Mumbai: Low-end products in the motorbikes market are witnessing a shrinking market, while the executive segment or high-end motorbikes (Rs 35,000-40,000) are becoming hot picks.
Competition at the low end is getting so fierce that manufacturers, apart from using a cut-throat pricing strategy, have started using every trick in the marketing book to eliminate competition.
Last year the low segment, comprising bikes like the Boxer and the CD-Dawn, consisted of about 34 per cent of the total market, while this year this segment comprises just about 26 per cent of the market with annual sales of about 10 lakh, auto industry sources say.
In May 2002 the entry level segment comprised 1, 42,766 units, which gave it a 44-per cent share of the total bike market, but since then its share has been falling in favour of the executive or high-end segment.
In July 2002 the entry level segment comprised 99,810, units a 36 percent share of the bike market, and though in absolute numbers sales rose to 1, 27,760 units in October 2002 its market share fell to 34 per cent of the market and to 32 per cent in November at 1,13,974 units.
The bikes that are the top sellers in this segment are the Bajaj Boxer (around 34,000 units per month) and the CD-Dawn (27,000 units per month). Newer models in the executive and premium segment have led to manufacturers offering freebies and discounts on their low-end models.
The CD-Dawn, for instance, is on offer with a Rs 1,001-discount, another Rs 500 in accessories and to top it all with 0 per cent financing for 12 months on a 50-per cent down payment. On total cash payment, the additional freebie is a free insurance worth Rs 784.
Sales of the entry level TVS Max 100 and the TVS Max 100R have also gone down. The Max standard fetches Rs 750 discount combined with accessories worth Rs 500 and the deluxe variant attracts Rs 1,000 in discounts plus accessories worth Rs 500. The former sells at around 20,000 units per month while the four-strokes sell at around 45,000 units a month.
Bajaj earlier dropped prices on its Boxer CT by Rs 2,000 and combined it with 0 per cent financing and has now increased the discount to Rs 1,250 while its AR variant is available at a discount of Rs 1,000.