Bajaj Auto looks to disrupt market with its CNG motorcycle Freedom 125, return favour to its arch-rival
BCCL
Synopsis
Rajiv Bajaj, managing director of Bajaj Auto, aims to "return the favour" to Hero Honda with the Freedom 125, the world's first CNG-powered motorcycle. Hero Honda revolutionized the scooter-dominated market 25 years ago with fuel-efficient motorcycles that offered 80 km per litre. Priced between Rs 95,000 and Rs 110,000, the Freedom 125 claims to cut operating costs by up to 50% compared to petrol bikes
By Shally Mohile, ET Bureau
Akurdi: With the Freedom 125, the world’s first CNG-powered motorcycle, Rajiv Bajaj, managing director, Bajaj Auto Auto wants to “return the favour” to the erstwhile Hero Honda which transformed the scooter-led two-wheeler market two-and-half decades ago, with its fuel-efficient motorcycles. The motorcycles returned 80 kms to a litre, double of what the scooters returned.
"Hero Honda did a favour on the two-wheeler market by launching motorcycles. We want to return that favour," quipped Bajaj alluding to 1997—the year when Hero Honda overtook Bajaj Auto which led the two-wheeler market with its scooters. “Today, the message with the Freedom is “Tiger Zinda hai,” he said, reminiscing the old rivalry with Hero MotoCorp.
According to Bajaj the "market opportunity" for the Freedom is huge and will target the entry level (100-125cc) motorcycle market which is 650,000 units per annum. Over 70% of the motorcycles sold in the domestic market belong to this segment. The segment has been a stronghold of market leader, Hero MotoCorp and been a tough spot for Bajaj Auto that remains a marginal player with 25%-26% share in the 125ccc segment and less than 15% share in the 100-110cc.
With its CNG bike, Bajaj is aiming to attack Hero’s stronghold. “We have had limited success in the bottom half of the market, and we needed to do something disruptive,” Rakesh Sharma, Executive Director of Bajaj Auto.
The success of the company’s CNG three wheelers where Bajaj has 88% share of the market, a widespread CNG network—6000 outlets and skyrocketing fuel prices prompted the company to undertake the development of the bike 2.5 years ago. Sharma conceded that while the opportunity is large, a customer’s acceptance of the technology and readiness to queue up at a CNG pump will be the key. Bajaj has been in dialogue with all the major gas distribution companies for a dedicated gas dispenser for two wheelers. Most companies have responded positively, he said.
Bajaj Auto has created an initial capacity of 10,000 units per month at its facility in Aurangabad, where it also produces the CNG three wheelers. It plans to ramp up the capacity to 40,000-50,000 units a month by the end of FY25. Over the next six months, Bajaj will focus only on the domestic market with its new offering and will start exporting to some select markets such as Egypt, Tanzania, Colombia, Peru, Bangladesh, and Indonesia.
“It is not only the world’s first CNG motorcycle but is the first hybrid CNG technology. The bike offers freedom from cramped seats, boring designs and it offers freedom from paradoxical unsustainable subsidies that the government sometimes employs to promote sustainable technologies,” he said. Bajaj added that the world over there is chaos over subsidies for electric vehicles. Despite all the government push and manufacturers (including Bajaj) shouldering it and state governments doling out incentives, e-two-wheeler penetration is only 5% in the country, he noted.
At the launch event, Nitin Gadkari, Minister of Road Transport and Highways, praised the design and quality of the CNG bike. He suggested, "I request Rajiv to make it a 2-litre tank of ethanol instead of a 2-litre petrol tank with the CNG tank," and urged Bajaj to keep the price below Rs 1 lakh.
Bajaj called for a reduction in GST on clean fuels, arguing, "There is no justification for a 28% GST on two-wheelers. The government must meet us halfway. We have priced the bike at less than one lakh, and the government must do its part and offer 12% GST."
Bajaj has 3-4 patents around CNG motorcycles. Commenting on the investment made on the CNG bike, he said, “Please tell competitors we have invested too much money in this motorcycle, and it’s not worth their while to invest in CNG motorcycles."
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With prices starting from Rs 95,000 (ex-showroom, Delhi) going up to Rs 110,000 the Bajaj Freedom claims to lower the operating costs by up to 50% when compared to similar petrol-powered motorcycles and boasts of a dual-fuel capability with an auxiliary petrol tank of 2 litre giving a combined range of 330 kms."Hero Honda did a favour on the two-wheeler market by launching motorcycles. We want to return that favour," quipped Bajaj alluding to 1997—the year when Hero Honda overtook Bajaj Auto which led the two-wheeler market with its scooters. “Today, the message with the Freedom is “Tiger Zinda hai,” he said, reminiscing the old rivalry with Hero MotoCorp.
According to Bajaj the "market opportunity" for the Freedom is huge and will target the entry level (100-125cc) motorcycle market which is 650,000 units per annum. Over 70% of the motorcycles sold in the domestic market belong to this segment. The segment has been a stronghold of market leader, Hero MotoCorp and been a tough spot for Bajaj Auto that remains a marginal player with 25%-26% share in the 125ccc segment and less than 15% share in the 100-110cc.
With its CNG bike, Bajaj is aiming to attack Hero’s stronghold. “We have had limited success in the bottom half of the market, and we needed to do something disruptive,” Rakesh Sharma, Executive Director of Bajaj Auto.
The success of the company’s CNG three wheelers where Bajaj has 88% share of the market, a widespread CNG network—6000 outlets and skyrocketing fuel prices prompted the company to undertake the development of the bike 2.5 years ago. Sharma conceded that while the opportunity is large, a customer’s acceptance of the technology and readiness to queue up at a CNG pump will be the key. Bajaj has been in dialogue with all the major gas distribution companies for a dedicated gas dispenser for two wheelers. Most companies have responded positively, he said.
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Bajaj Auto has created an initial capacity of 10,000 units per month at its facility in Aurangabad, where it also produces the CNG three wheelers. It plans to ramp up the capacity to 40,000-50,000 units a month by the end of FY25. Over the next six months, Bajaj will focus only on the domestic market with its new offering and will start exporting to some select markets such as Egypt, Tanzania, Colombia, Peru, Bangladesh, and Indonesia.
“It is not only the world’s first CNG motorcycle but is the first hybrid CNG technology. The bike offers freedom from cramped seats, boring designs and it offers freedom from paradoxical unsustainable subsidies that the government sometimes employs to promote sustainable technologies,” he said. Bajaj added that the world over there is chaos over subsidies for electric vehicles. Despite all the government push and manufacturers (including Bajaj) shouldering it and state governments doling out incentives, e-two-wheeler penetration is only 5% in the country, he noted.
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At the launch event, Nitin Gadkari, Minister of Road Transport and Highways, praised the design and quality of the CNG bike. He suggested, "I request Rajiv to make it a 2-litre tank of ethanol instead of a 2-litre petrol tank with the CNG tank," and urged Bajaj to keep the price below Rs 1 lakh.
Bajaj called for a reduction in GST on clean fuels, arguing, "There is no justification for a 28% GST on two-wheelers. The government must meet us halfway. We have priced the bike at less than one lakh, and the government must do its part and offer 12% GST."
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Bajaj has 3-4 patents around CNG motorcycles. Commenting on the investment made on the CNG bike, he said, “Please tell competitors we have invested too much money in this motorcycle, and it’s not worth their while to invest in CNG motorcycles."
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