Two wheeler will become Costlier !

First it was the car makers who were groaning over the education cess. Now, the bike-makers are preparing to spike up their price tags to keep up with the increase in steel prices. Starting April 1, two-wheelers from Bajaj and Hero Honda stable are likely to cost an extra Rs 1,000. Though both companies refused to confirm the impending price hike, dealers say the companies have indicated an increase in prices of its products from next month. Steel prices have increased by about Rs 500 per tonne post-budget.

Market leader Hero Honda is currently running a discount scheme of Rs 1,001 on its models which include Glamour, Splendour and Passion plus. According to sources the company is likely to withdraw the discount scheme in three-four weeks. When contacted, Hero Honda spokesperson denied any plans to hike prices on its models. Bajaj officials were not available for comment. Chennai-based TVS, however, has ruled any immediate correction in the prices of its bikes.

TVS Motor VP marketing Prasad Narsimhan said, “We have no plans to increase prices on our bikes for any reasons in the near future.” Meanwhile, Bajaj has discontinued the 0% interest rate scheme on its 100 cc bike Platina and replaced it with a Rs 2,000 discount. The discount is unlikely to trigger a price war in the entry-level bike segment but it is expected to help Bajaj exit the 100 cc segment. Sources say that Bajaj is looking to exit the 100 cc segment, as per its long-standing plan, by the end of Q1 FY 08.

Sources also say that Bajaj is likely to reduce prices of its 100 cc bikes further in the months to come to clear stock before launching its new platform in the second quarter of FY 08. The company is currently working towards launching higher-powered bikes that will target the 100 cc consumer segment with a better value for money proposition.