Strategy is nothing but Specialisation - Rajiv Bajaj

In an exclusive interview with ET , Rajiv Bajaj , MD & CEO, Bajaj Auto, throws light on how the motorcycle maker's three 'power' brands will drive growth and his game plan to become a global leader in bikes. Edited excerpts:

On the evolution of the Indian motorcycle industry over the past decade or so:

What is the one word each manufacturer owns that is in the mind of the motorcycle consumer? In my view, the word that Honda owns is quality, Hero owns is mileage and the one word Bajaj owns is power, thanks to the Pulsar. If it's Yamaha, that word is style. The one word that TVS owns is cheap (not in a bad sense) but as in the least expensive.

If this is true, then it points to a very high state of evolution in the market place where consumers are able to clearly associate brands with positions. Each of the above-mentioned brands has a clear position.

This has its pros and cons. The pro is that, for instance, if a consumer wants power, other things being equal, he will come to you. So, the brand becomes safer in that sense. It is relatively insulated. The con of that is people who don't seek power won't be really too interested in you-but I think the advantage is greater than the disadvantage.

On Bajaj's position:

We got back into the game with the Pulsar. People buy the Discover because it reminds them of the Pulsar. It's like a younger brother of the Pulsar; or a 'domesticated' Pulsar. There is this clear divide in this market place. Hero has a 71% share in the 100cc segment; I find that, after having a satisfying experience with Hero, consumers move up and they come to us. So, people who want bigger and stronger bikes come to us, but they will not buy a 100cc from us.


On whether Hero MotoCorp will continue to be number one because most consumers want fuel efficiency:

Yes, it will, if mileage continues to remain so important- unless someone is able to make a technology breakthrough and take it away from them. For example, Hero bikes give 65kmpl efficiency. Being engineers, we are always thinking of how to make something better. We don't know the difference between better and different. The consumer does not think better, he thinks different.

What I mean is that if Hero is delivering 65kmpl, we would be happy if we made something delivering 70kmpl. However, consumers can't tell the difference as 65 is only an average. The first time the consumer can actually perceive a difference is if there is a minimum 20% difference. A 33% difference is even more noticeable, while a 50% difference cannot be missed.
That's why we made the Pulsar 150cc. It's not a coincidence that 150cc is 50% more than 100cc. The question now is can anybody produce a technology that is 50% better? My view is that to move from 65kmpl to 78kmpl (a 20% difference) is difficult; from 65kmpl to 70kmpl has happened, but that is evolution, not a revolution.

On how Bajaj can create that difference:

We are now less in the engineering and more in the marketing industry. We have to be perceived to be different, with credibility; and there are also not too many tech levers to do this. For this, you might have to create a perception that you are at loggerheads with your father and will refuse to ever make scooters-thereby creating a perception that I am wedded to the Pulsar. I believe that one day everybody will buy powerful bikes; it may take five years or 15 years, but you have to direct the whole organisation in that direction. Strategy is nothing but specialisation. So, we have to stay where we are and try to expand the appeal for what we stand for, which is power.


On the future for the Pulsar, which is now a decade-old:

We follow a platform strategy. One platform is 125-200cc, from which we make the Pulsars and the KTM bikes. The next platform is 250-350cc, and there will be both brands out of this also. If the Pulsar has to go any further, we need another larger platform, but that would not be right as the Pulsar is not a niche bike like a Harley or a Ducati. So, 350cc may be a good place to stop as of now. Ten years down the line, the Pulsar can go much further.

On the need for more brands besides the Pulsar, Discover and KTM:

Many industries have a three-tier structure. People at the bottom buy on price, those at the top for exclusivity, and those in the middle for value for money. The most successful car brands of the last 50 years are Toyota and Volkswagen. They have understood how to position their brands and play the market. For VW, it is Skoda at the bottom, Audi at the top and VW in the middle. Toyota does it even better with Daihatsu at the bottom, Lexus at the top and Toyota in the middle.