Chennai: It's back to basics at the Rs 161-crore turnover Majestic Auto. And, as the company puts it, it is the beginning of a new saga.

With no great models to ride on comfortably (except perhaps the Hero Puch) and the brief affair selling imported BMW bikes (initially for Rs 4.5 lakh and later for Rs 2.25 lakh) not cranking as expected, Majestic Auto's (popularly known as Hero Motors) latest initiative involves a slew of new launches and a couple of relaunches.

And Majestic Auto managing director Pankaj K Munjal's diary is peppered with new launch and relaunch programmes until the second quarter of 2004. No, the focus is not entirely on motorcycles, a segment which is witnessing exciting action by all the two-wheeler manufacturers.

On the other hand Munjal is pressing on the step-through segment, cyclomoto (a motorised bicycle) and of course two motorbikes - sports and an urban transport model; the promotional plank being an economically priced vehicle offering excellent fuel economy.

With these Munjal nurtures an ambitious target of garnering 10 per cent of the country's two-wheeler market. Isn't he over-ambitious? Even if the company operates at its full capacity (around 2 lakh units) it can capture only 5-per cent market share. ''Capacity is not a constraint as it can be increased any time,'' is his answer.

But take a closer look at the three markets - 140 lakh per annum bicycles, 45 lakh two-wheelers and 5 lakh cars. ''Subtracting the above numbers from the country's population (100 crore) there is a huge untapped potential for an appropriately designed personal transport vehicle,'' he says.

Simply put, there is no two-wheeler falling between bicycles and mopeds. After a cycle, costing Rs 2,000, the market has only the Rs 15, 000-plus-priced mopeds. It is this gap Munjal plans to fill with a vehicle for people with different demographic profiles, thereby expanding the overall two-wheeler market size and simultaneously growing his own company.

On the anvil is a motorised bicycle costing around Rs 5, 500. The soon-to-be-launched (in the second quarter of 2003) vehicle will sport a two-stroke 25cc engine, which can go up to a maximum speed of 20 km per hour and can offer 85 km per litre (kmpl) of petrol.

Didn't such motorised cycles failed way back in the seventies in markets like Chennai? Says Majestic Auto associate president P P Srinivasa Rao: ''That was mainly due to the absence of a after-sales service network. This time we will be leveraging the group company's - Hero Cycles - sales and service network. Now we smell success.''

Stepping on step-through models
The domestic two-wheeler industry is in a state of flux. With Suzuki and Honda becoming eligible to set up their own mobike manufacturing plants here, the existing players (Hero Honda, Bajaj Auto, the Kinetic group and TVS Motor Company) are queering the pitch with new launches.

In the high-powered gearless scooter segment, the fight is intense between Kinetic, Bajaj Auto and Honda. On the other hand, in the scooterette market (75cc) the fight is between TVS Motor (Scooty), Kinetic (Style) and Bajaj Auto (Sunny, Spirit), while the overall moped market is on the decline. Here TVS Motor leads the pack.

Operating in low-power bike (Hero Puch), scooterette (Hero Winner) and moped segments, Hero Motors got beaten severely at the market place with some of its models turning lemons and sales sliding faster than its vehicles.

In an effort to stem the slide and to be in the reckoning, Munjal decided to have a step-through - utility bikes (75cc-99cc) - for the rural market, offering load-bearing capacity and fuel economy, a market that is not witnessing such severe competition.

While the engine design was taken care of by the joint venture outfit that Hero group has with Briggs and Stratton, Munjal approached Idea, the Italian automobile design agency, for styling. The result is the four-stroke 75cc Hero Smart, a step-through priced around Rs 21,000.

With ample load space at the front (as the vehicle rests on a dual frame) and a fuel efficiency of 100 kmpl, the company is hoping to make a dent in TVS Motor's moped and Bajaj Auto's M80 markets. Says Majestic Auto senior vice-president Sanjay Bharadwaj: ''A lot of engineering has gone into developing the power train.''

Strict emission norms, coupled with fuel economy, necessitated innovation in the design of cylinder head ports. The engine has a single-piece ductile iron crank (found only in four-wheelers) and high-pressure die-casting cylinder head. ''The benefits are a longer engine life, high fatigue strength, reduction in emissions and better engine performance,'' he says.

The other unique aspect for Hero Motors is the development of modular engines. ''By changing the connecting rod, crank shaft and piston we can build a wide variety of four-stroke engines between 75cc and 99cc for different models,'' adds Bharadwaj. The additional benefit is the ability to have different power transmissions like four-foot gear, and two-auto gear, retaining the same engine.

This comes handy to launch new models like the Hero Thai, a sports bike and an urban bike (both priced around Rs 29,000). ''The sports bike will be launched during the second quarter of this year and the urban bike will be in 2004,'' he says. A 92cc motoscooter is also on the anvil.

Hero Motors is also relaunching a couple of its existing models. The first one is the two-stroke redesigned Ezee model priced around Rs 27,000. The shifting of fuel tank to the front dickey, thus freeing more storage space below the seat, and a larger wheel-base affording better road grip are the features the company hopes women office-goers and students would find attractive.

Munjal says the results of the new plans will be seen on the topline and bottomline two years from now. And it will be really interesting to see whether that happens, enabling the Rs 33.83-crore equity-based company to wipe out its accumulated loss of Rs 21.59 crore or whether it will still remain in the shadows of the group's flagship company, Hero Honda Motors.