CorporateBajaj rejigs portfolio, phases out two bikes in three months
Bajaj Auto, the country’s second largest motorcycle manufacturer, has quietly discontinued two of its flagship products in the past three months to make way for more expensive models.
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The Pune-based company has discontinued the XCD 125, an executive segment motorcycle launched in September 2007, to make way for a model with a slightly bigger engine. This is the second model it has phased out within just three months. It also stopped producing the Pulsar 200, a premium segment motorcycle.
The XCD 125 has been replaced with a slightly more powerful version of the same brand called XCD 135, launched this January. The latter is Rs 4,000-5,000 costlier and produces 10 per cent more power.
Although the company did not initially expect severe cannibalisation of XCD 125, it was forced to re-think after demand for it fell to alarmingly low levels of under 20,000 units a month against the targeted 50,000 units a month. The XCD 135, however, sold 10,000 units in the first two weeks after the launch.
A Pune-based Bajaj Auto dealer said, “The XCD 125 was sold for Rs 46,000, while the XCD 135 is sold for Rs 49,000 (after a cash discount of Rs 2,000). The new bike has proved to be more fuel-efficient, despite the increase in engine size.”
Similarly, the Pulsar 200, one of many forms of the Pulsar brand created by Bajaj Auto and launched in January 2007, was discontinued after the price of the new Pulsar 220 was found to be too close to it. Bajaj had slashed the price of the Pulsar 220 by as much as Rs 15,000 after it launched a face-lifted version of the bike in June. The new price was Rs 70,000, the same as the Pulsar 200.
“Bajaj had launched too many models in the market without many differentiating factors between the bikes. The company always had the option to lower or even completely stop the production of one bike and increase the other, depending on the demand,” said a city-based analyst tracking the company.
According to senior executives at Bajaj, the company now wants to concentrate on promoting only the Discover and Pulsar brand in the entry to premium segment in the domestic market, while also containing other brands like XCD, Platina and Avenger in the process.
After the rejig in the product portfolio, Bajaj Auto now has nine models — Discover (100) Platina, XCD 135, Discover 135, Pulsar 150, Pulsar 180, Pulsar 220, Avenger and Kristal, down from 11 models earlier.
The now phased out XCD 125 was positioned as an alternative to the traditional 100cc bikes from Hero Honda, pricing it on par with the models of the market leader.