Category: India

Bajaj, while catching up with the Indian scooter market they abandoned a couple years ago, is now looking to catch a piece of the growing super-cheap automobile market. Forbes reports Bajaj is looking to form a joint-venture with Renault to produce an automobile to compete with Tata‘s highly-anticipated US$2,500 car.

The last month has been busy for Bajaj:

On February 9, 2007, Bajaj Auto announced a demerger plan that would seperate the company into two different organizations. An automotive group would be headed by Rajiv Bajaj, with a finance and insurance group run by his brother Sanjiv. Rumors began to circulate that there is a disagreement between the brothers, reminiscent of the the ugly fight between their father Rahul and his brother Shishir that resulted in an earlier break-up the business empire started by their grandfather Jamnalal Bajaj. Rahul, while admitting that his sons had strong and differing personalities, played down any animosity.

Around the same time, Bajaj Auto announced they’d scale back their 100cc motorcycle segment and focus on larger bikes at a similar price-point. A week later, a 200cc Pulsar was released, and and some new commercial vehicles were announced. Bajaj announced a “high end” 220cc motorcycle in the works, announced a 2-wheeler plant in Brazil, and hinted they were looking at the consumer automobile market, and Bajaj stock rose substantially.

A few days later (Feburary 16) the Financial Express reported that Bajaj Auto had started a feud with Hero Honda by planning to build a luxury Bajaj “Pro-Biking” boutique right next to Hero Honda’s corporate headquarters. The showroom would be the second of 55 such shops planned for 2007 with “a technology centre for in-depth understanding of the technology and a specially designed dynamometer for inside showroom test ride.” Bajaj plans to invest $17.5 million in the Pro-Biking showrooms. (A later storie used the figure $67.5 million)

The same day, Sri Lanka banned the import of 2-stroke three-wheelers. Sanjiv was unfazed, claiming that a switch to 4-stroke engines would be nearly effortless.

On the 18th, Bajaj offered bikes for sale on its website for the first time.

On the 21st, Bajaj Auto announced they’d make a decision about the demerger in May.

Feburary 24th brought news that Yamaha, in the midst of joint-venture talks with Bajaj Auto, was considering abandoning the Indian market.

On the 26th, amid rising inflation and labor unrest, Rahul represented industrialist India on a television show called “Citizen’s Budget. The same day, Sanjiv announced that Bajaj had exported 3,000 knocked-down Pulsars to Iran, which will go on sale there in April.

On March 3, Bajaj executive S Sridhar cited bloggers as essential to Bajaj’s marketing strategy (you’re welcome!). Sridhar told the Economic Times that Pulsar reviews were online withing three hours of the launch, and that Bajaj marketing executives watched blogs very closely for feedback (hello, Piaggio!).

On March 7, Bajaj slashed prices on its 100-cc Platina motorcycles to clear the way for bigger models as expected. Meanwhile, Bajaj Allianz, the insurance division who had earlier in the month signed a deal with BMW for auto insurance, announced they were targeting the retail bank sector and applied for a banking license. The talk in Pune, however, was more likely the Industrial Sports Association basketball final, where Tata Motors and Bajaj met that evening. Sadly, we can’t find a result, but we hope Bajaj pulled off a victory. Probably not, because yesterday, they announced they were raising prices on most models and that they would not take over Yamaha’s operations. Interestingly, they restated their committment to abandoning the 100cc motorcycle segment while announcing that a new 1-million capacity 100cc Platina factory in Uttarakhand will open in April.

So what did you do last month? Yes, we just posted six thousand words about Bajaj and didn’t even mention a single scooter. But we do have the dancing Rahul photos in our possesion, so keep reading…

From India’s Financial Express: a brief piece on how the Hero-Honda collaboration transformed the Indian scooter market into a motorcycle market. Bajaj and Hero Honda have been battling it out ever since, with Bajaj insisting that motorcycles are their top priority even as they backpeddle into the scooter market they abandoned this spring..

Following last month’s reports that Bajaj was looking to re-enter the scooter market, Moneycontrol India reported last week that Bajaj will launch the Kristal (for the ladies) in January, and re-introduce the Blade. Rajiv Bajaj, who seemed creepily gleeful a year ago when he proclaimed the Chetak dead, is hyping his mysterious hi-tech blockbuster 150cc scooter to the press and making it clear that it won’t be secondary to the Bajaj motorcycle line; it will be “insightfully positioned” (is that Rajiv for “boutique?”) at only 100 of Bajaj’s 500 dealerships. You’d think Bajaj could learn from Piaggio’s mistakes, even if Piaggio can’t. “Given that the Honda Eterno sells 90,000 units a year,” says Vespa Club of America historian John Gerber, “I have to wonder if they would try to compete in this niche with another geared scooter.” I think that seems unlikely, but I don’t think for a second that Rajiv would have any problem pillaging the “Chetak” name.