Bajaj Auto bullish on XCD bike to extend the facility in Pantnagar end of this year. See the news below.
Murali Gopalan | Friday, 05 October , 2007, 08:41
Mumbai: Bajaj Auto’s recently launched 125cc XCD motorcycle has managed to attract a considerable number of new customers who would have otherwise bought competing models.
The bike could also eat into its basic version of the 135cc Discover (about 15 per cent), which is slightly dearer at Rs 46,000. Production of the 110cc version has practically stopped.
“Our initial feedback from the market shows that nearly 55 per cent of buyers for the XCD are those who would have typically opted for competitors’ bikes,” S Sridhar, CEO of the company’s two-wheeler business, told DNA Money.
The XCD is part of the buoyant executive segment, which includes Hero Honda’s hugely successful Splendor and Passion. Together, they account for sales of over 1.5 lakh units each month.
Both are 100cc bikes and will now have to reckon with the more powerful XCD at nearly the same price of Rs 41,000 (ex-showroom).
A spokesperson for Hero Honda said it was not the company’s policy to comment on competition, while reiterating that it had a clear multi-focal strategy spanning across segments.
“We have grown faster than the industry every month since January this year. As a result, our market share in motorcycles has crossed 50 per cent and we have been steadily consolidating this leadership position,” he added.
Hero Honda reported sales of over 3 lakh bikes in September. This reflects the vice-like grip it has on the motorcycle market. It is this stranglehold in the 100cc segment that Bajaj is striving to break with the XCD.
The bike was launched a little over three weeks ago and reported sales of nearly 19,000 units in September. The company has now embarked upon the challenging task of selling 50,000 bikes this month. This is the festive season where sales are generally buoyant with a host of freebies, though Sridhar reiterated that Bajaj was going to steer clear of the discounts game.
According to him, the bigger task on hand was to sustain the levels of 50,000 units for the coming months.
“It is possibly for the first time that such high targets have been set for a new bike in the executive segment. We are, however, confident of meeting this objective,” he said.
Towards the end of this calendar, Bajaj plans to shift a part of the production line for the XCD from Waluj in Aurangabad to its new facility at Pantnagar, Uttarakhand.
The idea is to benefit from the generous fiscal sops, which have been offered to companies setting up new units in this region. This plant is already home to the 100cc Platina, which could eventually lose its relevance as the XCD gains ground.
If the XCD does succeed in its objective of attracting more customers from competition (essentially the Splendor and Passion), there could be some interesting times ahead in the executive segment.
Sridhar said that the initial commercial for the XCD featuring its engine had worked wonders. The animation campaign featuring the bike kicked off a fortnight ago and is also doing well, he added.
“Customers are kicked by the fact that a bike with an electric start and delivering over 100 kmpl costs only Rs 41,000. We are confident that monthly demand for the XCD will increase to 75,000 units in the coming months and only need to ensure that production and delivery schedules cope with this demand,” he said.
Sridhar said that the most significant aspect of the XCD was that even at a price point of Rs 41,000, it was slated to make the kind of profits seen with the Pulsar and Discover.
“It is a tribute to the levels of cost-efficiencies we have achieved in the plant,” he added
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