Having championed Bajaj Auto’s shift from scooters to motorcycles, and been the force behind the twin successes of the Pulsar and Discover, Rajiv Bajaj told Hindustan Times that he is now looking at replicating the company’s success with bikes in the car space with his maiden small car in 2011.
Excerpts from an interview.
Things are looking up for the auto industry. Is it the end of the downturn?
My own view is the factors that caused the upheaval such as commoditisation, overcapacity etc, continue . They have just been suppressed for the time being by easy liquidity, incentives of subsidies. Since the causes are still thriving, I am sceptical of the depth of the recovery.
How bad was the recession for Bajaj Auto? You posted very good results in the July-September quarter. Have you finally turned the corner?
I am a firm believer that problems or solutions all lie more inside us than outside. About three years back we were close to leadership position. The last two years have been difficult. The difficulty is less because of external factors and more due to internal failings: not sticking to our core strategy and complicating our execution. The minute we put that right, the business has grown again.
Your core business is in the 150cc segment and with the Pulsar. But you are trying to re-enter the 100cc segment. How does that fall in line with your overall strategy?
In the ’60s, ’70s and the ’80s, Chetak was the centre of Bajaj. Now that the market has moved to motorcycles, we have moved to motorcycles.
The Chetak at the centre has been replaced by the Pulsar. We are known for it, and in order to establish that we decided to be the opposite of market leader Hero Honda. Instead of making small, sober, affordable motorcycles, we made bigger, faster, sexier and somewhat more expensive bikes.
There are two sets of consumers — those who want the faster, sexier bikes and those who want commuter bikes. For the former we have the Pulsar, for the latter we have the Discover.
Discover is not really different from the Pulsar in terms of styling, features or patented technologies, and the consumers see the link. So long as we get to make and sell more Discovers and Pulsars, Bajaj will do well.
In all of this where does your small car feature?
The world does not need another automaker. There are too many people trying to make cars, and unfortunately, most are trying to make every possible type of car. This has commoditised the market where people directly or indirectly keep competing on price.
Our car will be derived out of skills vested in us by virtue of making motorcycles. Can a car be made with a motorcycle DNA that is acceptable to the market? The jury is still out on that. If we succeed, it will be interesting. Our aim is to not compete on price but on fuel economy... we are targeting double of what any car gives on the road today.
Is the car ready or still under development?
It is still under development, because what we are trying to do has no precedent. Technology is fairly mature in the automobile industry, so it is not easy to simply double the fuel economy without any fancy technology.
We have to also keep it affordable and ensure it remains profitable to the company. We have some ideas and we are hopeful, but at this point in time we cannot say whether we have cracked this.
This sounds more like an experiment. Chances that the car may not be ready for its 2011 launch?...
2011 is certainly the target for the launch. We are not entirely at an experimental stage. To do something new, a few months here and there do not matter. What matters is that the product has to be right.