There is a top gear race in the two wheeler market between Hero Honda and Bajaj. The track is 100 cc segment wherein Hero Honda has been the stalwart for years. But the track is assisting well for Bajaj now that whatever share that Hero Honda slipped down(around 6%) has been wrapped by Bajaj. Hero Honda rules the rooster with its premium brands in 100 cc, Splendor [images] and Passion [images] but Bajaj had the gunshot in the form of its Discover 100cc [images]. the sale volume for the 100 cc bikes during the second half of the 2009-10 was an addition of 33264 units a month, than those of the first half. In the period when Hero Honda faced a fall, Bajaj’s sale grew with a volume of 34867 monthly units, much prior to the launch of its Discover.
While there was no instant reply from the Hero Honda sources, the CEO for Bajaj two wheelers said the company has witnessed a growth of 6% in 100 cc segment making the point to 23% in the phase of October 2009 to May 2010. Whereas Hero Honda’s sale tune was down from 69% to 64% during the said period. Bajaj admits that it has tasted the difference in the matter of profit too. The company plans to reduce the entry level share from the 42% found in 2009-09 to 16% currently for more profitability. Hero Honda’s shake is not only to the aggressive drive of Discover, but also due to the strengthening strategy of its sibling Hero Motorcycles and Scooters India. The industry experts anticipate a growth of 13% in the industry of which Hero Honda is expected to snatch 10% CAGR for the ensuing three financial years from 2010.
Hero Honda’s splendid run during 2008 and 2009 was merely due to the negligence of 100cc segment by Bajaj and TVS, making Hero Honda stablilize its share(from 48% to 64%). Came Bajaj’s Discover and the trend changed by becoming the third largest selling bike in the country. The Discover unearthed the hallow surrounded in Hero Honda 100cc products. The notion prevailing in the market, Hero Honda dominates in the rural sector, too would be broken since there is a smiling over Discover, for a change of fashion and style from this segment. The irony is Discover costs Rs4000 more than Hero Honda Splendor. But money does not matter for the playful customers.