Bajaj Auto kicks off a premium segment in entry-level bikes

Bajaj Auto, India’s second-largest bike manufacturer, today stepped up competition in the 100-cc motorcycle market, launching the Discover 100T, a premium bike that provides more power and mileage compared to other bikes in the segment.

Powered by a 100-cc, four-valve DTS-I engine, the new motorcycle generates 10.2 PS power, 30 per cent more than other 100-cc bikes. It has a five-speed gearbox and a top speed of 100 km/hour and gives mileage of 87 km/l, higher than other bikes in the segment.

At Rs 50,500 (ex-showroom, Delhi), the Discover 100T would be the most expensive in its category. However, the company is confident entry-level customers seeking an affordable option would consider the Discover 100T.

With its Splendor and Passion models, Hero MotoCorp (formerly Hero Honda) dominates the 100-cc segment. Bajaj hopes to sell 40,000-45,000 units of the Discover 100T a month, a market share of 30-32 per cent. The company also has the Discover 125ST (priced a tad higher than Rs 55,000), the sales of which stand at about 40,000 units a month.

Bajaj says the A segment, comprising all entry-level bikes and those up to 125 cc, accounts for sales of 5,50,000-6,00,000 a month. This segment has three sub-segments. The A1 and A2 segments, accounting for models such as the Bajaj Platina, the Hero Splendor, the HF Dawn, the Bajaj Discover 100 and the Suzuki Hayate, is recording a fall in demand, with several customers moving to the higher end of the segment. The A3 segment, in which the Discover 100T is positioned, accounts for 18 per cent of the market; four years earlier, it accounted for only 12 per cent. This segment includes Honda’s Dream Yuga and Twister and the Hero Passion. The prices of bikes in A1 and A2 categories stand at Rs 36,000-Rs 44,000; A3 segment bikes are priced higher.

The mass market motorcycle segment contributes about 65 per cent to the total market, the executive segment (125 cc-150 cc) 19 per cent and the premium segment (150 cc or more) 16 per cent. With an eye on earnings before interest, tax, depreciation and amortisation of 20 per cent, the company spent only Rs 5-6 crore on developing the Discover 100T, as most vehicle parts are shared with the Discover 125ST. It had spent Rs 25-30 crore on the platform.

Managing Director Rajiv Bajaj said, “We are a very conservative company, in terms of our strategy. We design platforms, we don’t design products. So, we designed the platform of the Discover 125ST such that the Discover 100T could be made on the same line. I did say there would be many more products on this platform.” Using this platform, the company plans to roll out several derivatives, including a higher-powered Discover later this year. The premium-class Pulsar is scheduled to be launched in the coming months.

The company said it was operating at 80 per cent of its total capacity of 4,00,000 a month from its three plants. If demand increases, it might set up another plant.