Bajaj in revival mode for three-wheelers; to launch four new products  

Bajaj Auto Ltd, India’s second largest two-wheeler maker is in a revival mode for its three-wheeler business. After its re-entry into 100 cc motorcycle, the company is now planning to come out with four different models of its three wheelers. The road ahead is, however is not smooth. Bajaj’s new offering will have to face a very stiff competition from the altogether new ‘mini truck’ segment, ruled by Tata Motors’ ‘Ace’ and Piaggio’s ‘Ape’.

 

Bajaj Auto’s market share is falling significantly over the past years, even when the three-wheeler market has grown by a compounded annual growth rate (CAGR) of 18%. During the year 2008 to 2009, Bajaj’s market share in three wheeler passenger and commercial vehicle segment fell to 63.6% and 12%, respectively from 70.3% and 20%, during the previous year. While the 3-wheel industry registered 10.3% year-on-year growth, Bajaj's production grew by just 0.3%.

 

Earlier many companies like the Mahindra and Mahindra (M&M) and Piaggio of Italy tried to break Bajaj’s monopoly in three-wheeler market. In a game changing move, instead of competing with Bajaj in three-wheeler segment, Tata Motors, the country’s largest vehicle maker, came out with a complete new category, called mini truck, which became an instant hit.

The launch of ‘Ace’ saw an overall dip in three wheeler commercial vehicles with Bajaj’s taking the maximum blow. It was also multiplied by the facts that Bajaj offers just one variant, ‘GC Max’ in this segment, while others like M&M has two variants, ‘Champion’ and ‘Alfa’. Following Tata’s success with ‘Ace’, Piaggio also entered the mini truck segment with its ‘Ape’ truck.

 

In its bid to counter the growing influence mini truck segment, Bajaj, in January 2008 had said that it will enter into LCV segment. The company said it would manufacture the LCVs at its Chakan-based facility near Pune. However, no concrete steps have been taken by Bajaj, so far, and there is no word from the company on the proposal.

 

Last week, Bajaj said it would launch four new variants of its three-wheelers in passenger and commercial vehicle segment, in the next six months. RC Maheshwari, Bajaj’s chief executive for commercial vehicle division, said the company would manufacture eco-friendly vehicles in petrol, compressed natural gas (CNG) and liquefied petroleum gas (LPG) with an aim to sell about 300,000 units, annually.

 

The LCV segment in India is also attracting major auto manufacturers like, Nissan, Volvo and Daimler, which have joined hands with Ashok Leyland, Eicher and Hero, respectively, to enter the market. India’s third largest two-wheeler maker, TVS Motor Co has also entered into three-wheeler segment, recently.

 

The advent of mini trucks like ‘Ace’ and ‘Ape’ has erased the line between low capacity, three-wheeler commercial vehicles and sub three tonnes LCVs. It remains interesting to watch what kind of product mix Bajaj comes up with to counter and sustain the competition. – Yogesh Sapkale with Sourabh Kulkarni [email protected]