Bajaj scooters may still get a kiss of life

Nearly three years after Bajaj Auto Ltd (BAL) pulled the plug on scooters, and stopped producing them at the Pune plant, Mr Rajiv Bajaj, Managing Director, has given the assurance that the company will return to making scooters.

The promise, however, comes with the rider that this will happen only after BAL gains recognition as a player of importance in the global motorcycle market.

“We will make scooters at some point of time,” Mr Bajaj told shareholders at the company's annual general meeting (AGM), adding “but we have to be a globally dominant maker of motorcycles before that.”

Outlining the strategy, he said BAL wanted to become a specialist in marketing. “I don't think motorcycles that succeed are (necessarily) better products, they are perceived as better products,” he said, adding that he wanted to compete by creating a right perception.

“When markets evolve, businesses have to be specialised, and only branded businesses make money.”

The way to specialise is through sacrifice, Mr Bajaj said, maintaining that by sacrificing scooters, BAL came to be perceived as a motorcycle specialist. “Though we make 3.5 million bikes (a year), our global market share is only 10 per cent,” he pointed out. “There is no reason why we cannot push for 30-40 per cent and do one thing well,” he said, reiterating, “We never said we'll not make scooters, not at this point.”

Speaking about the car project, Mr Bajaj said that a new platform of three and four-wheelers was being developed and would most probably be made at Waluj which will help keep costs down. “We are not trying to make cars, but money-making cars,” he emphasised, adding that BAL believed in operating with 20 per cent EBITDA margins.

“We will put out a four-wheeler by 2012 and the capex on the project will be less than Rs 500 crore,” he said.