Bajaj CT100 being sold for a loss but Bajaj Auto doesn’t mind: Here’s why

Bajaj Auto has just reignited price wars in the entry level commuter motorcycle segment. The Bajaj CT100 100-cc commuter motorcycle is now priced at Rs 30,714, ex-showroom Delhi, making it even cheaper than the TVS XL100 moped, which is priced at Rs. 32,909. Bajaj Auto has cut prices of the CT100 by Rs. 3,000-3,500, in order to drive demand. However, this also means that the company is making a small loss on every CT100 it sells currently. Bajaj Auto doesn’t mind this though. This is because the super aggressively priced entry level motorcycle is driving sales, keeping dealers happy and service centers busy.

Explaining why Bajaj Auto has priced the CT100 so aggressively, Kevin D’Sa, president (finance) at Bajaj Auto has this to say,

We have taken a price cut of Rs 3000-3,500 on the CT100. This is done mainly for the marriage market and once that is over one always has the option to relook at the prices. At the overall level we would be making a bit of negative EBITDA. But this helps in oiling the entire system, for instance the dealer viability, customer walk-ins, vendor supplies, utilization of capacity, overall lowering of fixed costs and operating leverage so those benefits come in.

In the coming months, Bajaj Auto is likely to increase prices of the CT100 but for the time being, the motorcycle is selling briskly, so much so that it commands a waiting period. The most inexpensive motorcycle sold in India,the CT100 is available in three variants. All variants use a 99-cc, four-stroke engine that produces 8.1 Bhp of peak power and 8.05 Nm of peak torque. The gearbox is a four-speed unit. The motorcycle uses telescopic front forks and gas-filled rear shock absorbers. Drum brakes are standard and so are spoked 17-inch wheels. Bajaj also offers an alloy wheels-equipped variant of the CT100, and another top-end variant that gets both alloy wheels and an electric starter.

Via MoneyControl