Can the launch of
KTM 390 help bajaj auto to reach the one third market share of the domestic two
wheeler industry?
Introduction:
Background information
Bajaj auto has registered a phenomenal growth in the two
wheeler market, which is currently led by hero corps with 48% share in the
domestic industry. hero motorcorps is
followed by Honda, the erstwhile partner and now a competitor. Placed third in
the industry with 27% market share, bajaj auto is aiming to gain one third
market share in the domestic market by 2015. This Indian automaker company has
relied on its research and development power, introducing new models and
features on a regular basis. hence, it could be inferred that bajaj will be
launching new and upgraded models in order to achieve this goal. Bajaj has
already hinted that they will be bringing a more powerful model of KTM duke,
with 390 cc engine. Hence, I will be investigating :
Can the launch of KTM 390 help bajaj auto to reach the one
third market share of domestic two wheeler industry?
KTM duke 390 will further boost bajaj’s dominance in the
sports category as the company holds almost 50% of the market share in that
particular product segment. This will be a high end product for the Indian
market, targeted at the upper middle class adventurists. However, this plan
will face a two sided challenge from the competitors and the rising cost of
petrol.
Procedure :
My investigation will revolve around the information
gathered through the below mentioned documents :
|
1. Bajaj
auto ltd : annual report 2012-13
2. Business
standard : Bajaj eyes one third market share over next couple of years
3. Economic
times : Bajaj Auto plans bigger Pulsar & KTM motorcycle models to take on
rivals Honda, Yamaha and Suzuk1
4. Economic
times : Hero MotoCorp: Can the two-wheeler brand stay on top while Honda and
Bajaj Auto claw into its market share?
5. Survey
: the nature of demand in Indian two wheeler market (self-conducted 2013)
|
Analysis :
Market analysis:
Currently the overall two wheeler market in india is
dominated by hero and Honda is merging as the fastest growing competitor. Hero
holds 48% market share in the two-wheeler industry, while bajaj has a market
share of 26%. The dominance of hero is primarily in 100-110 cc segment, 125 cc
segment and scooter bikes. On the other hand, bajaj dominates the premium bikes
category, holding 50% market share alone. The chart below shows the market
dominance of the major companies across different product segments:
A comparative analysis of the production capacity and the
unit sales shows that bajaj stands third in the overall market. On the other
hand, hero is the market leader by a huge margin. Key points in the table below
are :
·
Hero has the widest network of sales and
services
·
Product portfolio of hero is not updated
·
Its R&D capacity is weak
·
Honda is a globally trusted brand and high
technology quality
·
Honda doesn’t have a wide presence in terms
of sales and services facilities
·
Bajaj has a strong R&D and dominates the
premium segments
·
Bajaj is not present in the scooter segment,
which is growing very fast in the Indian two wheeler market.
This market analysis shows that bajaj dominates the premium
segment bike market. bringing bigger pulsar will further strengthen bajaj’s
reputation and strength in this segment. However, bajaj’s absence in the
scooter market is hurting the company’s growth interests in the two-wheeler
industry. while the new bajaj would belong to the niche market, with the total
demand staying in the range of 1-2%, demand for scooter is growing very fast.
Ansoff’s matrix
Low risk
High risk
Existing
product New
product
|
New
product development
KTM
duke 350 will be a new product offered by Bajaj, a major step forward from
their existing segments of 220 cc. it will give their presence in the sports
section a leading boost.
|
Diversification
Bajaj
can also look towards manufacturing scooter, a product range entirely
dominated by hero and to some extent by Honda,TVS and now Yamaha.
|
|
Market
penetration
With
this new product, bajaj will be in a better position to compete with its
Japanese rivals, and the lower end price of this Indian brand will allow them
to penetrate into the sports segment of two wheelers.
|
Market
development
Bajaj
can focus on developing new market for its products and expanding its range to countries to
which it exports its bikes.
|
Low
risk
Existing
Market
High
risk
New market
New product development : bajaj shares its R&D for high
end sports bike with KTM, which allows it to develop new premium sports bikes
at a relatively low cost.[2]
Bajaj already has a dominant presence in the premium segment and the company
enjoys a good brand presence and goodwill. Introducing a new product will
increase both these factors. Bajaj will also be able to enjoy the economy of
scale in this particular segment.
Market penetration: the strategies tat bajaj can use for
market penetration are a wider market presence in terms of sales and services,
intensive promotional strategies and price competitiveness. Currently, bajaj is
focusing on providing value-for-money products. It has a wide network of
distribution channels and company is also advertising its products on
television and other mass media platforms.
Market diversification : currently bajaj is only limited to
motorcycle market. a rapidly growing market of scooters has been left untouched
by bajaj. Entering into scooter market could be an alternative growth strategy
for the company. However, it will also be a high risk growth strategy because
bajaj will have to dedicate its resources to R&D for scooters. Moreover,
bajaj will also have to develop infrastructure for producing scooters. It might
also divert bajaj’s focus from the motorcycle market.
Market development : bajaj can also use the growth strategy
of market development. It is already exporting its products to African, and
some latin American countries along with neighbouring countries like
Bangladesh, Nepal and sri lanka. Developing this market further will require
high investment and the risk factor will also be high. Market development is
also predicated upon the product portfolio of bajaj. Adding new products will
also result in higher sales in the existing market. so, currently bajaj can
keep itself limited to the existing market and focus on enhancing its product
portfolio.
Based on the analysis of four main growth strategies
available to bajaj, I find it more convenient for bajaj to focus on its
motorbike segment and add to its product portfolio in the same. market
penetration strategy should also follow the product development strategy as it
will optimize bajaj’s growth plan. While the product diversification in the
form of entering into scooter market appears as a strong alternative, the risks
are high and bajaj cannot afford to divert its attention away from the highly
competitive motorcycle market where it has been doing increasingly well.
SWOT analysis
|
Strengths
Strong R&D, particularly in the premium bike segment after
strategic alliance with KTM
Good brand image in the motorcycle market
A dominant position in the premium segments, which is likely to grow
faster with the growth in the asian and latin American economies
Reliable image for value-for-money products
Large market presence both in the Indian sub continent, African and
the latin American market
|
Weakness
Doesn’t have any presence in a rapidly growing scooter market
Distribution and services network not as wide as hero
Lower presence in the 100-125 cc motorcycle segments
|
|
Opportunity
Can expand its market share in
the 100-125 cc segments
The launch of new products in the premium segments will further
consolidate its market position as the market leader and also increase the
market share
The presence of high end products will further improve company’s
image in the over-all market, resulting in better trust in its commuter bike
segments as well
|
Threat
Honda is growing rapidly after its separation from hero
Honda has a globally acknowledged technology in the premium bike
segments as well
Yamaha and TVS are also competing aggressively in the premium bike
segments
The relatively much smaller size of the high end bikes(1%) in the
Indian market can undermine the significance of this new product
The trade off with scooter segment could prove costly if the scooter
market keeps growing rapidly in the long run and overshadows the motorcycle
market.
|
Based on this SWOT analysis, I would say that the trade-off
with scooter market is only significant threat to bajaj. The competition given
by Honda, yamah and TVS in the premium segments can be countered by
value-for-money. Even though scooter market is a trade off, bajaj has to make
it in order to consolidate its position in the motorbike market.
The success of this proposed product can be achieved if
bajaj follows the proper marketing strategy.
4 p’s of marketing
|
Product :
Launching premium bikes in the range of 350cc and higher will allow
bajaj to compete with global bike makers like Honda, Yamaha, Suzuki etc.
It will also increase the range of their portfolio and give it the
most updated look
|
Price
Bajaj will need to price its
bike lower than the competing companies like Honda, Yamaha, Suzuki etc. the
long standing reputation of these companies could be countered with the lower
price.
|
|
Place :
Bajaj should make its premium products available across the 1st,
2nd and 3rd tier cities.
Bajaj should also ensure the availability of spare parts and service
facilities for these premium products at a wider scale.
|
Promotion :
Bajaj should do a pre-launch advertisement for this product.
Bajaj should also employ below the line promotional methods in order
to directly connect with the relatively much smaller niche market this
product is aimed at.
|
Bibliography :
Annual report 2013
Bajaj eyes one third market share over next couple of years
Bajaj Auto plans bigger Pulsar & KTM motorcycle models
to take on rivals Honda, Yamaha and Suzuk1
Hero MotoCorp: Can the two-wheeler brand stay on top while
Honda and Bajaj Auto claw into its market share?
appendix1 :
Bajaj
eyes one third market share over next couple of years
India's
second largest two-wheeler
manufacturer,
Bajaj Auto, which has currently
a market share of 27 per cent, is expecting to get hold of one third of the
total domestic bike market over the next couple of years.
“We
are aiming around four per cent increase in market share by the end of this
financial year, so this will be over 30 and from thereon we will be having one
third share of the total domestic bike market soon,” S Sridhar, President,
Motorcycle Business, Bajaj Auto said on Thursday on the sidelines of the launch
of its new Discover
125 cc bike
here.
However,
Sridhar mentioned that the company had already one third of the market share if
export is taken into account. Bajaj exports around 80,000 bikes monthly to some
of the African and South American countries apart from its exports to
neighbouring countries like Bangladesh and Nepal where it is the largest
exporter.
Bajaj
which is a market leader with almost 50 per cent market share in sports bike
segment, is now also planning to focus on mid-level commuter deluxe segment which
accounts for the 66 per cent of the total motorcycle business to achieve the
target of one third market share.
“There
are three segments in bike – sports, commuter deluxe and entry level segment.
We are at the top of the sports segment with Pulsar and want to focus on that
segment. Now we are also concentrating on mid-level commuter deluxe segment
which accounts for the 66 per cent of the total bike business with products
like Discover,” he said.
Sridhar
also pointed out that the company had experienced huge growth in the mid-level
bike segment in last two years.
“Two
years back we were having only about 7 to 8 per cent of the market share in the
mid-level segment, now this is over 20 per cent and will be around 24 per cent
at the end of this fiscal,” he added.
He
also said that, Bajaj KTM which develops high-end bikes for the Indian market,
would launch their bikes by the end of the financial year.
Speaking
on the company's venture into the entry-level segment, Sridhar said, Baja will
be re-introducing entry level commuter bike, the Boxer with modified feature in
the domestic market in the second quarter of this fiscal.“The Boxer will be
re-launched in the second quarter of this financial year. But this time it will
not be a 100 cc bike, but will be a more stronger one and will offer good
mileage too,” he said.
Appendix
2
Hero MotoCorp:
Can the two-wheeler brand stay on top while Honda and Bajaj Auto claw into its
market share?
Chanchal Pal Chauhan,
ET Bureau May 28, 2013, 06.47AM IST
On
a Sunday night this March, as thousands of youngsters grooved to tracks belted
out by popular Dutch DJ Tiesto in a makeshift pavilion in a Noida club, a
59-year-old man with salt and pepper hair waded through the throngs, a silent
observer. Pawan Munjal, the pilot of the world's largest twowheeler maker by
volumes, Hero MotoCorp, was there to "feel the pulse of the youth".
The next morning, Munjal closeted himself with 150 young Hero employees, aged 21-35 years, at The Grand in New Delhi. "He deliberately did not call any senior management as he wanted us to be completely open," says an employee who attended the meeting, on the condition of anonymity. The meeting, scheduled for an hour, stretched to four hours, spilling over to lunch, as Munjal fielded queries ranging from the company's international business plans to product development.
Embedded
in those interactions is the way Munjal wants to change Hero, from a maker of
two-wheelers that people mostly use to commute to something that is also
younger and trendier. Embedded in those interactions are also the hopes and
concerns of Hero at the crossroads it finds itself with the departure of its
partner of nearly three decades, Honda.
It
has a lot on its side: the mighty edifice of a Rs 23,768 crore operation, a
market leading 48% share in twowheelers in India, the go-to name in commuter
bikes, a sales and service reach that equals all its rivals put together. But
it was all built with Honda, which went its own way in March 2011, and a fuzzy
future is threatening Hero's storied past. 
Rivals—led by Honda, whose stated
ambition is to be number one in India by 2015-16—are filling Hero's mirrors.
And, lately, Hero has been found wanting. In a market where a launch every six
months is the norm, Hero's last new model was nine months ago, and it has
nothing more till the festive season. Sales of Hero Splendor, the
largest-selling motorcycle model in India, shrunk about 20% in 2012-13, from
2.5 million to 2 million. Its motorcycle sales are, in fact, struggling to grow
and it is scooters that are making the slack.
Rivals—led by Honda, whose stated
ambition is to be number one in India by 2015-16—are filling Hero's mirrors.
And, lately, Hero has been found wanting. In a market where a launch every six
months is the norm, Hero's last new model was nine months ago, and it has
nothing more till the festive season. Sales of Hero Splendor, the
largest-selling motorcycle model in India, shrunk about 20% in 2012-13, from
2.5 million to 2 million. Its motorcycle sales are, in fact, struggling to grow
and it is scooters that are making the slack.
Hero
has missed analyst estimates for net profit in seven of the last eight
quarters. In the quarter to December 2012, it posted its lowest net margin in
15 years, as sales tapered, costs increased and a re-branding exercise made it
to spend a lot more on advertising. In the past year, the Hero stock has fallen
3.4%, in a broad market that has gained 23.5% and one of its two main rivals,
Bajaj Auto, has risen 21%. "It is facing perhaps the toughest time of its
existence," says Abdul Majeed, partner, automotive practice,
PricewaterhouseCoopers.
Earlier
this year, when Hero unveiled an unprecedented five-year warranty—the industry
norm is three years—on its motorcycles, many said it was desperation
masquerading as confidence. "Hero doesn't carry weight without
Honda," says Mahantesh Sabarad, senior vice-president of equity research
at Fortune Securities, a brokerage, on the warranty's meaning.
In
this challenging backdrop, Munjal is beginning to unravel his blueprint for
Hero's life after Honda. He doesn't say so, but his vision for the Hero of
tomorrow resembles the Honda of today: known in every part of the worldmaking
all kinds of two-wheelers from zippy scooters to thunderous bikes, and
self-sufficient in technology. 
One by one, Munjal is initiating
multiple journeys he hopes will see Hero tick all those three boxes in the next
10 years. He has opened a new flank, exports, and is targeting 10% of sales
from here by 2018. He is filling the technology hole left by Honda with three
partnerships with overseas manufacturers.
One by one, Munjal is initiating
multiple journeys he hopes will see Hero tick all those three boxes in the next
10 years. He has opened a new flank, exports, and is targeting 10% of sales
from here by 2018. He is filling the technology hole left by Honda with three
partnerships with overseas manufacturers.
He
is beefing up research and development by setting up the country's largest
R&D centre in Kukas, Rajasthan, to assimilate and create technologies and
designs, and make an impression with launches. "The idea is to not just
take Brand Hero global, but also to make it more contemporary and
youthful," says Munjal. It's an endeavour that is taking him to places as
diverse as Noida, Guatemala and Kenya, and has his calendar booked for two
years. Going Global
One
of the clauses in Hero's erstwhile partnership with Honda was that the Indian
entity would not go to markets where its Japanese partner was present. Which
was, well, everywhere—about 150 countries. Even Bajaj Auto, the third spoke of
the two-wheeler troika in India, diversified into exports in 2005-06, and
exported 1.2 million units in 2012-13.
Making
up for lost time and opportunity, Hero is planning a big push in exports, with
100-125cc bikes. With the objective of taking its annual sales in foreign
markets from zero to 1 million units in five years, the company has
short-listed about 30 countries. "We are going to markets where we have
the best hope of quick entry and quick gains," says Munjal
Hero's
first foreign subsidiary was set up in Netherlands in April, and similar arms
are to be formed in more European countries and the US in the near future.
According to a company official in the know, who did not want to be named, Hero
is likely to also open an office in China for sourcing.
At
present, Munjal is on a three-country jaunt to Central America— Guatemala, El
Salvador and Honduras—where he will be launching the Hero brand, in partnership
with the local Indy Motos Group, and the 'hum mein hai Hero' campaign in
Spanish. A few weeks later, it will be Africa, with similar launches in Kenya,
Burkina Faso and Ivory Coast, followed by Peru in South America. "Hero is
known as a value-for-money brand that can be leveraged in markets having a
demography similar to India for exports," says Surjit Arora, analyst with
Prabhudas Lilladhar, a brokerage. 
Sabarad
of Fortune Securities feels the challenge of this foreign drive will be
distribution, which changes from market to market. "We are being very
careful in selecting global partners— distributors and channel partners—who
know the local markets and customers better than anybody," responds
Munjal. In both Central America and Africa, he adds, Hero is considering
setting up assembly units.
According
to an industry executive who did not want to be named, Hero's performance in
exports will "depend on how its pricing strategy is and also how Honda is
placed in that export market". Even two years after their separation, many
sentences on Hero's future contain a Honda in them.
The
Honda Factor
Honda
is the leader in virtually every country it operates in, except China. In
Brazil, its share is 80% and it controls half the pie in Indonesia. That's the
challenge Hero is riding into outside India. Even in India, the world's largest
market for petrol two-wheelers with annual sales of 14 million units, Honda is
on a tear.
The
Japanese company has been in India since 2001, as Honda Motorcycle and Scooter
India (HMSI). While its original pact with Hero prohibited HMSI from competing
against it in motorcycles, it was free to launch scooters, where Hero wasn't
present then.
In
the little over two years since the termination of its joint venture with Hero,
HMSI has grown faster than all rivals, overtaking TVS Motor and Bajaj Auto to
become the second-largest twowheeler company in India. In 2012-13, Honda had a
market share of 19%, against Hero's 48%, according to data from the Society of
Indian Automobile Manufacturers (SIAM).
Honda
executives pull no punches about where they want to go. "Given the current
scenario in India, I believe, it will not be 2020, but 2016 or even 2015 by
when we will attain number one position here," Shinji Aoyama, the
Japan-based operating officer of Honda Corporation's motorcycle business, told
ET in March.
Honda,
which is operating at capacity, is currently working to increase its annual
capacity by 40%, from 2.8 million units to 4 million units. As it expands, the
higher base effect will make it progressively harder for Honda to keep growing
at 30% a year. But it has a few tricks up its sleeves, especially in the
commuter segment, which is Hero's bastion and accounts for about three fourths
of sales.
The
market widely expects Honda to go head on against Hero next year, with a new
bike that competes against Splendor—the 100cc bike that brings in about 30% of
Hero's sales—and is about Rs 4,000 cheaper. Even Bajaj, whose stated
positioning is in the premium space, has launched a 100cc Discover and has
another launch in the segment scheduled this year. "Some combination of
brand, segmentation and product innovation is the only way Hero can fend off
the hungry, Japanese invader," says Zia Patel, head of strategy, India,
Wolff Olins, the marquee brand consulting firm, which has done work for Hero.
In
contrast to Honda, Hero's sales seem to be plateauing at 6 million units a
year. It has ample cash, and has initiated an expansion from 6.7 million to 9
million in three years, with new plants in Rajasthan and Gujarat. "Hero
has been talking capacity expansion for almost two years now," says a
senior company official in the know, on the condition of anonymity. "I
think they do it to give shareholders, suppliers and dealers confidence. The
reality is that their existing monthly capacity is 6 lakh and current sales
around 4.8 lakh."
Technology Travails
"The
next two to three years are very crucial for Hero," says Arora of
Prabhudas Lilladher. The company —which has a consistent history of breakout
models with Honda, like CD100 in 1984, Splendor in 1994 and Passion in 2001
—has an aging portfolio and it needs new launches. "In spite of being the
largest player, there are signs of stagnation that can only be dispelled by
some innovate products in the pipeline that will keep it ahead of its
rivals," adds Majeed of PwC.
A
glaring weakness for Hero after the break-up with Honda was technology. Hero
has the right to use Honda technology till June 2014. But it is moving beyond.
In the last two years, it has inked technology tie-ups with three overseas
companies: Engines Engineering of Italy for new designs, AVL of Austria for
engines, and Erik Buell Racing of the US for premium bikes.
"Our
objective is not to look for a replacement for our erstwhile technology
partner," says Munjal. "The idea is to have multiple partners to
build our own R&D capabilities, the quickest we can. A lot of work is going
on with all our technology partners and we will be ready to roll out new products
on our current platforms in calendar 2013 itself."
If
Honda was a one-stop shop for technology needs, which gave it market-defining
products, Hero will now be working with multiple partners. This can work both
ways. "Unless they are very clear—which partner for what product, in terms
of cubic capacity and segment—it would be a arduous task to get a successful
product," says a senior executive from a rival, not wanting to be named.
"Hero
can blend and marry the strength of its three partners into platforms, though
the commercial success of these vehicles would be the real challenge,"
adds Majeed of PwC. Jai Sharda, managing partner at Equitorials, a Mumbai based
research consultancy, points out that engineering firms from Europe and America
have failed to launch a successful product in the mileage-obsessed Indian
market. For example, Engines Engineering was Mahindra's partner for its debut
motorcycle Stallio, which was recalled and phased out due to gearbox problems.
Premium
Shift
Hero
wants to be a bigger player in the premium segment (150cc and above), which is
projected to grow from 2 million units in 2010 to 4.5 million units in 2015.
This segment is ruled by Bajaj, which has a 43% share, led by Pulsar, and is
completely focused on it. "I believe that one day everybody will buy
powerful bikes; it may take five years or 15 years, but you have to direct the
whole organisation in that direction," Rajiv Bajaj, MD and CEO of Bajaj
Auto had told ET in March.
Hero,
by comparison, has a 13% share in the premium segment. So, on the one hand,
Hero is under attack from Honda is the entry-level segment. On the other, in
the premium segment, it is yet to mark itself out as a serious challenger to
Bajaj's dominance. "Hero is vulnerable to increased competition both in
commuter bikes and a relatively weak franchise in the premium segment,"
says a recent Bank of America-Merrill Lynch report.
Majeed
of PwC feels the technology partnerships are the only hope for Hero. "Hero
is not known as a premium bike maker," he says. "The only hope for
the company could be its evolving R&D and global technology partners spruce
up some high-end bikes to grab some instant attention of youth and aspirational
customers."
That
objective is what is making Munjal observe young customers and interact with
young employees. "I'm giving them complete freedom to think out of the box
and come up with fresh, path-breaking ideas," he says. At no point has
Hero needed a reboot more than it does now. And the road to one will be
anything but smooth.
(http://articles.economictimes.indiatimes.com/2013-05-28/news/39579994_1_hero-motocorp-hero-splendor-pawan-munjal/3)
Appendix
3:
Bajaj Auto
plans bigger Pulsar & KTM motorcycle models to take on rivals Honda, Yamaha
and Suzuki
Ketan Thakkar, ET
Bureau Feb 3, 2012, 07.10AM IST
MUMBAI:
Bajaj Auto, the county's
second-largest two-wheeler maker, will launch bigger and more powerful Pulsar
and KTM motorcycle models in the 200cc
to 700 cc range over the next few years to take on rivals Honda, Yamaha and Suzuki and build on its
leadership position in the premium motorcycle space.
Bajaj
aims to position the Pulsar in the value-for-money sports bike segment and
Austrian partner KTM's motorcycles at the premium end of the market.
"We
share the same development process with KTM, so you can expect there will be 'a
much bigger Pulsar' next year, because we think the market is at an inflection
point (at the premium end) and we are in a good position to take advantage with
these two brands," managing director Rajiv Bajaj said.
Bajaj
said the company will come out with 350cc Pulsar next year and it is
exploring even bigger motorcycles under the Pulsar brand. "There will be a
350 cc Duke next year, so you can expect something similar with the Pulsar next
year. And going forward, in 2014-15 there will be even bigger KTM and even
bigger Pulsar," Bajaj said.
The
company is gearing up with the capacity of 1 00,000 units at its Chakan plant
to cater the new range of Pulsars and KTM motorcycles. On Monday, Bajaj
unveiled its Pulsar 200 NS (naked sport), which will compete against Yamaha R15
and Honda CBR 250R. The
motorcycle is likely to be priced below Rs 1 lakh.
The
launch followed KTM bringing in its Duke 200 last week with a price tag of Rs 1.16
lakh. Both motorcycles have been jointly developed by Bajaj and KTM. The two
companies are likely to jointly bring in 350 cc and 690 cc motorcycles under
the Bajaj banner over the next few years. The joint R&D for vehicle and
engine development will help the company to maintain the cost and help itself
maintain a 20% EBIDTA margins
And
the price positioning will be similar in bigger models for Pulsar and KTM, the
Indian brand at the lower end and KTM at the premium end.
The
next generation Pulsar motorcycles (200cc, 350 cc and above) will co-exist with
the current range of Pulsars. With bigger motorcycles expected from the
Japanese competition, experts say this Bajaj-KTM twin strategy should work for
the company to cater to different end of the market.
Bajaj
said the new motorcycles would help the company increase market share to
30-32%, from 26% now, as the market for premium-end motorcycles is expanding
fast.
Experts
say that with a rise in disposable income, the number of buyers will grow, but
the segment will continue to be niche as the price bracket exceeds Rs 1 lakh.
"The
market is growing, yet it forms less than 1% of the overall motorcycle market
in the country. The sports bike category will continue to grow in double digits
and there will be takers, yet it will form only 1%-2% of the market and it will
be niche category, at least in the medium term," said Mahantesh Sabarad,
auto analyst with Fortune Broking.
Bajaj
Auto, which has an export turnover of nearly 6,500 crore with almost 1.5 million
vehicles shipped annually sees the similar strategy being played out in the
global markets too.
"I
think this strategy of KTM-Pulsar acting together in the sports segment is a
valid strategy anywhere in the world not just in India. We will look at leveraging
this in many of our overseas markets in Latin America, Africa and South East
Asia," said Bajaj.
(http://articles.economictimes.indiatimes.com/2012-02-03/news/31021443_1_motorcycle-models-pulsar-brand-bajaj-auto)
Appendix 4:
Summarized profit and loss statement :
