Bajaj may rev up plant to meet sales spike

A series of launches during the past few months has raised demand for Bajaj bikes to new highs. The company is struggling to meet demand, especially for its premium range such as Pulsar, Avenger, and KTM series.

The second-largest bike manufacturer based in Pune is exploring ways to increase capacity at its Chakan plant near Pune to meet demand, an official of the company said.

The company launched three models under the Pulsar brand (RS 200, AS 200, and AS 150), three models under the Avenger brand (Cruise 220, Street 220, and Street 150), which followed the KTM RC 200 and RC 390 launched last year.

All these high-margin products, including Kawasaki Ninja, which are made at the Chakan plant, one of the three plants the company owns in the country, are witnessing healthy pick-up in demand, with the Pulsar RS 200 seeing a waiting period of more than three weeks.

Rajiv Bajaj, managing director, Bajaj Auto, said, "We need to assess if we should create additional capacity at Chakan. By January, we should be able to reach a decision because my understanding is we will need new capacity by April".

Bajaj makes Platina and Discover at Pantnagar in Uttarakhand. Waluj near Aurangabad also makes Platina and Discover, besides CT 100, Boxer, and three-wheelers. While Chakan has a capacity of 1.2 million units a year, Pantnagar has a capacity of 1.8 million and Waluj 2.4 million.

The company is constrained by capacity for the newly launched Avenger range — it cannot make more than 20,000 units a month. Therefore, it is not starting exports of the model at least in the next two to three months.

"We are hoping that Avenger volumes stay around 20,000 units (a month) because I fear we won’t be able to make anything above 20,000. Because of this, we have to shift some production of the Pulsars to Pantnagar and Waluj. Next year, we would be increasing the exports of KTM, which are made only at Chakan as of today," Bajaj added.

Exports form nearly half of two-wheelers manufactured by Bajaj, with Sri Lanka, Nepal, and Africa having a lion’s share. Latin America and South-east Asia are also important for the company. The firm recently entered the Russian market with the Pulsar range.

The firm hopes 70 per cent of Avenger volumes to come from the 150-cc variant, which Bajaj says is the “centre of the market”. More than half of the Pulsar volume, where it has eight models, comes from the 150-cc model. "Everything we have done this year, everything has come from the learning from the Discover. There was a doubt with us launching several models under the Pulsar the consumer will dump the brand like the Discover. But as far as I can see the Pulsar has only gained share," added Bajaj.