Madhur Bajaj, president of Bajaj Auto, said at the company AGM on Saturday that investment in expansion would take place in a phased manner over a period of five years. All the new investments and expansion programmes will be within Maharashtra.
On the minuscule expenditure towards research and development, Bajaj said the company has not set any fixed budget or ceiling on R&D. If we have any project that makes sense, we would invest in R&D, he said. The management of Bajaj Auto had to face the wrath of shareholders at the annual general meeting as they questioned the company's low R&D expenditure.
The company clarified that the drop in R&D expenditure as a percentage of turnover was from 0.95 per cent to 0.91 per cent in fiscal 1995-96.
However, the annual report of the company had stated that the drop in R&D expenditure was to 0.55 per cent from 0.95 per cent.
In a move to push exports, the company plans to set up new assembly lines overseas. Brazil, Egypt, Philippines are now the thrust areas for the company, Bajaj said.
South America, he said, was an emerging market where exports for the year ended March 1996 were about Rs 54 crore, up from Rs 37 crore in the previous year. The company has plans to achieve a 25 per cent annual compounded growth in exports, he added.
Car project doublespeak
Shareholders who attended the AGM on Saturday failed to get a firm reply on the much talked-about car project.
Rahul Bajaj, chairman and managing director gave conflicting signals while answering the volley of queries. Why should we go in for a car project? To make losses? he asked.
There is no status in making cars, he said, and insisted that volumes were in the two-wheeler business. In a country like India, making two-wheelers, too, is a status symbol, he said. At the same time, he refused to say categorically that the company had dropped its plans for a car foray. He even interrupted those who asked him, Now that you have dropped the car project, what would you do with the huge surplus funds?
