Spending
'Hamara Bajaj' making comeback in Scooters!
As expected, Bajaj Auto is re-entering the scooter segment after five long years. According to reports, the company is making a comeback with its iconic ‘Chetak’ in a new, modern avatar
 
Bajaj Auto Ltd, the company famous for its 'Priya', 'Chetak' and ‘Super’ brands of scooters until last decade, which in 2009 decided to call it quits for scooters, is now making a comeback in the segment. According to Autocar India, Bajaj is working towards making a reentry into the scooter market with the 'Chetak' brand.
 
"It’s still early days, and no details are presently available about the upcoming new Chetak, which we guess should be seen by around the Indian Auto Expo 2016. We expect Bajaj will power the new Chetak with a four-stroke, single-cylinder and air-cooled engine, displacing somewhere in the region of 125-150cc. The new Bajaj powerplant can be expected to offer gearless ease, unlike old Chetak scooters," the report says.
 
This was bound to happen. In 2009, Rajiv Bajaj, managing director of the company, announced the company’s plans to exit the scooter segment by end of the fiscal year to focus exclusively on motorcycles in the two-wheeler category, as part of Bajaj Auto’s goal to become the world's biggest motorcycle maker in the future.
 
 
His father, Rahul Bajaj, who made the scooters popular with its 'Hamara Bajaj' campaign, was also saddened by his son's decision to exit from this segment. “I feel bad, I feel hurt," Rahul Bajaj had said at that time, but son Rajiv insisted that solutions should be drawn from logic more than emotions. "I care less for a solution from emotions, I believe more in the magic of logic," Rajiv Bajaj had said at that time.
 
"I can't say harm the company and its shareholders by doing something you should not do. But I am still not convinced. He (Rajiv) has tried to explain it (the move) to me," Rahul Bajaj said in a TV interview at that time.
 
The company that by and large created the scooter market in the country through its popular 'Hamara Bajaj' campaigns in 1980s and 90s, was selling just one scooter category—the 100-cc gearless ‘Crystal’ when it decided to exit the segment.
 
Rajiv Bajaj, while launching its 135-cc Pulsar bike in December 2009 had said, "We will exit the scooter market because we don't see much sense in it. If we are to be a motorcycle specialist, we cannot make scooters. Scooters did not sell according to our expectations. We are making hardly 1,000 scooters a month now and mostly for exports. Now our focus is on motorcycles."
 
 
At that time, I had said that one day the company will make a re-entry into the scooter segment, which was its bread and butter before it launched the Pulsar range of bikes. Near the end December 2009, I wrote, "In effect, the scooter segment of Bajaj seems to have died an unnatural and untimely death mainly due to lack of support from the family. But looking at the company's—especially Mr Rajiv Bajaj's stance in the past—I wonder if it will start making and selling scooters again. After all, not so long ago, Bajaj did an about-turn on its decision to exit from the 100-cc motorcycle segment after failing to catch up with market leader Hero Honda, after the success of Bajaj's higher-end models like the ‘Pulsar’. In July 2009, Bajaj re-entered the 100cc motorcycle segment with a better product in its 'Discover'."
 
India's market is divided roughly into two categories, urban and rural, depending on the needs and resources of consumers in these areas. For example, pricing and fuel efficiency matters most for rural consumers whereas the urban consumer would prefer more power and style in a motorcycle.
 
In an effort to capture the younger, tech-savvy urban consumer market, Bajaj ignored the rural market and had not launched any new variant in the 100-cc motorcycle segment since 2007 till its re-entry in July 2009. These 100-cc motorcycles offer a better mileage at a lower cost compared with motorcycles in the above 100-cc categories and are therefore preferred in rural areas. 
 
Not to forget, after shifting focus to the Pulsar range, and thus ignoring entry-level bikes, Bajaj in January this year, re-launched its new Platina in 100-cc category with better mileage. This time, the company claims that the new Platina ES (electric start) gives a mileage of 96.9km per litre, the world's highest in this category. 
 
Therefore, it is not surprising that Bajaj wants to re-enter scooter segment. However, by focussing entirely on the motorcycle segment and thus ignoring scooter altogether Bajaj has lost a big opportunity. Remember, during all the slowdown, it is the scooter segment, especially variants from Honda Motorcycle & Scooter India Pvt Ltd (HMSI), the unit of Japanese Honda Motor Co Ltd had kept its volumes soaring. In fact, even today, there is a certain waiting period (varies from location to location and dealer to dealer, but about one month) for Honda Activa, which is now into its third generation mode.
 
Not only that, scooters made by Hero MotoCorp (erstwhile Hero Honda), TVS Motor Co Ltd, Suzuki Motorcycle India Pvt Ltd, Mahindra Two Wheelers Ltd and Vespa are also selling like hot cakes. In fact, it was the delay in delivery by Honda that seems to have helped others, especially Suzuki, TVS Motors and Mahindra to capture a significant market share. Unfortunately, Bajaj, the once the 'king of scooters', was nowhere in the picture.
 
So besides dwindling sales, what were the reasons for Bajaj to move away from the scooter segment? According to Veeresh Malik, consulting editor of Moneylife, one of the reasons could be inter-changeable spares between Bajaj scooters and its three-wheelers. Spares for Bajaj scooters were cheaper compared to its three-wheelers, and therefore often used by owners and mechanics. In addition, the spares for scooters, made by other manufacturers, were easily available across the markets thus depriving Bajaj the profit margin.
 
Nevertheless, much has changed since Bajaj decided to quit the scooter segment. At present, almost all scooters in the market are gearless, unlike the ones sold by Bajaj before its exit. And considering the difference in mechanism of geared and gearless engines, it makes more sense for Bajaj to re-enter the scooter market with a gearless variant. This way, the company can also ensure that scooter spares are unusable for its three-wheelers.
 
Coming back to number game, according to the Society of Indian Automobile Manufacturers (SIAM), in February 2015 scooter volumes jumped 18.8% to 3.70 lakh units from 3.12 units, same month last year. At the same time, motorcycle volumes declined 8.22% to 7.77 lakh units.
 
Even the cumulative figures between April 2014 and February 2015 are in favour of scooters. During the 11 months of FY2015, scooter volumes grew 26.6% to 41.1 lakh units, while motorcycle sales increased marginally 3.2% to 98.84 lakh units, data from SIAM shows.
 
Another interesting takeout from the SIAM report is that except Bajaj, all other two-wheeler makers are present across categories, be it Honda, Hero MotoCorp, TVS Motors, Suzuki or Mahindra. In short, by balancing their offerings in both scooters and motorcycles, these manufacturers are making sure to survive unexpected setbacks from each category. Since Bajaj exited from scooters, it did not have the same benefit and had to depend solely on motorcycle sales.
 
Hope the company had learned its lesson and would now make an effort to re-launch its iconic 'Chetak' by incorporating fresh R&D ideas and improved features like autogears, performance and better mileage. Remember, the absence of these factors had forced Bajaj to quit the scooter segment. One of the biggest factors in favour of the company is the Bajaj brand name and its ability to cater to customers across the country with its huge dealer network and service centres. In addition, Bajaj has the capability to surprise competitors with its ‘minimum margin, maximum volume’ strategy. In short, Bajaj needs to re-enter the market with a new ‘Chetak’ that has about 110cc engine, is spacious, gives a mileage of over 60kmpl and prices at around Rs45,000. This recipe can sure give Bajaj a foothold in the scooter market and help it regain market share. 
 
Will Rajiv Bajaj's 'magic of logic' comeback into its once 'famed' scooter segment make his father Rahul Bajaj smile again?
 
You may also want to read…
 
 
 
 

User

COMMENTS

MOHAN

2 years ago

Bajaj must come out with scooters with gears. Market is flooded with low mileage gearless scooters. I think a modern scooter with gears can boost up Bajaj sales and it will make Rahul bajaj smile again.

REPLY

Ganesh Johnson

In Reply to MOHAN 2 years ago

Totally flawed logic, that does not take into account the changed market demographics. Go to any scooter dealer today, and you see 16 and 17 year old boys and girls with stars in their eyes, who have dragged their mom and dad - to buy their FIRST scooter! This scooter has to be 100 (or so) CC, gearless, because thats all that a 16 year old is allowed to drive till he/she turns 18. That is the segment Honda captured perfectly, and Rajiv Bajaj was left watching helplessly. India's demographic is incredibly in favor of these 16 and 17 year olds who are being indulged by their doting parents who plonk 50 Thousand rupees and buy their boys and girls a trendy scooter. These kids won't accept another Bajaj clunker that needs heavy gear shifts. The market is for a smart, trendy, gearless scooter. Mr. Yogesh is perfectly correct about what the new Bajaj product should be!

Delhi Police may quiz Mehr Tarar in Sunanda Pushkar death case
Sunanda Pushkar was found dead a day after she was involved in a spat with Pakistani journalist Tarar on Twitter over the latter’s alleged affair with Shashi Tharoor
 
Delhi Police investigating the Sunanda Pushkar death case on Thursday said it may question Pakistani journalist Mehr Tarar over whom she fought with her husband Shashi Tharoor before her death last year.
 
Delhi Police Commissioner BS Bassi said Tarar may be questioned, if required, as she may throw light in the case.
 
“If required, we will speak to her as she is a relevant person who can throw light in the case. Our efforts will be to talk to her,” Bassi said when asked whether the SIT probing the case will examine her.
 
Sources in the police said a formal request may be sent to her through “official channels” to join the investigations.
 
Tarar had two months back said she was ready to answer any question on the issue.
 
“If they want to ask me anything...If they want to ask me any question whatsoever that they think...I can answer,” 46-year-old Tarar had said a day after Delhi Police had registered a murder case into Sunanda’s death.
 
52-year-old Sunanda was found dead in her suite at a five-star hotel in south Delhi on the night of 17 January 2014, a day after she was involved in a spat with Tarar on microblogging website Twitter over the latter’s alleged affair with Tharoor.
 
Tharoor was questioned by the investigators last month.
 
Bassi said investigators have also asked the Federal Bureau of Investigation (FBI) in the US to complete examination of Sunanda’s viscera as soon as possible.
 
A senior police official had gone to the US to give the sample of Sunanda’s viscera to the FBI.
 
The investigators want to confirm the kind of poison found in Sunanda’s body by a panel of doctors from AIIMS.
 
The AIIMS report could not find out the kind of poison in her body.
 
“We had told them (FBI) to do it as early as possible. They follow certain procedures and processes. So it may take some time,” Bassi said.
 
He said, if required, Tharoor will “definitely” be called for questioning again.
 
He said certain gadgets obtained by the investigators are also being examined. 

User

NSE finds ‘serious liquidity concerns’ with some brokers
NSE said some of the members were not adhering to the requirement of settling client accounts once a month or a quarter, as desired by the investor 
 
The National Stock Exchange (NSE) said following an inspection, it came across some 'serious liquidity concerns' in case of certain brokers. The Exchange conducted routine inspection of actual settlement of client accounts, but said this time there were large number of complaints against some members from investor for non-receipt of funds and securities.
 
Without disclosing the names of the concerned brokers, the NSE, in a circular (Ref.No. 223/2015) issued to all members said that some of them were not adhering to the requirement of settling client accounts once a month or a quarter, as desired by the investor.
 
“It is also observed that the funds available with the Member were reported to be short of the amount payable to the clients as per the settlement cycle, which indicates serious liquidity concerns,” the Exchange said, while warning the brokers of serious action for lapses on their part.
 
“In the recent past, the Exchange has also received large number of investor complaints for non-receipt of funds and securities against some Members,” it added.
 
As per SEBI guidelines for Settlement of Client Accounts, the Exchange regulations require “clear segregation between client funds and securities with that of the Member and the permissible purposes for which the funds and securities can be transferred from client accounts.
 
The brokers are also required to settle the client accounts once a month or a quarter, as per the consent obtained from the client.
 
“Members may appreciate that the facility of running account is provided for operational convenience and should be used responsibly and judiciously. However, it is observed during Exchange-conducted inspections and the half yearly internal audits conducted by member-appointed Internal Auditors that some Members are not diligently adhering to the requirement of settling client accounts once a month or quarter as per the consent of client,” the NSE circular said.
 
The Exchange has asked its members to ensure that the funds and securities available in the client accounts, together with balances available with the clearing member and funds with clearing corporation, are not less than the funds and securities payable to the client at all times.
 
“Members are also advised to reconcile client beneficiary accounts and the register of securities on a quarterly basis and maintain complete audit trail and documentation of such reconciliation.
 
“Any discrepancy between amounts, securities payable to clients and the actual balances available in client’s bank and beneficiary accounts together with the balances available with clearing member or clearing corporation and any instance of actual settlement not done shall be viewed very seriously,”  NSE said.
 
The Exchange has directed all members to ensure compliance to this circular.

User

COMMENTS

VGANESAN

2 years ago

My understanding is this one and corporate espionage and fedrate hike and grossly overvalued market will trip our market. ONce nifty breaks 8400 with good volume next target is 7500 similar to year 2000 and 2008

Vaibhav Dhoka

2 years ago

As market get heated up brokers use different tricks to downplay liquidity concern.In my case I have trading account with Religare.It was POA account which was immediately withdrawn back I sold some securities and its payment was due on 3rd day.As I didn't receive payment I wrote to broker as well SEBI. The payment was received after this,I demanded interest @21% as brokers charge their client,broker refused so as NSE who was reference from SEBI. This is state of affair here.Investor is never heard.

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)