Bajaj Chetak

Production halt expected to be a setback for Bajaj Auto’s retail expansion plans for the Chetak

It’s been a year since the launch of the classic retro electric scooter Bajaj Chetak, but the company is struggling to realize its full potential. The lifestyle product received more than 50,000 expressions of interest and recorded sales of more than 1,300 units – from just two launch cities – Pune and Bangalore. Bajaj is currently sitting on a backlog of over 1,500 units. However, production bottlenecks have forced Bajaj to temporarily close reservations.

Bajaj Chetak Price Rise

Business Standard reports that Bajaj plans to increase the price of Chetak when production resumes at INR 1.5 lakh (ex-showroom). The electric scooter was launched in two variants with the basic Urbane variant priced at 1 lakh INR and the premium premium variant priced at 1.15 lakh INR (both prices are excluding showroom, Pune).

It was previously reported that Bajaj Auto suffered losses with every unit of Chetak sold at its introductory price. The price increase aims to mitigate / eliminate this loss.

With strong customer response, Bajaj Auto is confident that the price hike will not negatively impact the scooter outlook. The product is said attracted all kinds of buyers including the better-off who have never owned a two-wheeler before.

Bajaj Chetak Sales
Chetak sales averaged 250-300 units per month before production stopped due to a shortage of semiconductor chips

Production bottlenecks

Shortly after the launch of the Bajaj Chetak amid much fanfare, India entered a strict nationwide lockdown which halted production. Subsequent logistical problems, compounded by a deterioration in India-China relations, hampered the import of critical components.

Bajaj eventually managed to resume production only to put it on hold again due to acute semiconductor shortage worldwide. The break in production would significantly delay Bajaj Chetak’s retail expansion plans. Thus, a price increase seems inevitable to limit the damage.

Expansion plans and exports

Bajaj is currently working to increase local content in Chetak in addition to reforming its supply chain network. These issues are expected to be resolved in the coming months and the company is confident to expand market coverage from the current 2 cities to 24 cities by the end of next fiscal year.

Once the production constraints have been settled and the Chetak set in motion on the domestic market, the company can turn to export. In Europe, the Bajaj Chetak could position itself as a cheaper alternative to the Vespa Elettrica. As the old continent makes rapid progress in the field of electric mobility, the Chetak seems like an attractive proposition. Classic retro style is a big plus.

In addition to the Chetak, Bajaj’s electric scooter platform will also serve KTM and its subsidiary Husqvarna. A new production plant in Chakan is being prepared for the electric vehicle push in Bajaj.

Source


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