Bajaj Plans Bigger Pulsar & KTM to Take on Rivals

India’s second-largest two-wheeler maker to come out with 350cc Pulsar next year

KETAN THAKKAR MUMBAI

Bajaj Auto, the county’s secondlargest two-wheeler maker, will launch bigger and more powerful Pulsar and KTM motorcycle models in the 200cc to 700 cc range over the next few years to take on rivals Honda, Yamaha and Suzuki and build on its leadership position in the premium motorcycle space.
Bajaj aims to position the Pulsar in the value-for-money sports bike segment and Austrian partner KTM’s motorcycles at the premium end of the market.
“We share the same development process with KTM, so you can expect there will be ‘a much bigger Pulsar’ next year, because we think the market is at an inflection point (at the premium end) and we are in a good position to take advantage with these two brands,” managing director Rajiv Bajaj said.
Bajaj said the company will come out with 350cc Pulsar next year and it is exploring even bigger motorcycles under the Pulsar brand. “There will be a 350 cc Duke next year, so you can expect something similar with the Pulsar next year. And going forward, in 2014-15 there will be even bigger KTM and even bigger Pulsar,” Bajaj said.
The company is gearing up with the capacity of 1 00,000 units at its Chakan plant to cater the new range of Pulsars and KTM motorcycles. On Monday, Bajaj unveiled its Pulsar 200 NS (naked sport), which will compete against Yamaha R15 and Honda CBR 250R. The motorcycle is likely to be priced below . 1 lakh.
The launch followed KTM bringing in its Duke 200 last week with a price tag of . 1.16 lakh. Both motorcycles have been jointly developed by Bajaj and KTM. The two companies are likely to jointly bring in 350 cc and 690 cc motorcycles under the Bajaj banner over the next few years. The joint R&D for vehicle and engine development will help the company to maintain the cost and help itself maintain a 20% EBIDTA margins
And the price positioning will be similar in bigger models for Pulsar and KTM, the Indian brand at the lower end and KTM at the premium end.
The next generation Pulsar motorcycles (200cc, 350 cc and above) will co-exist with the current range of Pulsars. With bigger motorcycles expected from the Japanese competition, experts say this Bajaj-KTM twin strategy should work for the company to cater to different end of the market.
Bajaj said the new motorcycles would help the company increase market share to 30-32%, from 26% now, as the market for premiumend motorcycles is expanding fast. Experts say that with a rise in disposable income, the number of buyers will grow, but the segment will continue to be niche as the price bracket exceeds . 1 lakh.
“The market is growing, yet it forms less than 1% of the overall motorcycle market in the country. The sports bike category will continue to grow in double digits and there will be takers, yet it will form only 1%-2% of the market and it will be niche category, at least in the medium term,” said Mahantesh Sabarad, auto analyst with Fortune Broking.
Bajaj Auto, which has an export turnover of nearly . 6,500 crore with almost 1.5 million vehicles shipped annually sees the similar strategy being played out in the global markets too.
“I think this strategy of KTM-Pulsar acting together in the sports segment is a valid strategy anywhere in the world not just in India. We will look at leveraging this in many of our overseas markets in Latin America, Africa and South East Asia,” said Bajaj.
In Top Gear Bajaj Auto to launch more models in the 200cc to 700 cc range over the next few years to take on rivals Honda, Yamaha and Suzuki Aims to position Pulsar
in the value-formoney sports bike segment and Austrian partner KTM’s motorcycles at the premium end of the market It is gearing up with the capacity of 1,00,000 units at its Chakan plant to cater the new range of Pulsars and KTM motorcycles

Amazon Takes the Junglee Way to India

Makes quiet entry via comparison shopping site

OUR BUREAU BANGALORE

The world’s largest online retailer is tiptoeing into India, using cover from a comparison shopping site Junglee.com it acquired 13 years ago. Amazon, whose moves have been closely watched for any sign of an imminent entry into the Indian retail market, will not sell or buy anything in the country for now. Instead, it will direct customers to both online and offline vendors listed on Junglee.
Amit Agarwal, vice-president of Amazon, would only say Junglee would “help customers discover products from online and offline retailers in India and from Amazon.com”. He declined to say more about the company’s plans.
Conspicuously missing from the list of vendors on the Junglee site is Flipkart.com, India’s biggest online retailer founded by two former Amazon executives. Flipkart expects to post sales of . 500 crore by March 2012. Amazon ended 2011 with revenues of $48 billion (about . 2.5 lakh crore).
“Its recent moves to set up a fulfillment centre (in Mumbai) and now the Junglee launch certainly look like precursors to a retail launch whenever the government allows FDI in multi-brand retail,” said Devangshu Dutta, CEO of retail consultancy Third Eyesight. A legal expert at one of the country’s largest law firms said Amazon was making a ‘clever entry’.
Agarwal said Junglee will display over 1.2 crore products and 14,000 brands for Indian consumers. The company has also launched Amazon seller services in India where vendors can hook up to Amazon’s portal to acquire customers.

Dabur Q3 Net Profit up 12% at 173 crore

MUMBAI FMCG major Dabur India on Tuesday reported 11.90% jump in net profit to . 172.82 crore for the quarter ended December 31, 2011. The company had posted a net profit of . 154.44 crore in the same period last year, Dabur India said in a filing to the BSE. The total income during the third quarter also soared by 34.61% to . 1,463.08 crore from . 1,086.88 crore in the year-ago period, it added.

Air India to Offer Only Snacks on Short-Haul Flights

MUMBAI Cash-starved Air India (AI) on Tuesday said it will be following the industry practice on in-flight catering services on all short-haul economy class flights from tomorrow, which will see the national carrier offering only prepacked snacks and not full meals as done earlier. “In line with the industry practice, AI has decided to revise the on-board catering services in the economy class for short duration domestic flights with effect from February 1,”

Chicking Fast Food Chain Starts Operations in India

NEW DELHI Dubai-based restaurant chain Chicking Fried Chicken, promoted by the Al Bayan Group of Companies, plans to set up 100 outlets in India by 2015, a company official said on Tuesday. The chain operates 25 outlets in the southern part of India. Yogesh Lakhanpaul, MD of Chicking’s North India franchisee KYM Foods & Beverages said: “We plan to expand in Delhi NCR, Punjab, Jammu & Kashmir and Kanpur, among other cities.”

Nestle India to Expand Nutrition Portfolio

NEW DELHI Swiss packaged foods firm Nestle SA’s India arm on Tuesday said Luis Cantarell, president and CEO of group company Nestle Health Science, has reaffirmed the country as a key focus market on a visit here. “Cantarell reviewed and discussed plans for expansion into nutritional solutions for people with specific dietary needs not met through normal diets,” the maker of Maggi noodles and Nescafe coffee company said in a statement. Commenting on the potential for specialized nutritional products in India, Cantarell said, “It is acknowledged that in India there is a significant shift towards lifestyle diseases like diabetes and obesity especially in urban areas.”

Hello, Your Mobile Bills will Bloat 30% this Year

After bleeding for long, telcos to go for bold tariff hikes

JOJI THOMAS PHILIP NEW DELHI

Mobile phone bills of consumers will rise 20-30% this year, top executives of all leading operators said, as the country’s debt-ridden telcos raise call tariffs to revive revenue growth and cut losses in the fiercely competitive sector.
The move follows the 20% increase last July, the first hike after operators slashed tariffs in 2008 as they chased new customers, but ended up eroding profits. It comes at a time telcos are staring at penalties and fines running into thousands of crores of rupees for a range of alleged violations.
Vodafone quietly raised tariffs of postpaid users in January by about 20% in Delhi and plans to extend this to other regions, with rivals set to follow suit this month. Telcos say tariffs for prepaid customers, who form 96% of users, will be raised after March.
An executive close to Bharti Airtel said a 20-30% rise in the next 12 months was the “minimum requirement for the industry to keep its head above water”. Even state-run BSNL, which did not raise rates last time, plans to increase tariffs, a top executive said.
An executive close to Reliance Communications said the industry needed higher charges to service its . 275,000-crore debt. “Except the top three, all operators are losing . 800-1,000 crore per quarter,” the executive said. Uninor Managing Director Sigve Brekke told ET recently if ‘incumbents increase tariffs, he would be the first to follow’, adding that customers could afford higher tariffs. India added 400 million users in the last two years, but revenues crawled 10%, and average minutes of usage per customer fell from 465 in 2007 to 350. “Inflation has been around 9% in the last two years. The industry paid . 70,000 crore for 3G spectrum. These services failed to take off and costs will eventually have to be passed on,” said the executive of a leading GSM operator. He said earnings from every minute of traffic had plummeted to 40-45 paise from . 1 in 2007.
Samaresh Parida, director, Vodafone, said government levies had raised costs. “If the government keeps on trying to extract more from us, we are left with no alternative.” DoT Issues Notices to 5 Telcos, Seeks 1,600 crore
The telecom department (DoT) on Tuesday issued showcause notices to five telcos — Bharti Airtel, Vodafone, Reliance Communications, Tata Teleservices and Idea Cellular — asking them to pay up about . 1,600 crore in total, for allegedly understating revenues and hence paying lower levies during 2006-07 and 2007-08. The notices were sent within hours of communications minister Kapil Sibal approving the DoT’s proposal to recover . 823.31 core towards unpaid levies during these two years. But the total payment for the industry is almost double this amount because the department has added spectrum usage charges and other levies on the alleged underreported revenues, in addition to imposing penalties and interest on outstanding.
Executives with telcos said all five operators were expected to seek relief from court. They also added that the DoT had misinterpreted accounting practices and standards when alleging that telcos had underreported revenues. On Monday, in a presentation to Sibal, the department said that these five operators together had understated revenues by . 10,268 crore during this two-year period. Since telcos pay 6-10% of their annual revenue as licence fee and 2-6% as spectrum usage charges, reporting lower revenue brings down the component they have to share with the government.
ET had reported this development in Tuesday’s edition. It is estimated that RCOM will have to pay . 551 crore, while for Bharti it will be . 292 crore. The penalties for Vodafone works out to be . 254 crore. ET has learnt that Idea will pay . 113 crore, Tata Teleservices . 273 core and Tata Comm . 120 crore. Last year, the law ministry had approved the telecom department’s plans to issue showcause notices to telcos on this issue.