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| Bajaj Auto: In search of a winner |
| Shobhana Subramanian / Mumbai Jun 24, 2009, 00:37 IST |
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Bajaj Auto has launched a new variant of the Pulsar 220 at a price of approximately Rs 70,000, ex-showroom at the premium end. The Pune-based firm has, for a long time, had a strong market presence in the premium segment though, of late, the competition has increased resulting in the Pulsar giving up some market share.
 While the premium segment is a profitable space to be in, it accounts for just about 10-12 per cent of the motorcycle market. So, even if Bajaj Auto is the market leader, it cannot sell meaningful volumes. For that to happen, it must do well in the executive segment.
The XCD 135cc has done well and the company has clocked reasonably good volumes in the first two months of 2009-10, after a disappointing 2008-09. A new launch in the executive space is scheduled for July.
Having decided not to play the entry segment (100cc) because of its low profitability, it's important that Bajaj Auto gets a grip on the executive segment. Industry watchers say this segment would account for a third of the market, compared with around 28-29 per cent at present. Since the start of the year, the stock has outperformed the benchmark indices by a huge margin though it has corrected somewhat from 1,133 earlier this month to Rs 939 currently. At this price, it trades at just over 14 times estimated 2009-10 earnings.
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