Hamara Bajaj to fade into oblivion

Scooters have not been selling according to Bajaj Auto’s expectations. The company is making hardly 1,000 scooters a month now—mostly for exports—and now wants to focus only on motorcycles

Bajaj Auto, once known for its scooters which revolutionised the two-wheeler market in the country, on Wednesday said that it will exit the segment by the end of the fiscal to focus exclusively on motorcycles, reports PTI.


The company that by and large created the scooter market in the country through its popular 'Hamara Bajaj' campaigns in the 1980s and 90s, today sells just one scooter category—the 100-cc gearless ‘Crystal’.


"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,” Bajaj Auto managing director Rajiv Bajaj told reporters in New Delhi at the launch of its 135-cc Pulsar, targeted at the mass-market audience.


"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," he said and added that the company wants to become the largest motorcycle player in the world, without giving any specific time-frame.


"One day, God willing, we will be the largest motorcycle company in the world. If we have to be a motorcycle specialist, we have to make a sacrifice (in the scooter segment)," he added.


According to the Society of Indian Automobile Manufacturers (SIAM), Bajaj Auto sold only 154 units of its Crystal scooter in November 2009 and exported 104 units. Its total domestic scooter sales during the April-November period were 3,356 units and 728 units overseas.


Mr Bajaj said that the company has a production capacity of 3 million bikes annually. "In the 30-million global bike market, the world\'s largest bike maker Honda sells 7 million units. We can make 3 million units. We can double it and triple it by just staying in the motorcycle market," he said.


The company today launched its 135-cc Pulsar, priced at Rs51,000 (ex-showroom, Delhi). As part of its strategy to expand in the bikes segment, the company is developing high-end versions of its Pulsar brand. "We can go for a Pulsar 400-cc or a Pulsar 500-cc. We are already in the process of developing such bikes and our R&D teams are at work (on these projects)," Mr Bajaj said, without divulging details.


The company’s Pulsar portfolio includes the 150-cc, 180-cc and 220-cc versions besides the 135-cc bike launched today.


The company has also decided to phase out its model 'Exceed' and has already stopped its production, Mr Bajaj said.


On the sales front, Mr Bajaj said that the company was looking at a sales figure of 1.8 million units this fiscal. Bajaj Auto sold 1.2 million units last year.

"With the launch of the new 135-cc Pulsar, we expect the monthly sales of the Pulsar family to reach 75,000 units from January. Besides, we are already selling 80,000 units of ‘Discover’ every month," said S Sridhar, chief executive officer for two-wheelers, Bajaj Auto.


The company is also going ahead with a distinct branding exercise for its three-wheeler segment offering.


"Since July this year, we have been marketing our three-wheelers under the brand 'RE', denoting reverse engine. So RE will now be our brand for commercial vehicles," Mr Bajaj said, adding that RE will, however, not be a separate company.

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    1 decade ago

    Honda scooters are sold at Premium and waiting period of 4+ months.I am user of Bajaj scooters for 25+ years.Bajaj's argument of not able to market scooters is NOT digestable.

    Activists seek stay on Mumbai skywalks

    Skywalks, or foot over-bridges, are an effort to give pedestrians much-needed space to walk as more and more footpaths were disappearing across the city. This phenomenon, coupled with the paucity of subways, necessitated the construction of these skywalks

    Agitated over the construction of skywalks across the Mumbai Metropolitan Region (MMR), an activist had filed a public interest litigation (PIL) in the Bombay High Court against authorities like the Maharashtra State Road Development Corp Ltd (MSRDC), Mumbai Metropolitan Regional Development Authority (MMRDA), Maharashtra Government and the Brihanmumbai Municipal Corporation (BMC).  

    MMRDA, which has planned 50 skywalks, or foot over-bridges, is keen on adding more to the number. It has allocated Rs6 billion for the skywalk project and there are proposals to have shopping plazas on some of the walkways as well.

    According to the PIL, there is no justification for increase in the cost of construction of skywalks especially when the price of steel has gone down from about Rs48,000-Rs52,000 per tonne to Rs24,000-Rs 22,000 per tonne. The authorities have also reduced the width of the skywalks as no shops or hawkers are to be permitted on these constructions.

    The design of skywalks may have to be revised as the width of the skywalks is to be reduced on account of no hawkers and shops being permitted thereon, but no fresh tenders have been invited for construction of such skywalks by the authorities. If such tenders are invited, then construction would be done at marginally lower costs, the PIL said.

    In the absence of detailed guidelines, the proposal for construction of skywalks in different areas is entirely as per the wishes of the concerned authorities and local representatives, the PIL claimed. It said that, often, after visiting the site, the local representatives have merely made an oral request over the telephone to the authorities about their desire to construct the skywalk in a particular area.

    The activists are seeking to stop or stay further construction of skywalks in the MMR without amending the sanctioned development plan prescribed under the MRTP Act, till the final hearing of their litigation.

    Skywalks are an effort to give the pedestrian much-needed space to walk as more and more footpaths were disappearing and there are very few subways available. Especially on the roads that lead to various suburban railway stations, these proposed skywalks would have given pedestrians much-needed freedom from roadside hawkers and the incessant honking of bumper-to-bumper traffic in congested areas. But these structures had become controversial following allegation of large-scale corruption in their construction. Even Vasant Davkhar, then deputy chairperson of the Maharashtra Legislative Council, had made serious allegations in June 2009.

    Although the government promised an investigation, there is still no update on the same.

    In July, Moneylife had written about the sky-high cost of these skywalks. See http://suchetadalal.com/?id=17d7467e-5407-14fa-4a5453e09771&base=sections&f&t=Mumbai%3A+The+Great+Skywalk+Rip-off

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    Sensex sheds 102 points, closes at 17,125

    The Sensex closed at 17,125—102 points down from the previous day’s close—while the Nifty declined 36 points, ending the day at 5,112.

    During the day, auto stocks surged on the back of robust sales figures for November 2009. Bajaj Auto rose 2% on reports that the company’s total vehicle sales rose 73% to 2.76 lakh units in November 2009 over November 2008.

    Motorcycle sales jumped 84% to 2.42 lakh units. The company has also launched a 135-cc Pulsar, pushing the Pulsar brand into the mass segment. Bajaj expects to sell a minimum of 30,000 units per month of the new Pulsar model. The automaker had recently refreshed the entire Pulsar lineup and expects total Pulsar sales to cross 80,000 units per month.

    Maruti Suzuki India rose 3% after Japan’s Suzuki Motor said that it will sell a 19.9% stake to Volkswagen (VW) for $2.50 billion and use half of the proceeds to buy shares in the German automaker, as the two firms form a formidable force in the auto industry. Suzuki has a 54.2% stake in Maruti Suzuki India. Maruti’s total vehicle sales rose 66.60% to 87,807 units in November 2009 over November 2008. Domestic sales shot up 60.10% to 76,359 units, while exports surged 128.60% to 11,448 units in November 2009 over November 2008.

    Hero Honda Motors was up 2% on reports that the company’s total vehicle sales jumped 32% to 3.81 lakh units in November 2009 over November 2008.

    Mahindra & Mahindra will reportedly launch its first truck under a joint venture (JV) with Navistar, North America’s largest commercial truck maker, next month. The stock remained flat.

    Reliance Industries Ltd (RIL) fell 1% after the company said it has no plans to buy any debt of LyondellBasell.

    ICICI Bank has launched a home-loan scheme under which 8.25% interest rate will be fixed for the first two years. The floating rates will apply after two years and these rates will be applicable to loans sanctioned between December 2009 and January 2010. The stock declined 2%.

    Kotak Mahindra Bank also announced its new home loan scheme. It has 8.49% fixed rate on home loans for 30 months from the date of the payout of the loan. The stock fell 2%.

    After trading hours, there were news reports that Punjab National Bank had sold 26% stake in PNB Housing Finance to Destimoney for Rs79 crore. As per reports, Destimoney will hold total 49% stake in PNB Housing Finance and is expected to buy additional 23% stake via convertible bonds. The stock remained flat.

    Infomedia 18 gained 3% on reports that the company has approved a 3:2 rights issue at Rs33.50 per share which will open on December 29, 2009 and close on January 15, 2010.

    As per media reports, Standard Chartered Bank has extended a $1 billion (Rs4,600 crore) line of credit to Essar Oil to part-finance its acquisition of Royal Dutch Shell’s refinery assets in Europe. The stock ended flat.  

    The initial public offer (IPO) of JSW Energy was subscribed 1.65 times on the last day of issue today, 9 December 2009, whereas the IPO of Godrej Properties was subscribed 1.23 times on the first day of the issue. The price band is fixed at Rs490-Rs530 per share which will close on 11 December 2009.

    According to finance minister Pranab Mukherjee, the government does not need to borrow more than planned to fund its additional proposed expenditure. The government said on Tuesday that it would seek Parliamentary approval to spend an extra Rs25,725 crore ($5.5 billion) for the fiscal year to end-March 2010. The gross additional expenditure would be Rs30,943 crore, of which Rs5,217 crore would be met through savings, the government said. The government will spend an extra Rs3,000 crore on fertiliser subsidies and Rs3,460 crore on food subsidies. The government would also spend Rs800 crore on an equity infusion in State-run carrier Air India.

    Sridhar Sivaram, ED, Morgan Stanley said that there could be a correction in January if interest rates actually go up. However, if growth continues, markets could continue to move up, he said.

    Meanwhile, the Reserve Bank of India (RBI) may reportedly ask banks to impose a ceiling on their investments in mutual funds and also prescribe norms for such investments, as it attempts to tighten rising exposure and rein in deployment of banking funds indirectly in sectors or companies to which banks could not lend directly due to exposure limits.

    According to data from the Society of Indian Automobile Manufacturers, car sales in India rose an annual 61% to 1,33,687 units in November 2009 over November 2008.

    Sales were boosted by improved consumer sentiment, easier availability of loans and a low sales base a year earlier, an industry body said. Sales of trucks and buses, a gauge of economic activity, doubled to 40,847 units in November from 20,631 a year earlier, data showed.

    During the day, Asia’s key benchmark indices in China, Hong Kong, Japan, Singapore and Indonesia fell by between 0.21%-1.73%, and indices in South Korea and Taiwan rose by between 0.37%-0.39%.

    China’s Industrial Bank Co. said its shareholders had approved its plan to raise CNY18 billion in a rights issue to boost the lender’s capital adequacy ratio and support rapid lending growth over the next few years. China is experiencing a clear V-shaped economic recovery, said Zhu Min, vice-governor of the People’s Bank of China.

    As per reports, Fitch Ratings Inc. cut Greece’s rating to BBB+ with a negative outlook. Meanwhile, Moody’s Investors Service downgraded the credit worthiness of a number of Dubai government-controlled companies and said further downgrades were possible. Japan’s gross domestic product rose at an annual 1.3% in the September quarter, slower than the 4.8% reported in preliminary figures last month, the Japanese Cabinet office said.

    As per media reports, UK banks HSBC Holdings, Standard Chartered, Lloyds Banking Group and Royal Bank of Scotland have agreed to reschedule Dubai World’s debt. According to Dubai’s Al Bayan newspaper, the four banks have asked for more information from Dubai World about interest on the planned delayed payments and will hold a meeting later this month as they await a response. Reports further said that Dubai World is seeking to restructure around $26 billion of debt.

    On Tuesday, 8 December 2009, the Dow Jones Industrial Average was down 104 points while the S&P 500 was down 11 points and the Nasdaq Composite was down 17 points.

    In premarket trading, the Dow was trading 26 points higher.

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