Bajaj Auto postpone its small CV segment entry

When the Mahindra & Mahindra is gearing up for entry into the small CV segment by end of 2009 with a mass transportation solution for semi-urban and rural markets,Bajaj Auto has decided to postpone its entry by atleast a year-and-half.

Tata Motors the pioneer in the CV maker plans to up production capacity of its sub-one tonne vehicle 'Ace' at Pantnagar, where it can currently make 2.5 lakh units per year.Piaggio Vehicles, the co player in the segment also getting ready to introduce the second variant some months down the line.

"Bajaj has been working on this project for quite some time but has only now realised that coming up with a Ace-type of vehicle would give it no unique selling proposition. Even the costing is not right; the project is being done from scratch and a launch is unlikely beforeend 2010 or early 2011," a source said.

Pawan Goenka, president of the automotive business at M&M, said that "The consumer has the option of buying a three-wheeler which is always priced lower but does not offer any disadvantage in load-carrying capacities vis-a-visa four-wheeler. By giving up the first-mover advantage, we may just be able to offer a better value proposition. I don't think these four-wheelers can replace three-wheelers,".

He also added that the company will be launching these vehicles by the end of 2009 from its Chakan facility.Tata Motors,which has also launched passenger versions of the Ace, pointed that it has turned out to be the absolutely last mile vehicle.