Bajaj plans to take on Tata’s Rs 1-lakh car

Fearing erosion in two-wheeler sales once Ratan Tata’s dream Rs 1-lakh car is launched...

Fearing erosion in two-wheeler sales once Ratan Tata’s dream Rs 1-lakh car is launched, the country’s second largest two-wheeler manufacturer Baja Auto is seriously considering entering the passenger car market. Hero Honda, the country’s top bikemaker has already said it would foray into the four-wheeler market.

“The JD power study says that it (Tata’s one lakh car) will affect the two-wheeler market. If that happens, then we would also manufacture cars for the market,” Bajaj Auto chairman Rahul Bajaj said on the sidelines of the eighth annual convocation ceremony of

Indian Institute of Management (IIM), Indore.

Bajaj Auto, which was earlier essentially a scooter manufacturer, shifted gears and got into the motorcycle segment when the market preference moved to the latter from scooters.

Bajaj had earlier said it would launch a goods-carrier version of a light commercial vehicle in the first half of 2009. It is also expected to a launch passenger carrier version a little later. The proposed vehicle will be fitted with a 500-600cc engine and will be available in diesel, petrol and compressed natural gas (CNG) versions.

International consultancy firm JD Power had said early this week that the Tatas’ people’s car would severely affect the top-end motorcycle segment in which Bajaj is the market leader with Pulsar. Tata Motor’s proposed car is likely to be launched in the third quarter of 2008.

The country’s largest car manufacturer Maruti Udyog Ltd’s (MUL) True Value initiative has already dented the domestic high-end motorcycle market. Under True Value, Maruti dealers sell used car certified by the company at a considerably lower price compared with a new one. Maruti sells around 75,000 used cars a year under this initiative.

Kolkata-based Global Automobiles, which recently entered the two-wheeler market has also tied up with China’s Guangzhou Motors, to roll out a low-cost (sub Rs 1 lakh) car.

—(With Agencies)