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Thread: Bajaj boosting capacity by 25% due to competition.

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    Moderator Samarth 619's Avatar
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    Smile Bajaj boosting capacity by 25% due to competition.

    Bajaj boosting capacity by 25% due to competition.


    My Summary: Bajaj is boosting its Annual production capacity, from 5 million units to 6.3 million units, out of which 5.7 million units would be 2 wheelers and the rest would be 3/4 wheelers.
    The available capacity would be utilized mainly in producing its mainstream bikes like Discover and Pulsar.
    Despite "sporty intentions" for the future, the company is clear that it is a publicly listed company now, and hence, has to produce profits and volumes, which can mostly come from the bottom end segments.
    New variants of Pulsar and Discover shall be coming, but Platina will be produced only until it sells.



    Article: In a bid to keep pace with competitors such as Hero MotoCorp and Honda Motorcycle and Scooter India (HMSI), the country’s second-largest two-wheeler manufacturer, Bajaj Auto Ltd (BAL), is ramping up capacity by a fourth across its three plants, to 6.3 million units.

    “For the current year, we have the capacity to produce and sell five million units. Investments have already been made at our plants. We are looking at increasing productivity to manufacture 6.3 million which will come on-stream next year,” said Rajiv Bajaj, managing director of BAL.
    While Hero MotoCorp is considering setting up a fourth plant to take its annual capacity over seven million units, HMSI is in the process of establishing a third facility in Karnataka, which would take its production capacity to four million units by 2013.

    Once the capacity enhancement programmes are in place, BAL would be able to produce 5.7 million two-wheelers and 600,000 three-wheelers/four-wheelers annually across the company’s three plants in Waluj, Chakan and Pantnagar. BAL will commence sales of four-wheeler ‘RE60’ by year-end in Sri Lanka and later in India in 2013.
    Interestingly, the company would utilise the available capacity to roll out new variants of its mainline brands--’Pulsar’ and ‘Discover’. “We want to make bigger, sportier bikes. We are in the volume game but not at any cost. We are a publicly listed company and we have a performance to show. We cannot but focus on the bottom line. We are focused on two brands – Pulsar and Discover,” Bajaj added.
    HMSI had earlier last week introduced its second motorcycle, the 110 cc ‘Dream Yuga’, to challenge its former partner Hero MotoCorp’s dominance in the mass commuter segment. The entry-level segment accounts for over 70-per cent of the 10-million-strong motorcycle market in the country. BAL with the ‘Platina’ model has a share of 16 per cent in the category.
    “We sell about 50,000 units of the Platina every month. As long as there is demand, we will make it. But we are not going to make any investments or marketing efforts on the brand,” said Bajaj. Instead the company would focus on developing new variants of the Pulsar and the Discover every year. To begin with, the Discover 125 ST (Sports Tourer) will go on sale from June this year, while the Pulsar 200 NS (Naked Sports) will burn rubber on Indian roads in July.
    “Our goal is only one. We have to become a bigger, better and stronger motorcycle manufacturer on a global basis. Our every move is aimed at going up the value chain. We want to increase our global market share while maintaining good profitability,” Bajaj said.
    To realise this, he said the company would first look at exporting as many units as it sells in the domestic market. Thereafter, BAL would aim at stepping up volumes overseas. The company is adding on new geographies every year, particularly in Latin America and West Africa. With sales of around 3.8 million units, Bajaj has a share of over 10 per cent in the 35-million-strong global motorcycle market.
    The company is expecting over half of its volumes to come from exports over the next two-three years. Exports accounted for 36 per cent of BAL’s total production in 2011-12. The company sold more than 1.5 million two-wheelers and commercial vehicles overseas last year. Its exports revenues grew 45 per cent to Rs 6,604 crore (33 per cent of turnover) in FY12, compared with Rs 933 crore (12.5 per cent of total net sales in 2005-06), the company said.
    The company records as much as 47 per cent of its overseas sales from Africa. As many as 60,000 units of the ‘Boxer’ alone are exported to the continent every month. Some of the company’s other key export markets are Sri Lanka, the Philippines and the Latin America.
    BAL has appointed a new distributor in Mexico and will start exports to Argentina over the next six months.


    Source: Stiff competition leads Bajaj Auto to boost capacity by 25%

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    As soon as I read the headline, first thing that stuck me was why the hell would someone increase capacity due to competition? shouldn't it be due to increase in demand for their bikes

    With new launches Bajaj would surely need additional capacity! I'm suspecting an upgrade to P135LS with monoshock, petal disc and slight power bump. It's about time as this model is around for about 3 years now.
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    Most Bajaj bikes are available On Demand.That's one of the reason which gives better sales numbers to Bajaj
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    P200NS will burn the Indian roads in July.

    First they said it will be in showrooms in March, then April, them May and now July....

    Wonder what they will say in July.. November or December??

    I was waiting for this one since its launch in Jan. Thank God I gave up last month and bought Unicorn instead. I dont know what is stopping them from making it available.

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    Quote Originally Posted by Rashid View Post
    Most Bajaj bikes are available On Demand.That's one of the reason which gives better sales numbers to Bajaj
    And you think others are producing them on order? Go to any Hero Moto Corp showroom, check if Splendor/Passion are not available on demand.

    @xforce.. you just gave up a bit too soon! it's going to be in showrooms from this month end in showrooms in MH and will be introduced in a phased manner all over India. By July it will be available all over India.
    Last edited by vrugonnab; 05-23-2012 at 10:42 AM.
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    good news... will helpp bajaj improve sales.

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    ^^^ so they have kept it at below 1.0 Lakhs price tag. good.
    but, at this price, BAL does not want it to be a mass market product. the mass market product still remains the old pulsars.

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    But when will they launch P200 SS ???
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    Other than boosting capacity. It will be great if now bajaj also boost the quality of the parts. Not that they are inferior. They have improved a lot since the first pulsar. But still they have greater potential to up on its parts...

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