Bajaj makes a dent on Hero Honda
It may have weathered the slowdown better than others, but scratch beneath the surface and cracks begin to appear in Hero Honda’s stranglehold in the entry-level motorcycle segment, where arch rival Bajaj is slowly eating into its market share, reports Sumant Banerji.autos Updated: Apr 21, 2010 21:19 IST
It may have weathered the slowdown better than others, but scratch beneath the surface and cracks begin to appear in Hero Honda’s stranglehold in the entry-level motorcycle segment, where arch rival Bajaj is slowly eating into its market share.
The company’s motorcycle sales grew 23 per cent in 2009-10, below industry’s growth of 26 per cent, while its marketshare in the entry-level 75-125cc motorcycle segment shrunk from 80.3 per cent in 2008-09 to 74.7 per cent in 2009-10.
The fall in marketshare is even more pronounced in the January-March 2010 period where it slid to 69.7 per cent as against 84.7 per cent in 2009.
Arch rival Bajaj Auto Ltd has directly benefited, increasing its marketshare in the segment to 17.1 per cent in 2009-10. Its growth in the January-March 2010 period was even more robust at 21 per cent against a mere 6.6 per cent in 2009. (see table).
Motorcycles constitute around 80 per cent of total two wheeler sales in the country.
Traditionally, Hero Honda has been the undisputed leader in the segment that accounts for 74 per cent of all motorcycle sales with brands like Passion and the age defying Splendor.
Bajaj initially had only one product (Platina) but it launched the Discover with a 100 cc engine last year that has led the company's fightback in the segment.
“Compared to last year when we were selling 13,000 units a month of the Discover, we are now selling 85,000 units a month,” said S. Sridhar, chief operating officer (two wheeler), Bajaj Auto Ltd. “We have been working on a strategy to penetrate the rural market and the Discover has been designed keeping that in mind. We expanded our reach heavily and now we have 4,500 sales points in the country which is more than any other auto firm.”
Hero Honda did not answer the questionnaire sent to them but has set an overall target of selling more than 5 million two wheelers in 2010-11. Not to be outdone, Bajaj, which has exited the scooter segment, is targeting a sales fighure of 4 million motorcycles that will narrow the gap between the two players further.