Bajaj Auto, the third-largest motorcycle maker by sales, said it will disrupt the entry level domestic motorcycle market with the launch of the world's first compressed natural gas (CNG)-run motorcycle, which it claims will halve the monthly fuel expense.
Bajaj Auto is hoping this will shake up market leader Hero MotoCorp's dominance in the entry-level segment.To be launched under a completely new brand, Bajaj's bi-fuel motorcycles - that can run both on CNG and petrol - will be priced at a premium compared to the petrol ones in the entry level (125cc and below) of the market where buyers' sensitivity to fuel price hikes is higher, said Rakesh Sharma, executive director at Bajaj Auto.
One in every two motorcycles sold in the local market belongs to the entry level.
Bajaj Auto's share in the 100-110cc motorcycles at present stands at 8%, Sharma said.From an operating cost point of view, the CNG motorcycles will straightaway halve the monthly expenses for customers, he said.
"This is a big move for us. We are hopefully going to use this (CNG motorcycles) as an opportunity to disrupt the segment," Sharma told ET.
Bajaj has made several attempts to woo the mileage-conscious entry-level customers by introducing models that boast of comfort, style and safety features.However, Hero, which leads the segment, continues to enjoy the first-mover advantage, and fuel efficiency remains an over-riding attribute demanded by entry-level buyers.
With internal combustion engine-powered models reaching its technological limits and electric motorcycles having their own challenges, developing CNG motorcycles emerged as a compelling reason for Bajaj Auto, Sharma said.
Additionally, an increasing density of gas stations - 414 districts out of 700 now have CNG pumps - also bolstered its plans.
The experience and market leadership in CNG three-wheelers of several years, a ready-made supplier base and infrastructure added heft to the company's plans, helping it align with the government's goals of carbon reduction, Sharma said.
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