Bajaj Auto plans to scale back the variety of entry-level fashions within the bike market by a 3rd because it seeks to sharpen its portfolio and cut back the working capital burden on its sellers, the corporate’s high officers mentioned.
“We’re within the technique of sharpening our product portfolio,” Rakesh Sharma, govt director of Bajaj Auto, advised Enterprise Customary, including that the transfer will embrace lowering the variety of choices no less than by one-third. “A really excessive variety of variants add to the working capital burden of the sellers,” Sharma mentioned.
“We haven’t obtained any such communication from the corporate as but, but when they’re contemplating this it can certainly be a giant aid as sustaining such a big SKU (inventory maintaining unit) is a headache for us,” mentioned a Bajaj Auto seller.
The Pune-based firm sells the Platina and CT manufacturers within the entry-level (100-110cc) phase. Between the 2 manufacturers there are a couple of dozen variants, that are differentiated by sort of brakes, wheels, and begin expertise, amongst others.
The entry-level or the mileage phase has been the stronghold of market chief Hero MotoCorp, which sells the Deluxe, Ardour and Splendor fashions.
On again of recent mannequin launches and an aggressive pricing, Bajaj has been gaining floor. Its share within the phase elevated to 15.5 per cent in monetary 12 months 2020-21 from 14.three per cent a 12 months in the past. It offered over 110,000 models of its two manufacturers in FY20, the corporate mentioned on Wednesday.
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For the reason that outbreak of the Covid-19 pandemic, demand for cheaper bikes has gained traction due to an aversion to public transport. Bikes gross sales have been bettering sequentially and have reached 80-85 per cent of pre-Covid ranges in July for many companies.
Whereas Hero has seen demand for such fashions advance at a brisk tempo in rural India, Bajaj has seen demand rise in city markets, mentioned the Bajaj seller cited above.
“We’re seeing a brand new set of patrons emerge. All those that by no means owned a motorbike are coming into the market as they don’t wish to use public transport,” he added. In the meantime, gross sales of pricier manufacturers comparable to Pulsar have taken a knock its core goal group, college-goers, stay confined to properties as instructional establishments are shut due to the pandemic. Gross sales have additionally been impacted by the rise in costs due to the shift to BS-VI, he added.
In the meantime, regardless of the pandemic and the weakened buying energy, Bajaj’s Sharma mentioned there isn’t any pattern amongst patrons “to downshift” or choosing cheaper fashions. Wherever the general proposition is robust, fashions are promoting and vice versa. It’s relevant throughout the phase, he added. The share of the Pulsar model in firm’s complete gross sales rose to 50 per cent in Q1FY21 from 40 per cent a 12 months in the past.
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