Time to rejoice for Bajaj Auto as the strike by VKKS union at the company’s Chakan plant has been called off. The strike lasted for 50 days. Last week Rajiv Bajaj told the company’s management that he is giving them a weeks time to sort out issues with the workers so production commences in full swing next week. Earlier this week, there was no concrete result but Bajaj Auto’s MD extended the deadline by another two days. Today, everything seems to be settled and Bajaj Auto won’t be shifting production from Chakan to its other plants (Aurangabad or Pantnagar).
Rajiv Bajaj has sent out an interesting letter in the form of a press release, where he goes on to thank various people including Bajaj engineers, workers and even the government. He states in his letter – “That is why we refer to it as our production laboratory where we make high technology motorcycles for export all over the world,” while referring to the company’s Chakan unit. The 22 suspended workers will be reviewed again and the company will consider their case as well. So all seems well as far as Bajaj Auto’s manufacturing operations go.
However now Honda 2-wheelers has to sit up and take notice. While earlier this month, the Japanese automaker was busy celebrating its movement to the number two spot, Bajaj Auto won’t let that last for long. While the strike hasn’t had a direct impact on sales (the company had good inventory and also shifted production temporarily to its Waluj plant), it does hamper the launch schedule. Bajaj Auto has a slew of models lined up including few new variants of the mass market Discover motorcycle, which are set to hit showrooms in the next couple of months. The Discover being a volume seller is likely to pull Bajaj Auto ahead of Honda in the sales chart.
While Bajaj Auto might not seem to be bothered about Honda’s overtake, the company is surely worried. Remember Bajaj Auto always turns the focus on profitability when sales numbers are discussed. However last October the company went all out to celebrate the Discover overtaking the Hero Splendor to become the highest selling motorcycle in the world in September 2012. That glory was short lived as the Splendor was quick to regain back its best selling motorcycle tag, outselling the Discover by 28,000 units in October.
Honda is still not the bigger motorcycle manufacturer in India as Bajaj Auto sells considerably more bikes than Honda. However Honda’s scooter sales gives them a juicy sales report, which has pulled them ahead of Bajaj. Honda’s optimism is worth applauding as the company feels it can overtake its erstwhile partner Hero as soon as 2016. India’s largest 2-wheeler manufacturer is looking at breaking new sales records with the aim of making every second 2-wheeler in India adorn the Hero badge (i.e. 50% market share). While Hero MotoCorp and Honda have turned arch enemies now, the former has contributed a significant amount of green bucks to the latter in the 26-years of their partnership.
