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RE 60 might be priced higher than Nano, but cost of ownership will be lower: Rajiv Bajaj

Interview with Managing director, Bajaj Auto

Surajeet Das Gupta  |  New Delhi 

Rajiv Bajaj
Rajiv Bajaj

With the law ministry giving a green signal, decks have been cleared for the introduction of a new category of vehicles in India. Quadricycles can now ply as public transport vehicles within city limits. Two years since he unveiled the RE 60, Rajiv Bajaj, managing director of Bajaj Auto, spoke about his plans in the segment and gives some indication of its price, in an interview with Surajeet Das Gupta. Edited excerpts:

A notification allowing quadricycles as intra-city commercial vehicles might be cleared soon. What are your concerns now?

It’s a shame that it took two years (for the notification) after the product was shown in 2012. I have been talking about it since 2010 and had said eventually we would be allowed. It is disenchanting how vested interests have tried to stall it because they think everything with four wheels is a car. Instead, they should have been worried about how some like Scooters India flout rules by making overweight three-wheelers.

Are you worried about a possible clause in the notification that you could sell your vehicles only after six months?

I cannot understand the logic at all. It is blatantly anti-competitive and against (the principles of) free market. It is basically meant to give time to vested interests and is surely not in favour of the consumer. It’s like telling Steve Jobs ‘please hold on to your product so that BlackBerry can reach your sales numbers’. We need to ask whether this rule is being made for Tata Motors or the consumer.

Does it make any sense that the product would be allowed only as a commercial vehicle and not as a personal one?

I can’t understand this logic at all. Is it less safe than a three-wheeler which transports passengers? There is no rule stopping me to buy a three-wheeler and use it for personal use. There is no such rule for any other vehicle.

What is the capacity of your Aurangabad plant?

In the first phase, we will make 5,000 quadricycles a month. We will make it in our Aurangabad plant, so we do not have to make an investment on land or factory. We will need some investments in a press shop, a weld shop and make some changes in the assembly line, which already makes three-wheelers for us. How big the market is cannot be predicted, as it is a new segment. I won’t be able to say whether 99 per cent of three-wheelers will upgrade to this or only one per cent.

I presume you have got a good response from state governments. But will you require permits?

There is no meaning to have permits, as demand will always meet supply. There is one state that has removed the permit system and that is Gujarat. So, I do not know whether the quadricycle will require a permit or not it could vary from state to state. The authorities in West Bengal have said they would require about 2,000 quadricycles but we can only sell after the technical specifications come in. We have shown the product in all key states.

How will you price it? Will it be lower than the Tata Nano?

Not necessarily. After all, there was a time when the Nano used to be sold at Rs 1.3-1.4 lakh ex-showroom and our three-wheelers were selling at a much higher price. They were selling only 2,000 a month, while we were selling 10,000 a month. For us, the key is cost of ownership and there we score because we will give double the mileage of the smallest car. Similarly, Tatas have products like the Ace or Iris, but these are heavier and positioned as goods carriers. The RE 60 has lower weight and, therefore, gives more mileage. So, that’s the difference.

First Published: Tue, February 11 2014. 00:47 IST