Archive for the ‘Automotive’ Category
Bajaj plans maiden car in Rs 2-5 lakh range
Bajaj Auto, India’s second-largest two-wheeler maker, plans to price its first car between Rs 2 lakh and Rs 5 lakh. A concept vehicle will be showcased in January 2008 at the annual auto show.
Describing the offering as a “four-wheel passenger vehicle”, rather than a small car as commonly assumed, managing director Rajiv Bajaj clarified that it would not be within the Tatas Motors small car price tag of Rs 1 lakh. “We are aiming to come up with a concept passenger vehicle by January 2008, and if the response is good it will take us three years to go in for commercial production,” he added.
As a starting point, Bajaj said the company is working on the commercial launch of a four-wheel goods carrier by 2009. “The engine and transmission and the platform that we build will be the basis for our passenger vehicle,” he said.
He also said that the main reason to opt for a goods carrier to start the group’s foray into four-wheelers instead of a passenger vehicle was that it did not have much competition. The company has earmarked Rs 750 crore for a four-wheel production plant to manufacture 40,000 to 50,000 vehicles annually.
Bajaj will join the dozen-odd entrants to enter the 1.2 million passenger car market that is growing at 10 to 12%. Small cars (less than 1,000cc) account for 60% of domestic sales.
Bajaj said that apart from Tata Motors, no one in India is ahead in the race to develop a cheap passenger vehicle. “It does not matter whether you are the twenty-first entrant or the twenty-fourth entrant in the passenger vehicle market, the key thing is to have a differentiated product that people will buy,” he said.
The small car market has attracted the attention of a lot of players. Tata Motors is expected to showcase its small car in the same auto expo, and industry expects that the car would be rolling in the market by the middle of the year. The company aims to sell over a million cars and will surely play on price. Renault-Nissan have also talked about a possible passenger car which will be priced below $3,000. Top end car makers like Honda, Toyota and General Motors have all announced a range of cars which will be below the Rs 5 lakh mark.
Many experts feel that with cars available at rock bottom prices and second hand car prices falling dramatically, two-wheeler, especially motorbike, sales could get adversely effected as aspirational levels of consumers move up.
Bajaj reiterated that consumers are not looking for the “cheapest product” but a vehicle that would offer them value and innovation. “We are working on all the key criteria needed in a four wheel passenger vehicle — good mileage, performance and cost,” he said.
While Bajaj made it clear that the company is not shifting its focus from two wheelers, which it thinks would continue to grow for 20-25 years, he is also not ready to be “caught in the wrong foot” should there be a shift to four wheelers. “We were caught unawares when the market shifted from scooters to mobikes. We don’t want to be in the same position again,” he said.
