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Rediff.com  » Business » Bajaj's XCD runs into rough weather

Bajaj's XCD runs into rough weather

October 22, 2007 13:01 IST
Two-wheeler maker Bajaj Auto (BAL), which is trying to wean away customers from the low margin 100 cc segment, has run into rough weather having to replace faulty components in its newly launched DTS-Si XCD125.

According to industry sources, the company has contacted customers who bought the 125cc XCD to replace faulty electronic components for self start and head lamps along with a part of 'noisy' centre-stand.

When contacted, Bajaj Auto Ltd managing director Rajiv Bajaj said it was not a case of recall but admitted of "possibly a particular case somewhere".

The company had last month launched the 125cc XCD, which it claims clubs features of a 150cc bike with the mileage of a 100cc motorcycle, at Rs 41,000 (ex-showroom).

'XCD 125' is also the company's main weapon in its strategy to exit the high-volume, low-margin 100cc segment, which it said has shown negative growth in the past few months.

The 100cc bike segment has shown a constant decline in the current fiscal while all the remaining motorcycle segments have been growing. With the innovative XCD 125, the company is trying to provide customers with the value for their money, BAL had said on an earlier occasion.

Except the 100cc segment, which is nearly 60 per cent of the overall two-wheeler market, all other segments such as 125cc, 150cc and gear-less scooters are growing.

"The customer is losing interest in 100cc bikes which would lead to the demise of this segment very soon. We are not exiting the 100cc customer, we are exiting the 100cc products by offering consumers a better product," the company had said.

The monthly production of the model would be ramped up from 20,000 units in September to 50,000 in October and subsequently to 70,000 units by November.

The production costs of Bajaj Platina and XCD are almost equal and the company expects to earn an additional Rs 3,000 on sale of evert XCD unit. 

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