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January 18, 2000

BUDGET 1999-2000

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The Rediff Business Interview/Rajiv Bajaj

'The two-wheeler market in India is moving towards motorcycles'

Rajiv Bajaj, vice-president (products), Bajaj Auto Rajiv Bajaj, vice-president, Bajaj Auto and son of the two-wheeler tycoon and CII president Rahul Bajaj, believes that his company could retain its glory by changing its attitude, image and, of course, products. His uncle and Rahul Bajaj's brother Madhur Bajaj agrees with Rajeev. "The old generation at Bajaj is making way for the new generation," says the older Bajaj.

Rajiv Bajaj did mechanical engineering from Pune University and Masters in manufacturing systems engineering from the University of Warwick in 1991. He took over as vice-president (products) in 1995. He wants to give the two- and three-wheeler behemoth a new face, a new image. For the last one year, Rajiv has been trying to make Bajaj Auto synonymous with style and speed. Rahul Bajaj too agrees with his son and says, "His role is to give the company a new life and make it truly global in styling and product range."

In a conversation with Neena Haridas at the Auto Expo 2000 in New Delhi, Rajiv Bajaj dilineated the company's mistakes in the past and its vision for the 21st century.

Bajaj Auto logo Tell me something about the "new image" that Bajaj Auto is seeking.

Bajaj now wants to move forward in a different direction. For a long time now, we have been accused of using obsolete technology that is polluting the air. My mission is to tell the world that this is just a myth. We are moving with time and have the best looking and performing vehicles on the road.

You see, we have lost our dominance in the scooter market. Although we are still the largest selling brand in the country, we don't have that overwhelming brand presence anymore. We lost our position because we failed to convince the consumers that we have environment-friendly, stylish, sleek products.

Hence, for the last two years, I have been working on the agenda of communicating this new Bajaj to people. I started with the Auto Expo 98 and 99 wherein we displayed new sleek products that the consumer had never before associated with Bajaj. Then in 1999, we launched 17 products that were sleek, stylish and high-performers -- these included both new products such as the Bajaj CBZ motorbike as well as upgraded versions of existing vehicles such as the Chetak.

But one change -- a welcome one at that -- in this Auto Expo is that nobody has come to us asking the same old question -- ''Mr Bajaj, why are you still making these old, ugly scooters and polluting three-wheelers?'' This is not top-of-the-mind recall anymore. I think I've been successful in my mission to a large extent.

Rahul Bajaj: the old generation makes way for the young Is this 'new image' an extension of the new young blood that is taking over Bajaj Auto such as you and your cousin Sanjeev Bajaj?

It has nothing to do with old or new people -- it is just the new thinking that has happened in Bajaj. Even the older generation thinks on these lines.

According to the Society of Indian Auto Manufacturers, in the last quarter of 1999, Bajaj Auto's total share in the two-wheeler market fell marginally, while your share in the scooter market rose marginally from 82 per cent to the 83 per cent. Why?

There has been a shift in the market preference from scooters to motorbikes. Now, we have an overwhelming share of the scooter market, but we are very nascent in the motorcycle market. We are yet to make a major dent in the motorcycle market. Hence, our total market-share in the two-wheeler segment fell though we maintained our share in the overall scooter market.

GeneratioNext motorcycles from Bajaj Auto See, the company failed to anticipate the consumer behaviour. We all thought that we are going in the right direction, but we were not. We are to be blamed for our market dominance slipping because we did not see it coming. How else will you explain it -- our research or market experience should have shown in advance that the market is moving towards motorcycles. Anyway, the silver lining in this dark cloud is that nobody -- not even our competition -- saw it coming. So the entire industry is suffering.

Is that why you have started focusing on the motorcycle market now?

Well, our focus on motorcycle is not just because there is a shift in market preferences in favour of mobikes. But this is also part of our changing image -- it is part of our looking stylish with more choice and high performing vehicles. Hence, mid-1999 we launched the Kawasaki Bajaj CBZ which was one of the most expensive in its league and also the best performer. The reason is partly to increase product portfolio and partly to improve brand image.

Sleek scooters and scooterettes are likely to add sheen to the Bajaj image What are the new products that you have planned for this year?

We have displayed about 17 new products at the Auto Expo this year as well. But the difference from last year is that this year we have only displayed brand new products that will be launched during the course of this year. There are no upgrades.

Some of the products that will be launched are the Cajiva, Bravo, Eliminator and the Anhelo. These are meant to be the image boosters. They are not intended at volumes. Whereas others such as the Legend, Spice, Chetak will bring in the volumes. The Eliminator and Anhelo (173cc and 250 cc) four-stroke motorcycles will be priced at around Rs 75,000 and only about 3,000 Eliminator units will be made a month. But now we have a very huge portfolio with a product for everyone.

What is the fate of your two-stroke mobike Prowler, which was slated for a country-wide launch?

We are having some problems with it because the Road Transport Corporations in many of the states are not willing to register it. They fear that it may not be compliant with anti-pollution norms because it is a two-stroke engine. But it is compliant. It has been launched in Pune and Bangalore. Because of this problem, we are not making any more new models of two-stroke vehicles.

Your total exports are just about 50,000 units a year. Why have you failed so miserably in the overseas market?

Yes, this number is nothing to write home about by any stretch of imagination. To make a dent in the overseas market, the brand should command a certain image. But we are not concentrating on the overseas market now because we are in the process of regaining our lost dominance in the domestic market. After we have done this, we will think about the exports market.

How far have you reached on the green technology front?

We are doing extensive research on alternate fuel, especially for three-wheelers. We already have prototypes of autos running on compressed natural gas and battery. We do have a project on for electric scooters as well. However, it will take a while for electric scooters to take on the market because there are still some technical snags involved.

Meanwhile, we are experimenting on running three-wheelers with petrol adulterated with kerosene. In any case, the auto-drivers will adulterate the petrol. Hence the only option is to be proactive and find a solution.



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