Baja Auto joins discount war
IT’S muscle-flexing time in the bike market. The more than 7 million units a year motorcycle market is all set to kick in the festive season with a price war. Hero Honda fired the first salvo with a Rs 2000 ( approx 6%) discount on its entry level motorcycle CD Deluxe. Now arch rival Bajaj Auto has hit back with a Rs 4000 (12%) discount on the Platina starting Monday. For now, the third player in the fray, TVS, is holding the price of its Star model. While the big two fight it out, the mood in TVS is a strict wait and watch. Sources say the Bajaj move is triggered by the fact that the Hero Honda price cut had brought the CD Deluxe almost at par with the Platina. Pre-discount, the CD Deluxe versions cost around Rs 35,000-36,000 while the Platina is currently priced at Rs 34,000. After the discount comes into effect, the Platina will cost Rs 30,000. TVS’ Star range is priced around Rs 36,000-38,000. Hero Honda says the scheme, called 2020, is a celebration of its 20 millionth motorcycle. “On the occasion of 20 million bikes, we are offering an opportunity to non-owners of two wheelers to own an entry level CD Deluxe at a special benefit of Rs 2020,” said a Hero Honda spokesperson. Sources say the Bajaj decision is also powered by the reasoning that Platina currently makes up around 30% of its volumes. So even a big margin hit will not impact the balance 70% of its range. Analysts say the price war could be an indication that the two biggest bike makers have decided to go for broke. Both players are upping the ante at a time that’s traditionally known to be the best season for the auto industry. This year, the motorcycle market has had a torrid run with the segment down more than 15% in the April-September period.