Bajaj Targets Motorcycles, To Renew Kawasaki Pact

As part of a strategy to project itself as a motorcycle manufacturer, Bajaj Auto plans to renew its technical tie-up with Kawasaki of Japan. The two-wheeler major will also introduce a slew of motorcycles and embark on a promotion drive to change the consumer mind-set.

Bajaj Auto will also enter a marketing pact with Kawasaki to sell its products in the overseas markets.

The Kawasaki managing director, with a top team of officials, is scheduled to visit India in May to sign the new agreement with Bajaj Auto.

We are perceived more as a scooter manufacturer than a motorcycle producer but our new plans will change this mind-set, said Rajiv Bajaj, vice president (products) of Bajaj Auto.

 

The new gameplan involves increasing the promotional budget substantially in the 1998-99 fiscal. The budget for 1997-98 is at Rs 50 crore. Bajaj refused to disclose the exact figure that the company plans to allocate for the product promotion on the ground that it will alert the competitors. It is big money, he said, adding that his father and chairman and managing director of the company Rahul Bajaj is yet to decide on the figure.

Besides advertising, Bajaj Auto plans to invest heavily in setting up state-of-the-art centres in 15 major cities of the country. These centres will focus only on bringing awareness amongst Bajajs potential customers and will not undertake sales.

They will display the Kawasaki-Bajaj motorcycle products and educate customers on the existing products and the new ones in the pipeline.

Our first objective is to build an image as a strong motorcycle manufacturer and leverage the Kawasaki brand, Bajaj said about the new gameplan. Once the image is built-up, the numbers (sales) game is easy to achieve, he felt.

With the new strategy in place, Bajaj hopes to achieve a 25 per cent growth in sales in 1998-99 over the previous fiscal.

Bajaj admitted that sales will be down in the current year compared to the previous year. The sales of Bajaj Auto are expected to drop from 14.20 lakh vehicles in 1996-97 to 13.50 lakh vehicles in the current year, he said. However, sales are projected to shoot up in 1998-99 and the company has projected total sales of 16 lakh vehicles.

Although the company has witnessed a rise in sales in the December 1997 and January 1998 for its motorcycles, scooter sales continue to suffer as consumer preference has shifted towards motorcycles and the competition has heated up.

The challenge of the rapidly maturing consumer looking for feel-good and better products with lower emissions, Bajaj says, will be met by the new styling of products and 4-stroke powered vehicles on the launch pad.

Cars from Chakan unit by March 99

Bajaj Autos new manufacturing facility at Chakan (near Pune) will roll out its first vehicles by March 1999. The plant is being set-up at a cost of Rs 300 crore. The company has already purchased 200 acres of land for the project and the construction is scheduled to begin next month.

The Chakan facility will have a capacity to produce five lakh vehicles per annum. The Chakan facility will mainly produce the new modern vehicles of the company.

In 1998-99, the company hopes to complete the launch of all its new products including three autorickshaws and 14 two-wheelers.