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Rajiv's goal for FY12: 42 lakh Bajaj motorcycles on road
Published on Mon, Apr 04, 2011 at 12:00 | Updated at Mon, Apr 04, 2011 at 19:32 | Source : CNBC-TV18
In an interview with CNBC-TV18, Rajiv Bajaj, managing director of Bajaj Auto, spoke about the latest happenings in his company and the road ahead. Below is a verbatim transcript of the interview.
Q: Can you start by giving us the March total numbers and a breakup?
A:Q: How did it breakup between Pulsar and Discover?
A:Q: You have a new launch as well. Before we talk about the details of that, on the basis of that new launch are you relooking your full year volume targets for this new financial year?
A:Q: So in these 4.6-4.7 million units marked in for FY12, what is the breakup that you have done internally between the Discover, Pulsar and also the new 125 cc?
A: Q: So to get to 4.6-4.7 million you would imagine that at some point in the year you would be starting to clock more 4 lakh vehicles a month. When do you expect to hit that kind of run rate?
A:Q: As we understand it right now the battle is heating up in the premium space where Bajaj holds lead and Hero is very aggressively trying to grow. Why this decision to get into 125 cc?
A: We have led the sport segment for quite sometime. We have plans towards the second half of this year to launch both the new Pulsars as well as the first of the new KTMs that is been jointly developed by Bajaj and KTM. But since these products come in the second half they will not impact this year significantly.
On the other hand Discover is in a space that is typically 500,000-600,000 motorcycles every month as oppose to the Pulsar, which is competing for a segment that is only about 150,000 a month. So if we have to continuously scale up, the Discover makes sense. We think we have two strong products in terms of the Discover 100cc and the Discover 150cc, which are both selling about 80,000 and 40,000 respectively.
Those are the two extremes of the commuter segment. Research told us that there was yet another kind of consumer in the middle who wishes to move on from the 100cc but for some reason was intermediated by price and mileage to go all the way to 150cc. So it seem like the 125cc is a happy medium for him.
I will tell you candidly that I am no personally entirely convinced by this research in the sense that sometimes the happy medium does turnout to be halfway house. But in the end only find out by doing.
We have done our best. We have put out a product that we think some people want and hopefully they exist out there.
Q: One clarification because I caught a bit of what you explained at the press conference but not the full of it. There were some taxation concerns for plant such as yours in Maharashtra but I think I heard you say that the Chakan plant stands unaffected by any of those taxation changes?
A:Q: This 4.6 million units that you are guiding for FY12, does it come with a guidance of 20% margin that you managed to hold last year?
A: What has happened is the last quarter has been quite a struggle by which I mean Q4. As you know, Q3 we managed to hold on to 20.3%. We fought very hard through the Q4 to stay at the same level. When we will declare our results in May, we will know more about. We are certainly going to fight hard to stay in this space but the way commodities have gone up, even in the last four weeks, I can say it has taken me also by surprise.
We have increased prices 1st April in the domestic market and we will do so in the May 1 in export markets. So by combination of all the usual levers one is hoping to stay in that space but to put it in short I would say more than 20% which is not really sacrosanct we believe as strategies good enough to keep us 7-8 percentage points above the average of the auto industry.
For the last two years that average was about 13 and we were at 20. So if the industry derates by a percentage point, so would Bajaj but we are not going to stay very far from 20%.
Video : Rajiv's goal for FY12: 42 lakh Bajaj motorcycles on road >> Watch Video
Source : Rajiv's goal for FY12: 42 lakh Bajaj motorcycles on road - CNBC-TV18 -
In an interview with CNBC-TV18, Rajiv Bajaj, managing director of Bajaj Auto, spoke about the latest happenings in his company and the road ahead. Below is a verbatim transcript of the interview.
Q: Can you start by giving us the March total numbers and a breakup?
A:Q: How did it breakup between Pulsar and Discover?
A:Q: You have a new launch as well. Before we talk about the details of that, on the basis of that new launch are you relooking your full year volume targets for this new financial year?
A:Q: So in these 4.6-4.7 million units marked in for FY12, what is the breakup that you have done internally between the Discover, Pulsar and also the new 125 cc?
A: Q: So to get to 4.6-4.7 million you would imagine that at some point in the year you would be starting to clock more 4 lakh vehicles a month. When do you expect to hit that kind of run rate?
A:Q: As we understand it right now the battle is heating up in the premium space where Bajaj holds lead and Hero is very aggressively trying to grow. Why this decision to get into 125 cc?
A: We have led the sport segment for quite sometime. We have plans towards the second half of this year to launch both the new Pulsars as well as the first of the new KTMs that is been jointly developed by Bajaj and KTM. But since these products come in the second half they will not impact this year significantly.
On the other hand Discover is in a space that is typically 500,000-600,000 motorcycles every month as oppose to the Pulsar, which is competing for a segment that is only about 150,000 a month. So if we have to continuously scale up, the Discover makes sense. We think we have two strong products in terms of the Discover 100cc and the Discover 150cc, which are both selling about 80,000 and 40,000 respectively.
Those are the two extremes of the commuter segment. Research told us that there was yet another kind of consumer in the middle who wishes to move on from the 100cc but for some reason was intermediated by price and mileage to go all the way to 150cc. So it seem like the 125cc is a happy medium for him.
I will tell you candidly that I am no personally entirely convinced by this research in the sense that sometimes the happy medium does turnout to be halfway house. But in the end only find out by doing.
We have done our best. We have put out a product that we think some people want and hopefully they exist out there.
Q: One clarification because I caught a bit of what you explained at the press conference but not the full of it. There were some taxation concerns for plant such as yours in Maharashtra but I think I heard you say that the Chakan plant stands unaffected by any of those taxation changes?
A:Q: This 4.6 million units that you are guiding for FY12, does it come with a guidance of 20% margin that you managed to hold last year?
A: What has happened is the last quarter has been quite a struggle by which I mean Q4. As you know, Q3 we managed to hold on to 20.3%. We fought very hard through the Q4 to stay at the same level. When we will declare our results in May, we will know more about. We are certainly going to fight hard to stay in this space but the way commodities have gone up, even in the last four weeks, I can say it has taken me also by surprise.
We have increased prices 1st April in the domestic market and we will do so in the May 1 in export markets. So by combination of all the usual levers one is hoping to stay in that space but to put it in short I would say more than 20% which is not really sacrosanct we believe as strategies good enough to keep us 7-8 percentage points above the average of the auto industry.
For the last two years that average was about 13 and we were at 20. So if the industry derates by a percentage point, so would Bajaj but we are not going to stay very far from 20%.
Video : Rajiv's goal for FY12: 42 lakh Bajaj motorcycles on road >> Watch Video
Source : Rajiv's goal for FY12: 42 lakh Bajaj motorcycles on road - CNBC-TV18 -
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