NEW DELHI: It’s going to be a tough ride for Bajaj Auto, one of the oldest two-wheeler makers of the country. While the company has drawn up an ambitious plan to roll out a Tata Nano-type low-cost car, for time being, it needs to fight out a constant erosion of market share in bread-and-butter motorcycle segment.

And it’s a matter of concern for Bajaj Auto, considering the fact that bigger rival Hero Honda is gaining ground.

Bajaj, which at one time was closing in on Hero Honda, has seen its grip on the bike market going down by close to 6% in just 15 months. Its share slipped to 28.7% at the end of 2007-08 and further down to 26% at the end of the first quarter (April-June) of 2008-09, from 31.7% in 2006-07.

Hero Honda strengthened its hold in the same period, growing from 48.1% in 2006-07 to 54.5% by 2007-08 and a significant 57.2% by the end of April-June 2008, according to Society of Indian Automobile Manufacturers (Siam) data. So what ails Bajaj Auto? Analysts appear unanimous in their views that a premature shift of focus from the crucial sub-125cc segment to heavier ones, is the prime reason, even though Bajaj Auto’s 2-wheeler CEO S Sridhar refused to buy the argument.

While Bajaj has only the Platina as its main product in the segment, Hero Honda has four models - Splendor, Passion CD Dawn and CD Deluxe.

“Just as Bajaj is focussing on higher-cc bikes, it is not refreshing its entry-level models around 100-cc engines. This is among the reasons behind the decline in its market share,” Vaishali Jajoo, auto analyst at Angel Broking, said.

Another analyst said 100cc still promises a good market and ignoring it may not be good in the short-term, though it could work in the long-term.

Source: Economic Times