Bajaj eyeing product, mkts innovations to stay No 1

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At the SIAM , or Society of Indian Automobile Manufacturers, meet today, Rajiv Bajaj , MD, Bajaj Auto , said growth is not a major concern for auto companies as the market is huge. "I don't see reason for growth constraints. Our job is to keep this segment growing with innovations in various areas, in terms of products and markets, to maintain our dominant position."

 

He sees XCD volumes of 75,000 a month once the various variants are launched by fiscal end.

 

The company, he said, has stayed away from festive season sops for sometime now. "These are short-term measures that only bring forward long-term sales. They just disturb the normal sales pattern and create peaks and values. It's a complete distortion."

 

Excerpts from CNBC-TV18's exclusive interview with Rajiv Bajaj:

 

Q: Is growth in the two-wheeler or three-wheeler industry a major concern?

A: Every business has a cycle and one must recognize that. Each company's situation is different. Bajaj's sales are not limited to the domestic market. The global market for two-wheelers is large. We are a small player there as of now. If we say to ourselves that growth is limited, it is nothing but just a limitation of our own imagination. Last month, we sold close to 200,000 motorcycles, a third of which were exported. That is still a very small number because about 40 million two-wheelers are sold every year in the global market. So, why should Bajaj feel constrainted for growth when there is such a big market?

 

Q: Domestically, the growth rate was lesser than what one expected earlier. What is your estimate for the overall industry this year and as far as Bajaj Auto is concerned? What kind of volumes are you projecting by fiscal-end?

 

A: Industry growth is marginal this year. Manufacturers' sales to dealers show almost double-digit growth. , But at a retail level when compared to last year, this growth is not as big as that. As far as Bajaj is concerned, our focus is on the 125 cc and above segments in the two-wheeler market. The segment which was non-existent a few months back contributes close to 40% sales and is growing all the time as people want to move up from the average 100cc motorcycle to something more special. It is in this segment that we are the leader, with close to 50% market share. This segment is growing and we have a dominant position there. Our job is to keep this segment growing with innovations in various areas in terms of products and markets, and to maintain our dominant position there.

 

Q: The XCD when it was launched probably at the retail end did not get the kind of response that was projected when it was launched. How are you going to step up volumes for XCD and how many more variants are you planning?

A: When we launched the XCD platform on September 9 last year we estimated volumes of 75,000 units a month. XCD 125 was launched last year and was the first product from this platform. By no stretch were we trying to say that this model alone would sell a million a year.

 

It is currently averaging about 27,000 vehicles each month, which is more than the total motorcycle sales of many companies in India such as Yamaha. If in a year's time the products clocks close to 30,000 a month, then it's good. The next product from this platform will be launched this month. The third variant will follow in December and the last one by fiscal end. With the launch of these four products from this platform, we are quite confident of doing sales of 75,000 units a month.

 

Q: With the festive season approaching, dealers and manufacturers tend to offer various sops to consumers. Do you think that will put further pressure on margins?

A: We have stayed away from these tactics for sometime now. These are short-term measures that just disturb the normal sales pattern and create peaks and values which are a complete distortion. There is nothing in India to show the consumer in India is price sensitive. There is everything to show he is more focused on brand and quality. So, this tendency for discount and promotion comes not from the customer but from marketing people of companies.