Honda, Suzuki heat up two-wheeler market  ( September '6,2004, ET)

Global two-wheeler majors with deep pockets such as Honda (with its 100% subsidiary Honda Motorcycles & Scooter) and Suzuki are expected to give existing players like Bajaj Auto, Hero Honda and TVS a run for their market share.

While Honda Motorcycle & Scooters (HMSI) is planning the launch of its 150cc Unicorn motorcycle this month, Suzuki (which severed ties with TVS Motors in ’02) is gearing for a FY06 launch. Indian majors are also working doubly hard to take on competition by launching new models and variants.

Current offerings in the premium motorcycle segment include Bajaj’s Pulsar (65% share), TVS’ Fiero (11% share) and Hero Honda’s CBZ (5% share). Analysts indicate that the entry of HMSI into the premium motorcycle segment is unlikely to have any significant impact on the market share.

An analyst from a Mumbai-based brokerage said, “looking at Honda’s style of functioning in scooters, it will not start a price war. It will offer value-added features, ensuring that its products are not available at substantial premiums to those of competitors.”

However, with a sales target of 6,000 per month in the second half of this fiscal and 10,000 per month in FY06 in a market of 50,000 per month, it is unlikely that HMSI would be able to challenge Pulsar’s leadership position in the segment, analysts added. Despite various models being launched by competition in this segment, the company continues to sell about 22,000-23,000 Pulsars per month. In the first four months of this fiscal, the company has sold about 93,000 Pulsars.

Honda has indicated that by FY07, the global manufacturer expects to garner 50% share of India’s two-wheeler market. HMSI’s plans include introducing 125cc and above motorcycle models to develop this nascent market segment, consolidate position in the scooter segment and eventually exercise its bargaining power with domestic partner Hero Honda to introduce overlapping 100cc motorcycle models.

Since the entry of HMSI in India, the company has captured a 35% share of the aggregate scooters market and a 5.8% share of the two-wheeler market. Both BAL and TVS have been losers, with the former losing half its market share in scooters and TVS losing market share in automatic scooters.

To take on competition, Bajaj Auto is planning to launch an upgraded version of the Pulsar. Domestic two-wheeler majors are working on new features and variants to further improve market share.

“A plethora of planned new launches will imply that no single player is likely to achieve significant market share gains for extended periods of time,” an official said. Incidentally, over the past 10 years, BAL, Hero Honda and TVS have consolidated their positions, raising collective market share from 68% to 87%.

Statistics: Public Company Incorporated: 1945 as M/s Bachraj Trading Ltd. Employees: 17,200

Sales: Rs 42.16 billion ($903.36 million)(2000) Stock Exchanges: Pune Mumbai Delhi London Berlin Frankfurt Munich Ticker Symbols: BAJAJAUTO 490 BJATq.L 893361.BE 893361.F 893361.MU NAIC: 336991 Motorcycle, Bicycle, and Parts Manufacturing

Company Perspectives:

Our Philosophy: We approach our responsibilities with ambition and resourcefulness. We organise ourselves for a transparent and harmonious flow of work. We respect sound theory and encourage creative experimentation. And we make our workplace a source of pride. We believe in: Transparency--a commitment that the business is managed along transparent lines. Fairness&mdashø all stakeholders in the Company, but especially to minority shareholders. Disclosure--of all relevant financial and non-financial information in an easily understood manner. Supervision--of the Company's activities by a professionally competent and independent board of directors.

Key Dates:

1945: Bajaj Auto is founded. 1960: Rahul Bajaj becomes the Indian licensee for Vespa scooters. 1977: Technical collaboration with Piaggio ends. 1984: Work begins on a second plant. 1998: Bajaj plans to build its third plant to meet demand. 2000: Thousands of workers are laid off to cut costs.

Company History:

Bajaj Auto Limited is India's largest manufacturer of scooters and motorcycles. The company generally has lagged behind its Japanese rivals in technology, but has invested heavily to catch up. Its strong suit is high-volume production; it is the lowest-cost scooter maker in the world. Although publicly owned, the company has been controlled by the Bajaj family since its founding.

Origins

The Bajaj Group was formed in the first days of India's independence from Britain. Its founder, Jamnalal Bajaj, had been a follower of Mahatma Gandhi, who reportedly referred to him as a fifth son. 'Whenever I spoke of wealthy men becoming the trustees of their wealth for the common good I always had this merchant prince principally in mind,' said the Mahatma after Jamnalal's death.

Jamnalal Bajaj was succeeded by his eldest son, 27-year-old Kamalnayan, in 1942. Kamalnayan, however, was preoccupied with India's struggle for independence. After this was achieved, in 1947, Kamalnayan consolidated and diversified the group, branching into cement, ayurvedic medicines, electrical equipment, and appliances, as well as scooters.

The precursor to Bajaj Auto had been formed on November 29, 1945 as M/s Bachraj Trading Ltd. It began selling imported two- and three-wheeled vehicles in 1948 and obtained a manufacturing license from the government 11 years later. The next year, 1960, Bajaj Auto became a public limited company.

Rahul Bajaj reportedly adored the famous Vespa scooters made by Piaggio of Italy. In 1960, at the age of 22, he became the Indian licensee for the make; Bajaj Auto began producing its first two-wheelers the next year.

Rahul Bajaj became the group's chief executive officer in 1968 after first picking up an MBA at Harvard. He lived next to the factory in Pune, an industrial city three hours' drive from Bombay. The company had an annual turnover of Rs 72 million at the time. By 1970, the company had produced 100,000 vehicles. The oil crisis soon drove cars off the roads in favor of two-wheelers, much cheaper to buy and many times more fuel-efficient.

A number of new models were introduced in the 1970s, including the three-wheeler goods carrier and Bajaj Chetak early in the decade and the Bajaj Super and three-wheeled, rear engine Autorickshaw in 1976 and 1977. Bajaj Auto produced 100,000 vehicles in the 1976-77 fiscal year alone.

The technical collaboration agreement with Piaggio of Italy expired in 1977. Afterward, Piaggio, maker of the Vespa brand of scooters, filed patent infringement suits to block Bajaj scooter sales in the United States, United Kingdom, West Germany, and Hong Kong. Bajaj's scooter exports plummeted from Rs 133.2 million in 1980-81 to Rs 52 million ($5.4 million) in 1981-82, although total revenues rose five percent to Rs 1.16 billion. Pretax profits were cut in half, to Rs 63 million.

New Competition in the 1980s

Japanese and Italian scooter companies began entering the Indian market in the early 1980s. Although some boasted superior technology and flashier brands, Bajaj Auto had built up several advantages in the previous decades. Its customers liked the durability of the product and the ready availability of maintenance; the company's distributors permeated the country.

The Bajaj M-50 debuted in 1981. The new fuel-efficient, 50cc motorcycle was immediately successful, and the company aimed to be able to make 60,000 of them a year by 1985. Capacity was the most important constraint for the Indian motorcycle industry. Although the country's total production rose from 262,000 vehicles in 1976 to 600,000 in 1982, companies like rival Lohia Machines had difficulty meeting demand. Bajaj Auto's advance orders for one of its new mini-motorcycles amounted to $57 million. Work on a new plant at Waluj, Aurangabad commenced in January 1984.

The 1986-87 fiscal year saw the introduction of the Bajaj M-80 and the Kawasaki Bajaj KB100 motorcycles. The company was making 500,000 vehicles a year at this point.

Although Rahul Bajaj credited much of his company's success with its focus on one type of product, he did attempt to diversify into tractor-trailers. In 1987 his attempt to buy control of Ahsok Leyland failed.

The Bajaj Sunny was launched in 1990; the Kawasaki Bajaj 4S Champion followed a year later. About this time, the Indian government was initiating a program of market liberalization, doing away with the old 'license raj' system, which limited the amount of investment any one company could make in a particular industry.

A possible joint venture with Piaggio was discussed in 1993 but aborted. Rahul Bajaj told the Financial Times that his company was too large to be considered a potential collaborator by Japanese firms. It was hoping to increase its exports, which then amounted to just five percent of sales. The company began by shipping a few thousand vehicles a year to neighboring Sri Lanka and Bangladesh, but soon was reaching markets in Europe, Latin America, Africa, and West Asia. Its domestic market share, barely less than 50 percent, was slowly slipping.

By 1994, Bajaj also was contemplating high-volume, low-cost car manufacture. Several of Bajaj's rivals were looking at this market as well, which was being rapidly liberalized by the Indian government.

Bajaj Auto produced one million vehicles in the 1994-95 fiscal year. The company was the world's fourth largest manufacturer of two-wheelers, behind Japan's Honda, Suzuki, and Kawasaki. New models included the Bajaj Classic and the Bajaj Super Excel. Bajaj also signed development agreements with two Japanese engineering firms, Kubota and Tokyo R & D. Bajaj's most popular models cost about Rs 20,000. 'You just can't beat a Bajaj,' stated the company's marketing slogan.

The Kawasaki Bajaj Boxer and the RE diesel Autorickshaw were introduced in 1997. The next year saw the debut of the Kawasaki Bajaj Caliber, the Spirit, and the Legend, India's first four-stroke scooter. The Caliber sold 100,000 units in its first 12 months. Bajaj was planning to build its third plant at a cost of Rs 4 billion ($111.6 million) to produce two new models, one to be developed in collaboration with Cagiva of Italy.

New Tools in the 1990s

Still, intense competition was beginning to hurt sales at home and abroad during the calendar year 1997. Bajaj's low-tech, low-cost cycles were not faring as well as its rivals' higher-end offerings, particularly in high-powered motorcycles, since poorer consumers were withstanding the worst of the recession. The company invested in its new Pune plant in order to introduce new models more quickly. The company spent Rs 7.5 billion ($185 million) on advanced, computer-controlled machine tools. It would need new models to comply with the more stringent emissions standards slated for 2000. Bajaj began installing Rs 800 catalytic converters to its two-stroke scooter models beginning in 1999.

Although its domestic market share continued to slip, falling to 40.5 percent, Bajaj Auto's profits increased slightly at the end of the 1997-98 fiscal year. In fact, Rahul Bajaj was able to boast, 'My competitors are doing well, but my net profit is still more than the next four biggest companies combined.' Hero Honda was perhaps Bajaj's most serious local threat; in fact, in the fall of 1998, Honda Motor of Japan announced that it was withdrawing from this joint venture.

Bajaj Auto had quadrupled its product design staff to 500. It also acquired technology from its foreign partners, such as Kawasaki (motorcycles), Kubota (diesel engines), and Cagiva (scooters). 'Honda's annual spend on R & D is more than my turnover,' noted Ruhal Bajaj. His son, Sangiv Bajaj, was working to improve the company's supply chain management. A marketing executive was lured from TVS Suzuki to help push the new cycles.

Several new designs and a dozen upgrades of existing scooters came out in 1998 and 1999. These, and a surge in consumer confidence, propelled Bajaj to sales records, and it began to regain market share in the fast-growing motorcycle segment. Sales of three-wheelers fell as some states, citing traffic and pollution concerns, limited the number of permits issued for them.

In late 1999, Rahul Bajaj made a bid to acquire ten percent of Piaggio for $65 million. The Italian firm had exited a relationship with entrepreneur Deepak Singhania and was looking to reenter the Indian market, possibly through acquisition. Piaggio itself had been mostly bought out by a German investment bank, Deutsche Morgan Grenfell (DMG), which was looking to sell some shares after turning the company around. Bajaj attached several conditions to his purchase of a minority share, including a seat on the board and an exclusive Piaggio distributorship in India.

In late 2000, Maruti Udyog emerged as another possible acquisition target. The Indian government was planning to sell its 50 percent stake in the automaker, a joint venture with Suzuki of Japan. Bajaj had been approached by several foreign car manufacturers in the past, including Chrysler (subsequently DaimlerChrysler) in the mid-1990s.

Employment fell from about 23,000 in 1995-96 (the year Bajaj suffered a two-month strike at its Waluj factory) to 17,000 in 1999-2000. The company planned to lay off another 2,000 workers in the short term and another 3,000 in the following three to four years.

Principal Subsidiaries: Bajaj Auto Finance Ltd.; Bajaj Auto Holdings Ltd.; Bajaj Electricals Ltd.; Bajaj Hindustan Ltd.; Maharashtra Scooters Ltd.; Mukand Ltd.

Principal Competitors: Honda Motor Co., Ltd.; Suzuki Motor Corporation; Piaggio SpA.

BAJAJ PULSER DTSi

Bajaj Auto Ltd. has launched Pulsar DTSi in its attempt to remain 'Distinctly Ahead'. The all new Pulsar DTSi is packed with the path breaking next generation technology of digital biking. Its various digital systems like capacitor discharge ignition (CDI) system, Digital console and Digital Twin Spark ignition (DTSi) provides efficient fuel combustion and better performance under all conditions. The latest DTSi engine of Bajaj Pulsar DTSi, with twin spark plugs and 8 bit microprocessor chip, generates the pulsating 18 ps of power to excite the bikers and its advanced ExhausTEC technology ensures the great performance at lower rpm.

The muscular aerodynamic shape of Pulsar DTSi and its 1350 mm of wheel base with 17" large alloy wheels give this bajaj bike a robust presence on the road. For the first time in India, Pulsar DTSi is equipped with an Oil cooler, tube less tyres and new digital console that makes the Pulsar most sporty and stylish two wheeler on Indian roads.

Launched in three variants of 200cc, 150cc and 180 cc, Pulsar DTSi has a price tag of Rs.70-75,000 (approx.) and up for sale through out the dealerships of Bajaj Auto India.

Company Name Segment USP

Bajaj Auto Ltd.150-200

CCDigital Twin Spark ignition (DTSi)

Engine.

Key Features of Bajaj Pulsar DTSi

Engine Oil Cooler to control the temperature and maintain the high speed and rpm. Digital Odometer, Digital Speedo Meter, Digital Fuel Gauge and two Digital Trip Meters

contributes to enhanced riding comfort. Tubeless tyres for better road grip and stability. First bike in India with large 33 mm front fork for better shock absorbing ability. Constant velocity (CV) carburetor for high level of performance. Split seat for better riding and sitting comfort. The new Petrol tank flaps gives petrol tank an aerodynamic looks.

Variants of Pulsar DTSi

Bajaj Pulsar 200 DTSi

Bajaj Pulsar 150 DTSi and Bajaj Pulsar 180 DTSi.

Price & Competition for Bajaj Pulsar DTSi

With its innovative and latest technology Pulsar DTSi will be a tough competition to Hero Honda CBZ Xtreme, Honda Unicorn, TVS Apache and Hero Honda Karizma.

Bajaj Pulsar DTSi is under the price tag of Rs. 70-75,000.

(Please Note: The prices are ex-showroom and based on the close approximation. Please check the latest prices and variant specifications with your dealer)

Technical Specifications

Dimensions & Weight

Wheelbase (mm) 1340

Weight (kgs) 145 Kg

Engine

Model Designation 4-stroke, DTS-i, Oil cooled

Engine responseNew Silencer with ExhausTEC technology now ensures improved engine torque even at varying load conditions

Fuel Efficiency 50-55 kmpl

Displacement (cc) 198.8 cc

Transmission 05 Gears

Top Speed (kmph) 135

Suspension

Front Telescopic forks 135 mm stroke

Rear Triple rate spring, 5 way adjustable, gas charged NitroX shock absorbers

Brakes

Front 260 mm hydraulically operated disc brake

Rear Mechanically expanding 130 mm drum type

Tyres

Front 90/90 x 17" Tubeless tyre, shod on aluminium alloy wheels

Rear 120/80 x 17" Tubeless tyre, shod on aluminium alloy wheels

Fuel Tank 15 Lts ( 2 liters of usable reserve)

Performance

Max. Horsepower (ps/rpm)

18 Ps / 13.25 Kw @ 8000 rpm

Max. Torque (kg m/rpm)

1.75 kgm / 17.17 Nm

More 150 cc - 500 cc Bikes in India

Bajaj Avenger Bajaj Pulsar Bajaj Pulsar DTS FI 220

Bullet 350 Bullet Electra Hero Honda Achiever

Hero Honda CBZ Xtreme Hero Honda Hunk Hero Honda Karizma

Honda Unicorn Kinetic Comet Thunderbird

TVS Apache TVS Apache RTR FI 160 TVS Fiero FX

History

Before the introduction of the Pulsar, the Indian motorcycle market trend was towards fuel efficient, small capacity motorcycles (that formed the 80-125 cc class). Bigger motorcycles with higher capacity virtually did not exist (except for Enfield Bullet). The launch and success of Hero Honda CBZ in 1999 showed that there was demand for performance bikes. Bajaj took the cue from there on and launched the Pulsar twins in India on November 24, 2001. [2] Since the introduction and success of Hero Honda CBZ, the Indian youth began expecting high power and other features from affordable motorcycles.

The project was faced with internal resistance, reservations by Mckinsey and doubts on its effects on Bajaj's relation with Kawasaki. The project required approximately 36 months for completion and cost Bajaj Rs 1 billion[3]

Market position

As of 2006, the Bajaj Pulsars form the most popular motorbike product in the newly emerging 150+ cc class of Indian two wheeler market.[4] Bajaj have been regularly making alterations to it to make the motorbike look fresh at all times.

Versions

2001

The original Pulsar came with a 150 cc or 180 cc air-cooled, single-cylinder, petrol, spark-ignited four-stroke engine. They featured a single spark plug to ignite the air-fuel mixture fed from a carburetor, simple spring shock absorbers, round headlamp dome and 1,235 mm wheelbase. Disc brakes as standard equipment was a novelty in Indian motorcycles of the early 2000s. Other standard features were parking lights and an aircraft-type fuel tank lid. The 180 cc version came with Electric Start (ES) and twin-tone horn, both of which were optional equipment on the 150 cc version.

2003

The second generation Pulsars featured Bajaj Auto's newly developed DTSi technology[5], which increased the power rating of both versions by 1 bhp each and also increased fuel economy[6]. This model also sported a new headlamp assembly, 1,320 mm wheelbase[7], and standard twin-tone horn and trip meter.

2005

In 2005, Bajaj launched another upgrade of the Pulsar. The bike was offered with 17 inch alloy wheels as standard option, and the stance was also lowered by about 12 mm. It was the first time any bike maker in India had offered 17 inch profile wheels at the rear. The fuel tank now had a capacity of only 15 litres[8]. The power output was now further increased to 13.5 bhp @ 8500

rpm for the 150 while it increased to 16.5 bhp @ 8500rpm for the 180[9]. The rear shock absorbers were now gas-filled Nitrox absorbers.

2006

Bajaj introduced another version of Pulsar. New features included: pilot lamps separated from the main headlamp, turn indicators with clear lenses and amber bulb, self-cancelling turn indicator switch, flush LCD screen with digital read-out of key vehicle data, non-contact speed sensor, non-contact backlit switches, twin-stripe LED tail-light assembly and side panels altered for a sharp, tapering-towards-the-rear look. The engine had increased torque availability, reduced vibration and improved gear shift feel. They also introduced the 1 Down 4 Up variant of the Gear box for the first time on sub 150cc variants.[10].

2007

In July 2007, Bajaj began selling the Bajaj Pulsar 220 DTS-Fi and Pulsar 200 DTS-i, featuring fuel injection and oil cooled engines, a digital dash, and modern styling. This bike has some features which are totally new to the Indian market, like the fuel injection itself, rear disc brake(only in 220), and clip-on handlebars(only in 220).

Technology

DTSi

DTSi stands for Digital Twin Spark Ignition, a Bajaj Auto trademark. The DTSi idea is a simple one to understand - it involved usage of two spark plugs (instead of the usual choice of one) per engine cylinder.

Bajaj Auto holds an Indian patent for the DTSi technology. The Alfa Romeo Twin-Spark engines, the BMW F650 Funduro which was sold in India from 1995 to 1997 also had a twin-spark plug technology, and the Rotax motorcycle engines,more recently Honda's iDSI Vehicle engines use a similar arrangement of two spark-plugs. However very few small capacity engines did eventually implement such a scheme in their production prototypes. This may be the case because the idea was perhaps not observed to yield any significant or noticeable performance benefit that could be justified against the additional investment of an extra spark plug. This may well be the reason behind very few Indian motorcycles offering products based

While Bajaj claims that the Pulsar is a complete in house product, it should also be known that they had learnt a considerable know-how of building motorcycles from their erstwhile technology partner Kawasaki. Take for instance the original Kawasaki-Bajaj Eliminator, (now sold as the Bajaj Avenger) that had a different engine design than that of the current 180/200 cc Avenger series.

ExhausTEC

ExhausTEC stands for Exhaust Torque Expansion Chamber, a Bajaj Auto trademark. The technology involves use of a small chamber connected to the exhaust pipe of the engine to modify the back-pressure and the swirl characteristics, with an aim to improve the low-end performance of the bikes. This was attempted in response to the issue of a reported lack of low-end response in Bajaj's single-cylinder four-stroke engines. The ExhausTEC technology is claimed to be highly effective in improving the overall engine response, especially the low-end torque characteristics. This enhanced performance is claimed to come at no loss of top-end performance or engine smoothness.

Criticisms

Ergonomics and quality

Taller riders often find it difficult to 'tuck in', due to the lack of knee recesses. The 2006 Pulsar also faces numerous defects. The LED Tail Lights, Electronic Fuel gauge and Auto Start malfunctions frequently. But Bajaj has been proactive in changing the faulty components of the bikes at no cost. Bajaj has also replaced the tyre provided in 3rd upgrade model from MRF Zapper to Eurogrip which many riders feel is comparitively of inferior quality and see it as a cost cutting step. But Bajaj is making continuous efforts in order to improve the overall quality of vehicles and squeeze in more features at similar prices.

[edit] Patent infringement allegations

In september 2007, Bajaj Auto filed a claim accusing that the development of TVS Flame was in violation of their patent for DTS-I. [11] TVS Motors countered by threatening to sue Bajaj Auto for libel. [12][13]. On February 2008, the Chennai High Court restrained TVS from launching it with the twin spark plug technology. [14]. TVS appealed against this decision, claiming that crucial evidence was not taken into account [15] and on March 2008,launched the Flame with a modified engine containing one spark plug. [16]

Awards

The different variants of Pulsar have won the following awards.[17]

2008

Bike India awards- Bike of the year- upto 250 cc [18]

Indian Motorcycle of the Year [19]

2007

CNBC-TV18 Autocar Auto Awards- Bike of the Year

2004

ICICI Bank OVERDRIVE Awards -Bike of the Year

2003

BBC World Wheels Award-Viewers Choice Two Wheeler of YearBBC World Wheels Award-Best Two Wheeler between Rs 55,000 to Rs 70,000BBC World Wheels Award-Best Two Wheeler between Rs 45,000 to Rs 50,000NFO Automotive- Motorcycle Total Customer Satisfaction StudyICICI Bank OVERDRIVE Awards -Bike of the year

2002

OVERDRIVE Awards- Most exciting bike of the year