Rajiv Bajaj may want to impress people with his plans to build a small car but his attempt at one-upmanship has only left him with more detractors. It was quite unbelievable that the elder son of Rahul Bajaj should try and steal the thunder from a personality like Ratan Tata by talking about Bajaj's plans for a small car when the country has waited four years for the Rs one lakh car from the Tatas. That he didn't succeed should teach him something.
The 42-year-old Bajaj has, in a restructuring of the family business in May last year, inherited the two-wheeler business (quite unfairly, say some). It's not surprising that he wants to venture into cars; without doubt there's a huge market within India and it should be possible to export them too. So as a business proposition it makes eminent sense.
Rajiv, who's a bit of a technology freak and a great believer in R&D, feels it's important to be able to develop a car by himself and not rely totally on an outsider. "I will never get into car making if I cannot develop it myself and have to depend on someone else. That would be a fatal mistake," he had said sometime back. It was probably around that time that Bajaj started working on the car. The next thing we hear is that Bajaj is teaming up with Renault. However, he claims that the prototype which has been developed, will stay much the same in substance though the external appearance might change. Nevertheless what matters is not whether Bajaj ropes in a partner but that the firm should be able to pull it off because developing cars is not going to be cheap.
Meanwhile, Rajiv, who rarely misses his morning yoga, needs to keep his eyes on the two-wheeler business. The motorcycles market seems to have hit a speedbreaker "" sales for April-December 2007, at 1.6 million bikes, are about ten per cent lower than they were for the same period in the previous year.
What's more, the competition will only increase. To be fair, Bajaj hasn't doesn't too badly. Despite having to take on a formidable competitor like Hero Honda in the marketplace, the Pune-headquartered firm has managed to eke out significant market share in certain segments.
For instance, the 150cc Pulsar in the premium segment has been a reasonable success and Bajaj has a share of close to 60 per cent in this space. It has also managed to grow its share of the executive segment "" traditionally the stronghold of hero Honda "" to 30 per cent plus with models like the Discover and the 125cc XCD.
Bajaj has pinned its hopes on the 125cc XCD, which it launched in September and had targeted a run rate of 40,000-50,000 bikes a month. Rajiv's strategy of moving away from lower-end 100cc bikes and trying to induce customers to upgrade to 125cc bikes is a sensible one.
For Bajaj Auto, the strategy means more money since operating margins on smaller margins are wafer thin. Rajiv may also want to focus on scooters; as the once market leader Bajaj seems to have lost its way here because it decided wrongly, that there was no market.
If he wants to achieve his ambitions of being a global player and take on Honda at home, as he says he does, Rajiv will need to work much harder, be less litigious and a little more humble.
