March 27, 2007: The Tatas’ Rs 1-lakh car seems to be posing a challenge to two-wheeler major Bajaj even before it is on the road. A study has indicated the two wheeler sales are sure to see an erosion once Ratan Tata’s dream Rs 1-lakh car is launched. This indeed has made India’s second largest two-wheeler manufacturer Baja Auto to seriously consider entering the passenger car market.

Significantly, Hero Honda, the country’s top bike manufacturer had announced that it would foray into the four-wheeler market soon. As the study states, the Tata car will affect the two-wheeler market. If that happens, Bajaj would also manufacture cars for the market. It may be recalled that Bajaj Auto had earlier said it would launch a goods-carrier version of a light commercial vehicle by year 2009. It is also expected to a launch passenger carrier version a little later. The proposed vehicle will be fitted with a 500-600cc engine and will be available in diesel, petrol and compressed natural gas (CNG) versions, according to a report which elaborated on Bajaj’s plans.

It has been forecast that the Tata Rs 1 lakh car, which is to be launched by mid-2008, would severely affect the top-end motorcycle segment in which Bajaj is the market leader with its successful Pulsar.

Bajaj is not alone as opportunity calls for innovation. The Kolkata-based company Global Automobiles has reportedly announced a tied up with China’s Guangzhou Motors, to roll out a low-cost car, a report said.