Honda not to step into Bajaj Auto toes

When commissioned in the year 2001, Honda Motors would be Bajaj Auto’s biggest competitor in the scooters segment as LML and TVS sales are losing steam. Honda is investing Rs 300 crore in a brand new plant after the Japanese major broke off its ties with Kinetic Motors. Kinetic is now making scooters on its own but its sales are falling due to lack of fuel efficiency of its decade-old models.

Bajaj Auto is presently witnessing a slowdown in its scooters sales which has declined over 5 per cent in the fiscal 2000. With its entry into the non-geared segment through Saffire, the company expects to arrest the fall in its scooter sales.

“I don’t think Honda is looking at the Indian market for scooters alone. They want to get ready for any eventuality and start producing any other two-wheeler if need be,” Bajaj said. Hero Honda, a joint 50:50 joint venture between Munjals of Hero group and Honda, is the largest motorcycle maker in India and Honda has evinced its desire to increase stake in the company, say industry analysts.

“There is no question about Bajaj dealers shifting to Honda as we’ve reached an understanding,” Bajaj said after it was pointed out that Honda is seeking to appoint a nation-wide network of `experienced’ dealers. Honda officials have even visited out plants and R&D facilities to have a first-hand knowledge of the company, he said. “Besides, our big dealers have been working for us for over 20 years,” he added.

Honda is one of world’s biggest automobile manufacturer with a presence in all the major markets. The company has also set up a passenger car manufacturing facility near New Delhi and has launched Honda City successfully in India. The company is building its own sales and service network with over 60 dealers to begin with.

On the other hand, in the scooter segment, Bajaj Auto is planning to bring back the excitement by launching new products like the 4-stroke Chetak and the Bravo. Saffire would be launched in Mumbai next month and the company expects to sell over 5000 units in the current fiscal.

However, for the current fiscal, the company has projected a nagative sales growth of 8.7 per cent in the geared scooter segment. Scooters have contributed tp 41.5 per cent to the company’s total turnover in the fiscal 2000 which is expected to come down in favour of motor cycles.

In step-throughs, where the company is targeting a market share of 66.7 per cent, Bajaj Auto is launching an all-new 4-stroke step through, M80. The company hopes that this product will drive up its sales in the rural markets due to M 80’s low pricing and rugged body.