Bike makers rework strategy for the difficult road ahead
Declining sales and sliding margins are compelling two-wheeler makers such as Bajaj Auto, Hero Honda and TVS Motors to rejig strategy, to cope with the slowdown.
Declining sales and sliding margins are compelling two-wheeler makers such as Bajaj Auto, Hero Honda and TVS Motors to rejig strategy, to cope with the slowdown.
Bajaj Auto, the country’s second largest two-wheeler manufacturer, hopes to make magic by offering customers a value-added machine with more power (125 cc) but the same mileage of a 100 cc bike, but at a price much lower than that would be charged for a bigger bike.
Bajaj expects that its new 125 cc Exceed, to be launched next month, will revive sales and turn things positive in the next six months. “the future of the company depends on this bike,” Bajaj Auto Managing Director, Rajiv Bajaj, said in an interview recently.
Bajaj has announced a passenger car project with French car maker Renault that may hedge its dependence on two-wheelers. But that will take some time as the project is expected only by 2011.
Bajaj has said that it would make the engine for the car, which will be manufactured by Renault. This is probably the first time that a foreign auto company will have a technology tie-up with an Indian company and not vice-versa.
Till then, Exceed will have to work the magic. The company hopes to sell over 50,000 bikes monthly, which is more than 40 per cent of its total current sales. And, of course, the new bike offers better margins.
“Since the production cost of the bike will be the same as our 100cc bike Platina, we hope to attain far better margins, as the price of Exceed will be Rs 6,000-7,000 more than Platina, thereby allowing us a profit margin of around Rs 4,000 on every bike sold,” Rajiv Bajaj said.
The 125 cc bike aims to attract customers from the economy bike (100 cc) segment with an upgraded product at a marginally higher price.
“We have found that people would not mind paying that extra Rs 7,000 for a bigger capacity bike which would deliver a mileage of a 100 cc,” said S Sridhar, Bajaj Auto CEO (two-wheelers). At about Rs 40,000 to Rs 42,000 it will be about Rs 4,000 to Rs 5,000 cheaper than the 125 cc Discover model.
Bajaj will also lower its focus in the low margin 100 cc segment.
“We are now focusing on the middle (125 cc) and upper (+125 cc) one third of the pyramid as we are making very little or no money in the huge segment of 100 cc which has also witnessed a fall in sales year-on-year,’’ said Rajiv Bajaj.
“Real margins are actually coming from the Pulsar segment. We have just 24 per cent market share in the 100 cc segment,” he added.
Hero Honda, however, will not walk out of the 100 cc segment which constitutes the bulk of its sales. The company says an aggressive plan is underway to push the product in rural India and woo the bicycle owner to go in for an economy bike.
While officials refuse to divulge details about new bike launches, market sources suggest that the company is upgrading its new models (and charge only about Rs 1,000 to Rs 1,500 more) and will get aggressive in the +150 cc bike segment while also launching an economy bike (perhaps a 100 cc).
The company maintains that it has done better in maintaining its inventory and production.
A key decision was to delay the launch of its new plant in Haridwar. The plant was supposed to go on stream producing over 1.5 million bikes, but now the launch has been postponed by a year. That means it will not be forced to dump products in the market.
Like Bajaj Auto, it is also hoping that the festive season will give it a reason to smile and it is also working out special finance packages to woo buyers.
“Our recent launches, including Splendour NXG, refreshed Pleasure, Passion Plus and Super Splendour have been received well in the markets,” said Anil Dua, vice president (marketing and sales), Hero Honda Motors.
“Our approach is to strengthen our brands, to bring in new products, support them with extensive communication and leverage the Hero Honda brand.”
Down south in Chennai, TVS Motors aims to create new excitement with nine new launches in various segments by March 2008, through which it hopes to regain volumes.
The company is also planning to foray the three-wheeler market to reduce its dependence on two-wheelers.
New models include a high volume entry level motorcycle (100 cc) along with an executive segment bike (+125 cc category), a scooterette, an electric scooter, besides two- and four-stroke three wheelers.
The company hopes to generate about Rs 70 crore from projected sales of 10,000 units in the first year of the three-wheeler operation. To ensure that it can make big bikes above 150 cc, TVS has also set up a 140-strong research and development team which is working on high-end bikes.
This high-margins segment has been growing faster than the total market. It is also pushing exports to tide over the decline in domestic sales.
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E4M Our strategy is to target younger audiences through Sports: Rajiv Dubey, Dabur
The Head of Media at Dabur India spoke exclusively to exchange4media on the World Cup, associating with Indian Idol, the company’s digital spending and much more
With quirky campaigns, memes and moment marketing, timed with the ongoing World Cup and particularly the India-Pakistan matches, Dabur India has got considerable consumer attention for its popular brands – Red Paste, Cool King Hair Oil, Chyawanprash, Dabur Vita and the recently launched Bae Fresh Gel toothpaste.
The 140-year-old company is going big on key sporting events, World Television Premiere (WTP) movies and reality shows. It is now gearing up to become the title sponsor of popular talent show ‘Indian Idol’ on Sony TV for the first time, shared Rajiv Dubey, who leads the media strategy at Dabur.
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ShareSwapan Seth's new book 'COOL' is out
The book is a reflection of the author's 'eclectic taste across categories'
Advertising professional and art collector Swapan Seth has announced the launch of his new book COOL. The book is described as "a ready reckoner to the hip and the happening, of the known and the very unknown."
The book is a reflection of the author's "eclectic taste across categories: from boltholes to exotic hideaways."
COOL has been published by Simon & Schuster India and is available on Amazon.
Seth is an ad veteran with a long and illustrious career in the industry. He became the youngest-ever Creative Director at Clarion at age 24. He was VP at 26 at Trikaya Grey. Two years later, he started his agency Equus.
He writes for publications such as The Economic Times, Hindustan Times and India Today. This is his second book and he has previously published THIS IS ALL I HAVE TO SAY.
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Disney Star signs 9 sponsors for Asia Cup PAK
Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up come on board
e4m Staff Disney Star has signed nine broadcast and digital streaming sponsors for the upcoming Asia Cup.
Charged by Thums Up, Nerolac Paint+, Amazon Pay, Jindal Panther, My11Circle, MRF, Samsung Galaxy Z Flip5, Wild Stone and Thums Up have come on board for the upcoming tournament.
As reported earlier by exchange4media, Disney Star has sought Rs 26 crore for the co-presenting sponsorship on TV and Rs 30 crore for Disney+ Hotstar.
According to industry sources, the associate sponsorship on Star Sports has been priced at Rs 19.66 crore, whereas for the ‘powered by’ sponsorship on Disney+ Hotstar, the broadcaster is seeking Rs 18 crore.
As per the information available with exchange4media, Disney+ Hotstar has three sponsorship tiers-- co-presenting (Rs 30 crore), powered by (Rs 18 crore) and associate sponsorship (Rs 12 crore). The broadcaster is offering an estimated reach of 120-140 million for co-presenting sponsors, 90-100 million for powered by and 60-70 million for associate sponsorship.
A spot buy for 10 seconds has been priced at Rs 25 lakh for the India vs Pakistan matches, while for the non-India matches, the ad rate for 10 second is Rs 2.3 lakh. The India matches plus the final for ODIs has been priced at Rs 17 lakh per 10 seconds.
Asia Cup is scheduled to be held from 30 August, 2023, to September 17, 2023.
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Sorted 360 wins creative & social media mandate of Reliance Mall
The agency will manage offline and online campaigns for Reliance Mall
Sorted 360, an integrated creative and social media agency, has won the mandate to providing brand solutions for Reliance Malls across India.
“Sorted 360 is set to enhance Reliance Malls' market presence with their unparalleled creative prowess and strategic thinking,” read a press release.
“Sorted 360's commitment to pushing the boundaries of creative communication aligns perfectly with Reliance Malls' ethos. With a pan-India presence spanning across 19 cities and growing, Reliance Malls has consistently captivated customers by offering an array of Reliance brands and third-party fashion & lifestyle brands. The mall has established an unparalleled connection with its patrons through superior quality, a remarkable value proposition, and an unmatched shopping experience,” it read further.
"We are thrilled to welcome Sorted 360 as our trusted partner in advancing our brand presence across the nation," said the Head of Marketing at Relaice Malls. "Their proven expertise in retail, shopping center management, and innovative creative strategies make them the perfect fit for our vision."
"Partnering with Reliance Malls is a testament to our commitment to shaping extraordinary brand experiences," remarked Prerana Anatharam, Co-founder of Sorted 360. "We are excited to leverage our strategic and creative acumen to further elevate Reliance Malls as the epitome of convenience, choice, and excellence."
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KlugKlug onboards Hemang Mehta as Country Manager for Indias
Mehta was most recently Head of Agency Relationships at Network 18 Media & Investments
KlugKlug has appointed Hemang Mehta as its Country Manager for India.
Mehta will play a pivotal role in driving KlugKlug's growth and expansion within the Indian market and be responsible for Sales & GTM Strategy
Prior to that, he has also represented organisations like Exponential (now VDX.tv), India Today Digital and Rediff.com. His expertise spans various domains including digital media sales, mobile marketing, media planning, and buying, social media marketing, and more.
Hemang Mehta expressed his enthusiasm about joining KlugKlug, saying, "I am thrilled to be a part of KlugKlug, a forward-thinking platform that is reshaping the influencer marketing landscape. As much as I look forward to collaborating with the exuberant team at KlugKlug, I am super excited to interact with the brands to deliver powerful data-backed Influencer solutions that will guarantee business outcomes."
Commenting on the appointment, Kalyan Kumar, Co-Founder and CEO of KlugKlug, stated, "We are excited to welcome Hemang Mehta to our team as the Country Manager for India. His extensive experience in digital media sales and marketing will be instrumental in driving our efforts to provide influencer marketing solutions to our clients. We believe Hemang's leadership will be key in scaling our operations and expanding our reach within the Indian market."
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