New Delhi: Bajaj Auto is on the prowl for a greater grip on each, the home and export two-wheeler pie. Lined up for launch this fiscal are a wide range of two-wheelers throughout ICE and electrical segments: a world first CNG bike which may slash the gasoline bills of patrons by half, a mass market Chetak electrical scooter, and 6 new fashions of the Pulsar. In spite of everything, the corporate’s acknowledged goal is to proceed driving high line development with out diluting profitability.
This angle has reaped wealthy dividends for Bajaj. Within the just-concluded 2023-24, the corporate claims to have wrested eight proportion level share from the market chief within the higher finish of the 125 cc phase. Rakesh Sharma, Government Director, stated that within the March quarter of 2024, home bike retail grew “twice the speed of others, and within the 125cc plus phase, our retail grew 4 instances that of others”. Since three-fourth of Bajaj’s topline comes from the 125 cc bike phase, features listed below are crucial to each, topline development and profitability.
Sharma stated that “our market share within the higher half (of 125 cc) now stands at 27%, a achieve of 5% and simply 2 proportion factors away from management. Firstly of the 12 months, we have been 10% factors behind the chief. So, we have closed the hole by 8 proportion factors. That is the end result of a slew of focused new launches, 9 of them in FY24, spanning the 125cc to 250cc class, which suggests now we have a proposition for all segments of consumers – commuter-oriented, type impressed, or excessive performance-led prospects throughout all demographics.”
Pulsar alone has develop into a INR 10,000-crore model, Sharma stated, and the “largest” Pulsar but is being launched in Might this 12 months. The corporate has already introduced a capex of INR 700-800 crore this fiscal, primarily for increasing three wheeler manufacturing and a few funding in electrical autos below the Chetak model.
All in all, in FY24, the corporate claims to be the most important participant within the mass market 125 cc bike phase and three-wheelers and third within the electrical two-wheeler pecking order.
CNG bike
Bajaj Auto will unveil what it calls a “world first” CNG bike this summer season, which can doubtless halve the gasoline price for commuters. The bike has been lengthy within the making, with analysis round a CNG-petrol twin gasoline bike happening for a few years. Sharma stated that the market measurement for “mileage aware” customers was over six lakh models monthly and about two -thirds of this market has entry to the CNG infrastructure. Bajaj is not any stranger to CNG autos because it claims practically 90% share of the home CNG three-wheeler market already. And as for overlap of the ambitions between a rising electrical car market share by way of Chetak versus the brand new CNG bike, Sharma stated that a minimum of for three-wheelers, the differential in expense for each the variations was not very vital. If the identical argument have been to be prolonged to bikes, maybe the electrical and CNG-petrol bikes wouldn’t cannibalise one another.
Chetak Expertise
In one more sensible transfer, Bajaj Auto has vested nearly all R&D obligations of the group in Chetak Expertise, a wholly-owned subsidiary. Earlier this week, firm veteran Abraham Joseph was appointed because the MD of this subsidiary. Joseph has been with Bajaj Auto for three-and-a-half a long time. Not solely will Chetak Expertise be accountable for R&D for all sorts of merchandise, it’s going to additionally discover hydrogen autos. So, going into the longer term, Bajaj desires a share of ICE, electrical, CNG and hydrogen two and three-wheelers.
EV biz enlargement
The EV trajectory of Bajaj has gone only one method: Up. Within the March quarter, gross sales of its electrical scooter Chetak logged 40,000 models. This was greater than the variety of Chetak scooters the corporate offered in the whole earlier fiscal. In Fy24, Bajaj’s share of the electrical two-wheeler market greater than doubled to 13% from 5% within the earlier fiscal. Now, as a mass market and extra reasonably priced Chetak is on the anvil, Bajaj might have a troublesome battle on its arms.
Ather has simply introduced Rizta, the household scooter, and different rivals are additionally gearing up for launching extra pocket pleasant electrical scooters. What’s going to work in Bajaj’s favour vis-a-vis pure electrical corporations like Ola, Ather and others is the previous’s current huge distribution and gross sales community. Bajaj is already increasing its electrical car distribution footprint additional. Additionally, Bajaj has the choice to scale up manufacturing in case of a requirement bump with versatile manufacturing traces.
The difficulty Bajaj has been dealing with – certainly all electrical two-wheeler makers have been dealing with – is the drag the EV enterprise brings on the margins since it’s nonetheless not worthwhile on the unit stage. Sharma stated that this had extra to do with the pricing of Chetak – with stiff competitors and coverage uncertainty, latest worth cuts throughout the trade haven’t helped issues – in comparison with the general price discount at Bajaj Auto. Will this skewed math enhance after the corporate unveils the mass market Chetak? Solely an extra, steep improve in gross sales numbers of Chetak will reduce the drag on Bajaj Auto’s general margins and profitability.
