Of late, Bajaj Auto has seen some of its worst days ever! But will new launches alone prove the gracious saviour?

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Bajaj has hit the jackpot in the Indian automotive market, during the past with its ultra-successful Pulsar. Also true is the fact that it has also been successful to a considerable extent in luring entry-level bikers, away from Hero Honda’s 100cc bikes towards its 125cc offers. But then good times didn’t last forever, and clearly the ‘change factor’ (away from the 100cc offers) didn’t do the desired wonders for Rajiv, and for which Bajaj paid the price. And the challenge still stands tall, as even of today, 65% of the two -wheeler market consist of the entry-level machines...

Clearly, the move away from the entry level bikes came too drastically, and too suddenly. Bajaj had to realise that the Indian two-wheeler market needs a gradual conditioning to graduate to the 125-135cc from the 100cc levels... Admitting the same, Rajiv Bajaj states, “The biggest mistake we made was the XCD125, which we created by looking at someone else (Hero Honda). We should’ve delivered what the consumer was looking for...” However, S. Sridhar, CEO – Two-wheelers, Bajaj Auto is still optimistic about his bet as he says, “The falling sales just don’t matter as we are the way we are. We just can’t stop innovating...” Well, innovation is good, but Sir, the Indian middle-class consumers will most definitely take some ‘more’ good time to accept disruptive innnovation!

So, how is it faced against numero uno Hero Honda? As per Murad Ali Baig, Auto Expert, “The only problem with Bajaj is strong competition against it! Hero Honda has a sense of continuity in their approach which makes them the market leader...” And this leader isn’t quiet either, as it plans to ride on seven new models in 2009. Indeed, ‘continuity’ is the word for success in a price-conscious & high-involvement market; to which however, Rajiv has his justifications as, “The Hero Honda consumers demand ‘continuity’ and Bajaj’s consumers demand ‘change’.”

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Source : IIPM Editorial, 2009

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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