Exceeding troubles
Bajaj Auto battles rumors and a competitor.
Bajaj auto has been hitting the headlines for all the wrong reasons in the past fortnight. For starters, the company has been battling reports that its latest 125 cc offering, the DTS-Si XCD 125, has ‘faulty components’ and that it has offered to replace these defective parts. The company, however, has denied any such problems.
“There is no truth in these rumors,” says S. Sridhar, CEO, twowheelers business, Bajaj Auto. “There are no defects that have been reported at this point of time. Most of these reports have stemmed from people who have spoken to a customer or two. I believe these rumors are instigated,” adds Sridhar.
He also denies “any kind of recall” is happening. Within the first month of its launch, the company clocked sales of 18,131 XCD bikes (for September). Bajaj Auto claims that more than 55 per cent of these bikes were purchased by customers who owned their competitors’ bikes. In all, the company sold 204,152 motorcycles in September—a 25 per cent dip over the previous year’s corresponding period.
Bajaj Auto is banking a lot on the XCD to nudge closer to market leader Hero Honda. According to a recent company release, with advance bookings virtually covering the October 2007 production target of 50,000 units, Bajaj is now expanding capacity for the XCD to 75,000 units per month. The company hopes that this would eventually propel its overall motorcycles market share to about 40 per cent (from about 34 per cent in 2006-07).
Bajaj’s XCD is the company’s big move to graduate 100cc bike owners to 125cc technology. The company believes that the high volume 100cc segment, which accounts for nearly 60 per cent of the motorcycles market, is declining. Bajaj contends that the 125cc XCD offers the features of a 150cc bike and the mileage of a 100cc bike.
Meanwhile, rival TVS Motor has reportedly filed a Rs 250-crore defamation suit against Bajaj in the Bombay High Court. Nearly two months ago, Bajaj had accused TVS of infringing its patent for the twin-spark technology for small engines. Bajaj alleged that TVS was using its DTS-i technology on its latest bike, Flame. Shiraz Patodia of law firm Dua Associates, which represents TVS Motor, refused to comment when contacted by BT. However, Ravi Kumar, Vice President for Business Development, Bajaj Auto, told BT: “We have not yet been served with the legal papers. Once we get the papers, we will respond accordingly.” TVS plans to launch its 125cc variant, Flame, in December this year.
