Past, Present & Global – The Bajaj Story

From 1945, when they first started selling imported two-wheelers in India, to the time they went public in 1960, to the now famous jingle “Hamara Bajaj’ with which they rode into the heart of every second middle class Indian, to the present times, the approximately Rs 12,000-crore Bajaj Auto, the flagship company of the Bajaj group, have straddled the two-wheeler segment like a colossus. Today, they are the second-largest motorcycle producer in the country, selling nearly four million vehicles annually and operating in more than 50 countries.

But they couldn’t keep riding the scooter. With economic liberalisation under Rajiv Gandhi taking the forefront and the opening up of the markets along with the growing needs of a youthful India, looking for faster and more powerful motorcycles, Bajaj Auto began production of motorcycles along with Kawasaki of Japan. Till companies like Bajaj Auto, Yamaha, Hero Honda and TVS started motorcycle production, there were just a few well known two-wheelers in the market – Yezdi, Rajdoot and Bullet.

What Bajaj did was to produce lesser cc variants but, keeping in mind the Indian youth’s thrill for speed, made them light, more fuel efficient and easier to manoeuvre in city traffic. However, the entry of the motorcycle into the Bajaj Auto fold also saw the demise of the ‘pot-bellied’ scooter of the Indian middle classes.

In 2005, after Rahul Bajaj inducted his younger son Rajiv as Managing Director Bajaj Auto, the latter brought in sweeping changes into the company and from the number of motorcycles it was producing it whittled down the different variants of just four – Pulsar, Discover, Platina and Enforcer. It also cut down on its huge number of dealers across the country. Today, apart from manufacturing motorcycles, Bajaj Auto also markets the more powerful Kawasaki two-wheelers in the Indian market.

S. Sridhar. President, Motorcycle Business, of the company, while giving a complete breakdown of the company’s motorcycle business, told Bike India that in the entry level commuter motorcycles, Bajaj sells around 40,000 units with a market share of 33-38 per cent . Then comes the deluxe segment where they sell between 1,25,000 motorcycles and lastly is the sports bike segment, where they sell around 80,000 units monthly. Within this segment is an emerging niche market comprising the 500-1000 cc bikes.

“These two categories are the ones that have a huge impact on the Bajaj Auto business and this is where we have Pulsar and Discover – the first as the sports category and the second as the commuter bike, says S. Sridhar.

Today Pulsar and Discover are Bajaj Auto’s biggest success stories in the last decade and these two motorcycles have accorded them the status of marker leaders. They began production of the Pulsar in 2001, when there was nothing called a sports bike. “It was a space shared by CBZ from Honda and Fiero from TVS and they sold just around 4,000-5,000 motorcycles between them,” says Sridhar. “When they launched Pulsar, at the end of the first year, Bajaj Auto did an average of 3000 bikes, but now they do an average of 65,000-75,000 of this brand. Today the industry share of sports bike segment bikes is 17 per cent of which Pulsar has a 50 per cent share. “

64 per cent in the commuter segment is completely dominated by Hero Honda. A couple of years ago they had complete monopoly with Splendor and Passion. But Bajaj then launched Discover. “Today we sell between 1 and 1.5 lakh Discover bikes in a month,” says Sridhar. 

But it’s the development of international business in the last five to seven years, where Bajaj Auto have made waves. They have sold each one of the roughly one million motorcycles solely under the Bajaj brand. They have not manufactured motorcycles for anyone else to market under a different brand name anywhere else. Their distribution network in over 20-odd countries has slowly but steadily contributed to the growth of the Bajaj brand in the everyday use motorcycle space.

One has to keep in mind, though, that not everywhere in the world is the motorcycle used as a personal vehicle. It’s also used as a commercial carrier – a passenger taxi or a goods carrier in countries of Africa or Latin America. “At the very core customers abroad expect the same thing that customers in India expect, but in the personal segment we find there is more universality, with just a few differences at the fundamental level,” says Rakesh Sharma, President, International Business. 

For example, he adds, in Latin America, buyers have more appreciation for style, as compared to India, while consumers in countries like Iraq where there is an abundance of oil, the issue of mileage is negligible. In a lot of countries fuel is 25 cents a a litre so there too mileage is not an issue. In other countries durability is preferred above all else, and where consumers have enjoyed Japanese products for a long time the expectation of the customer on quality issues is very high. They will have superior expectations on the paint job, the sound of the engine, the features etc.

But despite all these ‘expectations’ from the consumer, Bajaj have never felt the need to design a bike specifically for a country.

“Once a bike is designed in India , the homogeneity at the fundamental level ensures there is a very high probability of acceptance,” he says. But one does have to keep an eye open for the competition and that comes from two sources. The first are the Japanese comprising the big four – Honda, Yamaha, Suzuki and Kawasaki and – the other are the Chinese, where there are probably a hundred companies with a thousand brands competing in the market in the space they are operating.

But Sharma avers that Bajaj’s focus has always been motorcycles for commuting. “These could be utility motorcycles for the daily commuter or the deluxe commuter or these could be sporty motorcycles, which follow an everyday format for the consumers,” he says, adding “We are not yet into motorcycles used for high-end sports which is where the Europeans rule the roost or at high end leisure like the Harleys.”

So in the everyday space, Bajaj face stiff competition from the Japanese and the Chinese. Region-wise, in Africa the competition is largely from the Chinese who basically operate on a price USP, while in Latin America they have to tackle both the Chinese and the Japanese. The Japanese operate on low investments, but with very solid brand names and quality products like the Indians. In south East Asia again, it is largely the Japanese. So to that extent competition is different.

Says Sharma, “We are able to prove to the consumer that he can take a handsome premium over the Chinese, and get a product that is far superior and durable and while dealing with the Japanese we tell them the product is as good on performance and superior in terms of features and styling, and still available at a slightly lower price.”

A revenue of little under one billion dollars and 1.2 million vehicles (around one million motorcycles and 200,000 three wheelers) this year, in exports, is proof enough that the strategy is succeeding. Asked how this measures up to the rest market in those countries, Sharma explains that they track the percentage of sales coming in from markets where they are either number one or two. “I would say 80 per cent of the one million bikes are coming from markets where we are No 1 or 2. So if I see our key markets, 40 per cent of our markets are in Africa, 25 per cent in Latin America and 35 per cent in South East Asia,” he explains.

Bajaj Auto are No 1 in Uganda, Kenya, Columbia, Central America, Sri Lanka, and Bangladesh, No 2 in The Philippines, Indonesia, Nigeria and Peru and No 4 in Argentina. Not a bad start for a company that went into overdrive internationally with their motorcycles around 2004. (Bike India)

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