Big automobile firms should put money where the mouth is: Rajiv Bajaj

Bajaj Auto will start selling the Husqvarna, KTM and Bajaj-badged electric two-wheelers – including scooters, step-thrus and mopeds – beginning 2022 from its Pune plant as part of a partnership with its Austrian partner, KTM. Rajiv Bajaj, managing director, Bajaj Auto, tells Shally Seth Mohile that the electric two-wheeler platform will spawn one model each for the three brands. Meanwhile, Bajaj’s EV plans come amid the government’s resolve to allow only electric three wheelers and two wheelers (under 150cc) after March 31, 2023, and 2025, respectively. Edited excerpts:

What has prompted Bajaj to choose scooters, mopeds and step thrus—the segments in which you currently do not have any presence, for the electric two-wheeler strategy? 

If we just put out a stylish, high-end bike worth Rs 5 lakh, it’s not going to solve the mass problem that EVs are suppose to solve for the cities – the solution has to come out of smaller vehicles. Had we not mentioned scooters, mopeds and step thrus, people would have assumed, our two-wheeler EV offering will be confined only to motorcycles. Besides the charging infra, battery costs and range anxiety, the other hurdle for the EVs is the vested interest of the current original equipment manufacturers (OEMs). Unlike new age, pure electric vehicle companies, which will fight tooth and nail to succeed, traditional auto companies will give up too easily if things don’t pan out well. From this strategic point of view, the advantage of Bajaj, Husqvarna and KTM is that we don’t make any scooter. Therefore, if we launch electric two wheelers that can catch fancy of customers, it will complement instead of hurting the core business. Even if we lose money in it for a few years, our core business remains intact and we are hurting someone else’s. If we do not invest for the future and leave that prerogative to the new age companies (Ather, Torque) it will not go down with customers.

Can you elaborate how the models will be positioned and will it be a top-down approach?
 

Each of the three brands will have a top-down approach in terms of technology and price and will have a distinct identity. While KTM is a hot racing brand, the Husqvarna, because of its Scandinavian lineage, is a cool brand. Bajaj, on the other hand, is a value-for-money, smart brand. The models will be urban-centric. Even if it harms the bottom line, we need to see EVs as an investment and put out products at price points that consumers will find attractive. People will go for a model that is priced at Rs 1 lakh as they can easily recover that in two years. That price may not be profitable immediately but that’s fine. We saw something similar with the launch of Pulsar in India and when we introduced models in Africa. With the best technology and price, the models have to not only attract but almost mesmerise the “early adopters” who are followed by the “herd.” Only 2-5 per cent buyers are early are adopters, the rest, chicken. They are the herd who will follow the pied piper.

Can you explain the distribution strategy and target buyers for electric two wheelers?

Bajaj has a unique advantage compared to rivals because we have 500 KTM dealerships in India, the only premium brand that can boast such a wide presence. The lowest KTM is priced at Rs1.5 lakh.  So the KTM buyers or anyone in the family of such buyers wouldn’t mind stretching the wallet a bit more EVs if they see enough merit in it. Also, KTM outlets are newer, city-oriented and employ young professionals.  With its conversion rate of 50 per cent, it has just the right strata of customers walking in. We are hence actively considering them for retailing the electric two-wheelers.