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Scooter’s sunset marks son-rise

business Updated: Dec 13, 2009 21:05 IST
Sumant Banerji
Sumant Banerji
Hindustan Times
Scooter’s sunset

They symbolised the aspirations of middle-class Indians in the 1970s and 80s. They are both fading out. And thereby hangs the change of a generational shift at one of the nation’s celebrated industrial houses, and a pioneering car maker.

Come March 2010, Bajaj scooters that became a synonym for personal mobility and Maruti 800, the entry-level car that became a family dream will both go off the roads — the former entirely and the latter in the metros to begin with.

While the end has been largely due to the fact that they became obsolete and the demand for them in the market fell over the last decade or so, for Bajaj, which was once the largest producer of scooters worldwide, it is part of a strategic shift from scooters to motorcycles – and also in some way, the reflection of a change of baton from father Rahul Bajaj to son Rajiv, who is the current managing director of Pune-based Bajaj Auto Ltd.

The shift though gradual has been sure footed. In the ten years between 1999-00 and 2009-10, the share of scooters in Bajaj Auto’s overall sales fell from 65.23 per cent to just 0.31 per cent. The legendary Bajaj Chetak was launched in 1972 and boasted of waiting lists for two decades before being phased out in 2005.

While Maruti 800 gave rise to snazzier models from Maruti Suzuki’s own stable and several from its competitors brought in by economic reform, in the two-wheeler industry itself, the share of scooters fell between 52.5 per cent to 21 per cent.

The company’s current managing director Rajiv Bajaj is often credited with this strategy which saw the company successfully claw its way back to profitability and credibility after a bleak 2000-01. That was the year when for the first time Bajaj Auto saw its number one position being usurped by Hero Honda—which still retains the top slot.

Smarting under these circumstances, Rajiv who had just become the joint MD, invested heavily on research and development of motorbikes. A new, more efficient plant took roots at Chakan near Pune, while the old Akurdi plant that accounted for half of the company’s scooter output saw some job losses before it was completely shut down in 2007.

“We want to become the largest producer of motorcycles in the world in future and when we want to achieve something this big, some sacrifices need to be made,” says Rajiv Bajaj.

“Scooters do not give us the volumes or profits anymore like the motorcycles and it is a global trend.”

The scion met with resistance from his sentimental, old-world father Rahul, a self-confessed scooterwalla. The elder Bajaj was unwilling to let go off the Chetaks and Priyas that had made him an industrial doyen. He wanted Research and Development to add motorbike qualities to scooters.

“The scooterwalla in me is waiting to see the outcome,” he said in the 2002-03 annual report.

That product was the 4 stroke Chetak wonder gear, which failed in the market, showing the way for the company.

“Motorcycles are rugged and more fuel efficient and the rural markets lapped it up,” said Rakesh Batra, automotive sector leader at consulting firm Ernst & Young.

“Further lot more choices were available by the turn of the century and that helped in the transition. India simply evolved in line with the global market,” he said.