Bajaj leaves door open for Chetak's rebirth

Re-entry into scooter segment possible after mobikes reach saturation point: MD

Rajiv Bajaj has uttered the ‘S’-word, finally. For about six years, the managing director of Bajaj Auto has been vocal about shutting the doors on scooters and becoming a “motorcycle specialist”. But there is a twist to this tale. He told Business Standard he would look at re-entering the scooter segment, as that’s a very “logical space” for future growth when the company has reached a significant scale in motorcycles. However, he would first want to “earn the right to do it”.

In 2009-10, Bajaj Auto had stopped production of Kristal, its last scooter model.

Bajaj told Business Standard in an interview: “Today, we are humble enough to accept we have to do the motorcycle game right. But if in five years we become one of the top two, how do you grow the company? After you have 30-40 per cent market share, I cannot grow motorcycle volumes. So, when that saturation is reached, a very logical space for the company to grow would be scooters.”

The firm has ring-fenced its legendary brand, Chetak, from misuse by re-registering it; this will help Bajaj script a possible return in the future. Chetak is the brand that put Bajaj on the two-wheeler map of India and made it a household name through the 1970s, 1980s and early 1990s.

Justifying his decision on Chetak, Bajaj said whenever the company wanted to make scooters, Chetak could be one of the potential brands, because of its iconic status. Chetak, named after Rajput king Maharana Pratap’s stallion, was launched in 1972 and enjoyed a monopoly during the days of the ‘Licence Raj’. At its peak, Chetak had a waiting period of 10 years and was promoted under the tagline ‘Hamara Bajaj’. The last Chetak was produced in 2005.

Bajaj, however, said scooters and motorcycles were both large battles with formidable competitors and it was prudent to engage one’s resources in only one such major battle at a time, especially when one was not the dominant player. But “if there comes a day when Bajaj becomes number one or number two in motorcycles globally — not by a whisker or for a quarter but on a sustainable basis — while retaining its good image and a good bottom line, we will earn the right to look at scooters”, he said.

All that, however, is still some time away. Bajaj Auto, at present, is among the top four motorcycle manufacturing companies in the world, with sales of 3.3 million units as of 2014-15. The company says it has a 10 per cent share of the global motorcycle market, with operations in 40 countries. It is aiming for an addition of 25 countries this year.

Among motorcycles, Bajaj did a mid-life course correction to the Discover, one of its important brands, and repositioned it at the level where it was introduced. This also meant reintroduction of the CT100 and reinvigoration of Platina, both no-frills economy bikes.

This new strategy has shown a sharp turnaround for Bajaj in the entry-level bike segment (priced below Rs 45,000 a unit), where its share has shot up to 40 per cent from under 20 per cent earlier.

A string of premium launches under the flagship Pulsar brand has pushed waiting period to new highs. While the entry-level bikes are aimed at taking on Hero MotoCorp’s products, the Pulsars maintain Bajaj’s leadership in the premium segment.