The launch has been very important for Bajaj Auto, which witnessed its market share of Discover series reduce by half to 12 percent from 24 percent. This further impacted the company's motorcycle market share, which fell to 12.4 percent in Q1FY15 against 16.4 percent in Q1FY14.
In an exclusive interview to CNBC-TV18, Rajiv Bajaj, MD, Bajaj Auto , said the Discover 150cc has created a new category in the commuter motorcycle segment.
"Most commuter bikes today are 100 cc, while some are 125 cc. It is for the first time that commuters will have an option of a strong commuter motorcycle that offers 150cc performance," he said.
Bajaj said the company's ambition is to become a global player, thus it needs to narrow down its product focus in order to succeed globally.
"We have a global motorcycle marketshare of about 10 percent. I would like to believe that at 10 percent (marketshare) we have a lot of headway to grow by just staying with motorcycles," he said.
Moreover he said that at any point in time in future, which could be from 5 years or 20 years, if Bajaj finds itself to be at a "significant position" in the motorcycle space, "then one begins to feel that there is limited upside in terms of future growth just staying in motorcycles then perhaps we need a strategy to do something else and that might well be scooters at that point in time".
Below is the verbatim transcript of Rajiv Bajaj's interview with CNBC-TV18's Senthil Chengalvarayan, Sonia Shenoy and Anuj Singhal.
Senthil: How is the market looking from here, we just spoke to you after your results, what is the market you expect for these two models?
A: As I said before the Discover 150 really creates a new category in commuter motorcycles because most commuter motorcycles are 100 cc and there are some that are 125 cc. So, it is the first time that commuters will have an option of a strong commuter motorcycle brand that offers 150 cc performance. So when you create a category that doesn't exist it can be hard to predict numbers.
When we started with Pulsar as a sports bike in 2001 who could have said how far it would have gone. So I won't hazard a guess about the numbers but I would say qualitatively it is always nice when you can create a new category because then you are the first to market and that is a huge marketing advantage.
Senthil: The last time we spoke to you, not too long ago Latha asked you a question on scooters and you answered 'never say never', would you want to elaborate on that?
A: I don't think I said anything very different from what I have said over recent year, although I believe that led to a little bit of a controversy if I may say so after that. All I was saying is this and I have been consistent with that. So I have been consistent in saying this that first and foremost Bajaj's ambition is to be a global player and when you are a global player i.e. when you have a huge bouquet of markets to cater to, the right thing to do is to narrow your product focus. You can't sell everything to everyone all over the world. So it is like a sportsman, if you want to be the best in the world then he has to narrow his focus to one sport or even specialise within that sport.
So, in much the same way, in order that we are competitive globally we have narrowed our focus to just motorcycles within two wheelers. We have a global motorcycle market share of about 10 percent. Now, I would like to believe that at 10 percent market share we have a lot of headway to grow by just staying with motorcycle. There is no reason why 10 cannot be 15, 20 or 25 percent in the coming future because there are still many large markets such as those of the Association of Southeast Asian Nations (ASEAN) countries or Brazil where we are really not present.
When I said never say never all I mentioned was if at a point of time in the future it could be five years later,10 or 20 years later I can't say if Bajaj finds itself to be in a position where it is very significant and I can't put a number on that but all I can say is a very significant, very dominant in the motorcycle space such that one begins to feel that there is a limited upside in terms of future growth, just staying in motorcycles, then perhaps we need a strategy to do something else and that might well be scooters at that point in time. At this stage, at the current moment, at the present time when we have only 10 percent global market share, I don't think it is de-risking or any such initiatives to be in scooters. It is irresponsible, it is a distraction.
Anuj: For at least next three to five years you are saying that absolutely no chance that Bajaj is coming back into scooters, maybe after that?
A: I won't put a number to it. To be honest, all I would say is as much has been the case for the last six-seven years, we need a number of years before we can fulfill our motorcycling ambitions so to speak, including challenges that we face in our home market. So I don't see in the near future how this company can combat global competitions like Honda and Yamaha all over the world and still afford to be distracted by scooters. I don't think our resources are adequate to do both.
Anuj: This whole issue of market getting a bit fatigued by the Discover brand, it has been a great brand but for your new segments have you thought about maybe coming out with fresher names instead of just Discover 150 and some other rehash brands of Discover?
A: Companies that have strong brands are fortunate. In our case, we are fortunate to have a brand like Discover which is a strong brand as you say and a new brand is not just a new name as you almost implied. A name goes nowhere unless it has something special to offer. We are back to good old concept of Unique Selling Proposition (USP). So let's say for argument sake I called it by a new name, XYZ, the customer would still be looking at me and asking me what is this got to offer that I cannot get from a Splendor or a Passion or Yuga or Neo or a Discover or Platina and I still have to answer that question as a salesman at the end of the day.
So I don't think this is a name game, this is a strategic game where you have to create a unique position, USP, a differentiator, a perceived position that only you own and therefore that is what we are seeking to do with the Discover. I have never bought into Sonia's contention as she knows that Discover may suffer from having too much choice because quite frankly whether you are buying toothpaste, soap, televisions or mobile phones we all know that rightly or wrongly we are confronted with bewildering choice when we enter the showroom. That doesn't mean that Samsung or Sony are selling less than what they used to and I can go on to tell you if you would like to know what the problem is, but I don't think the problem is what you think it is.
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