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Bajaj Auto to create global brands for export markets

Two and three-wheeler major Bajaj Auto Limited is aggressively working towards re-entering the export markets with a renewed thrust by creating global brands.

The company has already shortlisted six vehicles, two each in the scooterette, scooter and motorcycle segments, for entering the export markets, Bajaj Auto's vice president (products) Rajiv Bajaj said in New Delhi on Sunday evening.

''Our performance in the export markets has been really bad in the past. Whatever we did were one-time sales. Moreover, according to a recent survey, which the company did, we were ashamed seeing the profile of our customers. So we decided instead of ruining the company's name by giving them such products, it is better we create global brands and products and enter the market again.''

With the new products, the company claims to have achieved the world class standards. ''We are now sending the new models to around 20 distributors across the globe and asking for their feedback if they want any more modifications of the vehicles.''

The company has selected the scooterettes -- Spirit and Saphire -- for the European markets and these models would be despatched in the first quarter of the next fiscal. The scooters -- Bravo and Legend -- have been earmarked for the southern European markets of Turkey, Egypt besides the West Asia while the motorcycles -- Caliber and Prowler -- would be shipped to South America and later also to southeast Asia.

The company has already invested close to Rs 1 billion for developing and introducing the nine new models, including a few upgrades. The remaining eight new models would be launched in two phases by September this year.

Despite a 30 per cent plunge in net profit during the third quarter of 1998-99, Bajaj Auto is confident of closing the year with increased turnover and net profit.

This would largely be on the fact that the company's sales have not been affected by the major price slashes by car companies and reducing margins between a second-hand car and a new scooter.

''The drop in car prices would have no effect on us as we are addressing a totally different segment of customers. There will always be one set of customers for second hand cars and a different set for new vehicles,'' he added.

Rajiv Bajaj said the company would not cut down the price tag of its products. On the company's performance, he said, in spite of the negative results of the third quarter, overall performance during the fiscal would be better than the previous year.

Bajaj , however, refused to divulge any figures saying, ''It can be anywhere between Rs 10 million and Rs 100 billion.''

''We expect the new models -- Legend, Bravo, Caliber and Spirit -- to drive growth during the year.'' During the last quarter, these models are expected to contribute about 30,000-40,000 units to the company's total sales.

These new models are part of the 17 new products and upgrades which the company had announced to roll out within a span of 17 months starting January 1998. Nine of the models have already hit the streets.

All the models presently being rolled out of the company's stables are capable of meeting the year 2000 emission norms and do not need to be phased out. ''Even our two-stroke scooters are capable of meeting the norms. So there is no question of phasing out these products.''

The Legend, Bajaj said, is the world's first geared four-stroke scooter and is being produced at the Akurdi plant near Pune.

The 150-cc scooter with an all-aluminium engine delivers 9HP and has a top speed of 90 kmph.

The two-stroke Bravo has an advanced 5-port engine as its heart generating 8 HP of power.

''It is our strategy to roll out new products and riding on these, we expect to recover more than what we have lost,'' Bajaj said.

The economic slowdown has pushed Bajaj's third quarter (ending December 31, 1998) net profit down by 30 per cent to Rs 861.6 million from Rs 1.23 billion in the same period last year.

The company's net profit during the first nine months of the current fiscal was down five per cent from Rs 3.28 billion to Rs 3.12 billion a year earlier.

Bajaj auto's total sales during april-december 1998 were rs 2,541.64 crore, up 6.7 per cent from rs 2,381.25 crore last year. In the third quarter of 1998-99, the company's sales stood at Rs 8.5 billion, down two per cent from Rs 8.68 billion a year earlier.

Earnings per share on an annualised basis stood at Rs 28.74 during the third quarter this year as against Rs 41.25 in the same period last year.

The company's vehicle sales in December 1998 was 117,147 units, down four per cent from 122,040 in December 1997. Its output during the month totaled 117,759 units, down 14 per cent from 136,564 vehicles a year earlier.

However, its vehicle production in April-December, the first nine months of fiscal 1998-99, was 1.01 million, up two per cent from 991,076 a year earlier.

Its vehicle sales in April-December totaled 1.012 million, up three per cent from 983,836 a year earlier.

UNI

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