the company clocked 1.92 million in domestic sales, against 2.28 million reported in the year-ago period, according to data provided by the Society of Indian Automobile Manufacturers.



K Srinivas, president (motorcycle business), Bajaj Auto, said, "We are not offering even a paisa in discount on our bikes. Our wholesales look less because we have undertaken stock reduction of about 30,000 units, which started around November last year."

In the 110-125cc category, combined sales of the Platina and Discover models, which account for a quarter of the company's two-wheeler sales, nosedived 51 per cent.

Meanwhile, Honda Motorcycle and Scooter India (HMSI), which accounts for the second-highest domestic volumes, has reportedly increased its motorcycle inventory, anticipating higher demand for models such as CB Shine, Dream Neo and Dream Yuga.

In a circular to dealers, the company has said due to additional supplies from a new plant in Bangalore, dealer stocks have started piling up. Therefore, it advised them "to take utmost care during stocking to reduce the effects of deterioration from non-use of vehicles".

The Delhi-based company, which opened its third plant late last year, raising its total capacity to 4.6 million units, was offering gold coins on the CB Shine and Dream Neo motorcycle models. While the 125cc CB Shine is Honda's highest volume generator, the Dream Neo is a newly launched 110cc economy motorcycle.

Yadvinder Singh Guleria, vice-president (sales and marketing), HMSI, said, "In last one-two months, we have seen 30 per cent more enquiries in the South. Whenever the sentiment is down, people look for happy occasions. We felt it was the right time to capitalise fully on the mood and reward the buyers with a gold coin during Gudi padwa and Ugadi, which is celebrated in Andhra Pradesh, Karnataka and Maharashtra. We have introduced the third line in the Bangalore plant."

Eight motorcycles in HMSI's line-up contribute 47 per cent to the company's total sales; the rest is accounted for by automatic scooters. In 2013-14, motorcycle sales increased 37 per cent to 1.76 million units from 1.29 million in 2012-13.

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