InvestorQ : Is it true that Bajaj Auto is planning to focus on high-end motorcycles?
vidhya Laxmi made post

Is it true that Bajaj Auto is planning to focus on high-end motorcycles?

sarah Leo answered.
5 months ago

Bajaj Auto is certainly betting that the sales of high-end motorcycles would grow faster than other motorcycles as the market at the upper end tends to be less vulnerable to income cycles and normally the demand for premium products is less cyclical. Its latest investment of Rs.650 crore in its Chakan plant is aimed at tapping this segment only.

The deal with the Maharashtra government has already been signed for setting up a new manufacturing facility for super premium high-end motorcycles like the KTM, Husqvarna and Triumph. This plant will also start making electric vehicles under the brand name of Chetak. Bajaj expects the premium segment to grow at a much faster pace.

For Bajaj Auto, the super premium motorcycles segment essentially includes the Dominar, KTM as well as bike models from its alliance with Triumph. This would also gel with the expansion of the EV portfolio, which is expected to drive sales for Bajaj in the coming quarters. Bajaj expects good premium segment traction in India and overseas markets.

It has a series of premium partnerships in place. For example, Bajaj Auto holds 48% stake in Austrian premium sports motorcycle brand KTM. Earlier, in February 2020, Bajaj Auto introduced the Husqvarna brand, from the KTM stable in India. Bajaj also has a global partnership with Triumph, the iconic British Motorbike brand.

The dichotomy is visible in the numbers. While overall motorcycle sales fell by 21% in Apr-Nov period, the premium-end motorcycle sales of KTM and Dominar grew 24%, albeit on a smaller base. Bajaj expects this double digit growth in premium segment to continue. The new Chakan plant will have capacity for 1 million units per annum.

Bajaj expects its first Triumph bikes to be available from the year 2022 and would be priced at under Rs.2 lakh for a 200cc motorcycle.