BAjaj2 - Bajaj Autos Rajiv Bajaj: 'We Must Adapt to the...

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Bajaj Auto’s Rajiv Bajaj: 'We Must Adapt to the Market's Evolution' Published : April 21, 2011 in India Knowledge@Wharton These are exciting times for Bajaj Auto. On the last day of fiscal 2010-2011, the company rolled out the 125 cc Discover motorcycle. The new model is not just filling the gap in Bajaj Auto's Discover range. (The Discover 100 was launched in July 2009 and the Discover 150 in May 2010.) The new Discover should help the company make further inroads into the market share of leader Hero Honda. Brand Discover sells around 120,000 units a month; the new model should push up this number to 150,000. Bajaj has 27% share of the motorcycle market while Hero Honda (which has severed its ties with Honda and will soon announce a new brand name and identity) still has more than 50%, led by the world’s largest-selling two-wheeler -- Splendour. Bajaj Auto expects 20% growth in sales in 2011-2012. Bajaj has acquired a 38% stake in Austrian bike maker KTM Power Sports and will be introducing products from its range in the Indian market. The first is likely to be the Duke 125 cc. Also on the cards are superbikes from its long-standing partnership with Kawasaki of Japan. (The U.S.-based Harley Davidson opened its first dealership outlet in the country last year.) There has also been news that a Bajaj four-wheeler is in the works. “I have driven the prototype of this vehicle,” says Bajaj Auto managing director Rajiv Bajaj. Though he is unwilling to talk more about it, the indications are that it will be in the US$3,000 range and have a mileage of 30 km a liter (about 70 miles a gallon). It is based on the two- and three-wheeler platform and cost structure. A planned marketing tie-up with Renault-Nissan may fall by the wayside if the latter finds this product of the “frugal engineering” mindset not fitting with its image. But Rajiv Bajaj is prepared to go to market on his own. All of this should help lift some weight off the 44-year-old Bajaj’s shoulders. He has been under pressure since he assumed the role of managing director in 2005 and even earlier when he was joint MD. He took the company into motorcycles while abandoning its mainstay – scooters. In the process, he lost leadership in the two-wheeler market to Hero Honda. He also decided to abandon the umbrella brand "Bajaj," letting the productsbattle it out based on their own brand-names. The company – including his father and chairman Rahul Bajaj – was aghast. Analysts wrote off both Rajiv Bajaj and Bajaj Auto. No longer. Market share is growing even as Hero Honda slips. And at the top of the agenda is profit share, which Bajaj says is more important to him than volumes. Last year, Rajiv Bajaj was one of the The laconic Bajaj, who has been avoiding the media for some years now, interacted with India
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BAjaj2 - Bajaj Autos Rajiv Bajaj: 'We Must Adapt to the...

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