Suhani Adilabadkar
Bajaj Auto has always been the strategist. Creating new aspirations, spotting opportunities and riding them with full conviction has been Bajaj Auto’s biggest strength. Bajaj Auto spotted the rise of the 125cc motorcycle segment as BS-VI related costs increased acquisition cost in the 150cc segment. Pulsar 125cc was launched in 2019 and presently has 31% market share in the 125cc segment which constitutes 50% of the motorcycle industry in India.
While peers are busy suiting themselves to customers needs, Bajaj Auto creates new segments as witnessed with the launch of Bajaj Freedom 125, the world’s first CNG bike. With the fuel price above Rs 100 per litre for over two years in India, middle class commuters and mileage conscious customers are pushed towards alternative fuel vehicles. Priced at Rs 95,000, Bajaj Freedom is available in three variants and competes with Hero Splendor and Honda CB Shine. As per Bajaj Auto press release, Bajaj Freedom 125 CNG motorcycle provides nearly 50% cost savings by significantly reducing fuel expenses, compared to similar petrol motorcycles. Bajaj Freedom 125 CNG tank provides a range of more than 200 km on just 2 kg of CNG fuel. Additionally, the CNG bike has a 2-liter petrol tank which performs as a range extender, offering over 130 km of range in case the CNG tank empties, ensuring an uninterrupted journey. Bajaj Freedom has dual-fuel capability and comes in five colors: Ebony Black, Caribbean Blue, Cyber White, Racing Red and Pewter Grey.
CNG vehicles are preferred as they produce approximately 26.7% less CO2 emissions than petrol, emit 85% lower NMHC’s (non-methane hydrocarbons) and 43% less NOx (nitrogen oxide). Speaking on CNG opportunity in Q4FY24 post quarterly result conference, Rakesh Sharma, Executive Director at Bajaj Auto said, “The mileage conscious customer is spread across the 100cc to 125cc commuter segment and is well over 600,000 units per month. Over 60% of this is covered by the CNG infrastructure, hence, the opportunity is exciting.”
While the company has launched the world’s first CNG motorcycle, how conducive is the CNG infrastructure in india?
From 900 CNG stations, 10 years back, India currently has 6861 CNG stations. Bajaj Auto plans to launch Bajaj Freedom 125 in Gujarat and Maharashtra and slowly expand in the rest of India. The density of CNG pumps is higher in Gujarat and Maharashtra compared to other states. The government has set a target of opening more than 17,000 CNG stations by 2030.
Bajaj Auto has strong expertise in the CNG arena. CNG bike is an extension of the Bajaj Auto CNG product portfolio which includes three wheelers and quadricycle Qute. The company has 88% market share in CNG three-wheelers which it has been manufacturing for years. For Bajaj Auto, all three platforms co-exist, ICE, electric and CNG across its varied product portfolio ranging from Pulsar, KTM, Dominar, electric scooter Chetak, three-wheelers and the latest addition, Bajaj Freedom. But how will Bajaj Freedom 125 fare against electric motorcycles expected to be launched by close peers Eicher Motors and TVS Motor Company in the near future.
Though running costs of the CNG two-wheeler might be higher than an electric motorcycle, there is a significant argument in favour of CNG vehicles. No charging required. Bajaj Auto is the disruptor, the innovator and the strategist rolled into one. Bajaj Auto stock price currently at Rs 9,500 levels double over the past one year.
