Bajaj rides into Royal Enfield's turf with Dominar 400

Automobile companies mostly refrain from taking on the competition while launching a new product. However, Rajiv Bajaj is breaking the norm.

The managing director of two-wheeler major Bajaj Auto has positioned the company's new and 'best' product, Dominar 400, as a direct competitor to Royal Enfield motorcycles.

Launching the 373cc premium sports bike here, he said the company was entering a "segment that has an existing tall leader with 80% market share. This segment is not open for anyone to simply enter and walk away with the market", he added in a reference to Eicher Motor's Royal Enfield range.

Dominar has been introduced at an ex-showroom (Delhi) price of Rs 1,36,000, not very different from the Enfield range. "We cannot be far removed (in price) from the market leader," said Bajaj. Dominar has a top-end variant (with anti-lock braking), priced at Rs 1,50,000. Enfield's range begins at about Rs 1,09,000 and goes up to Rs 1,99,000. However, barring the Bullet 350 and Classic 350, all other products are priced above Rs 1,41,000.

The premium sports motorcycle segment (Rs 100,000-200,000) clocks a monthly domestic volume of 65,000-70,000 units. Bajaj said he expected the segment to reach 85,000 units a month next year.

Bajaj Auto's stock price closed at Rs 2,674.65 at the BSE, up almost one per cent from the previous day even as the bnchmark Sensex declined 0.3%. The stock of Eicher, which gets about 70% of its profits from Enfield, declined 1.4%.

Bajaj also happens to be the most valued two-wheeler company in the country, with market capitalisation of Rs 77,395 crore. Online bookings for the motorcycle commenced from Thursday and the Dominar will be sold through 80 showrooms in 22 cities.

"To sell volumes, you need to have a niche product. One has to be the opposite of what the market leader is," said Bajaj, positioning the Dominar as a powerful yet comfortable, large yet manoeuvrable, premium yet not out of reach, product for customers. Listing design, performance and price as three critical factors for any motorcycle, Bajaj said the Dominar would create a differentiation in all three.

"A better product can just satisfy a customer but does not lead to customer acquisition. It is only by creating differentiation in the form of an altogether new category that we can take away somebody else's customer and market," he said.

The company aims to sell at least 10,000 units a month in the domestic market, where deliveries will begin from next month. Exports (Bajaj is the country's largest two-wheeler exporter) could start from February and average 5,000 units initially. Rajiv Bajaj says he expects the Dominar to become a $1 billion brand in the next 12-18 months. Eicher sells close to 53,000 motorcycles a month and also ships over 1,000 units abroad.

Calling Siddhartha Lal, the managing director and chief executive officer of Eicher, a friend, Bajaj said if people want to go faster than the Enfield Bullet, they should try the Dominar.