Full transcript: Rajiv Bajaj's exclusive interview to Moneycontrol

Latha: Rahul Bajaj told me, with a twinkle in his eye, that his happiness was that my son bested me.

Rajiv Bajaj: "Do what you think best, but be the best in what you do." We are surprised, in the last 12 months, by the kind of growth UP has demonstrated. Indian two-wheeler safety regulations are actually ahead of Europe.

Latha: What's TVS getting right?

Rajiv Bajaj: This you must ask my good friend Sudarshan. Brands do not travel inter-segment. Bajaj is actually a 21 or 22% EBITDA company. In a matter of weeks, the entire Indian EV industry will grind to a halt. You know, all Chetak dealerships would have to shut down. You may be surprised to know that I do not own a suit. I simply don't own one, and my uncles have always lived in his shadow. He said, "I don't want to start another company, I don't want another board, I don't want another six board meetings." I wish I could cook; I wish I could sing, but I wish I could dance a little bit, which I can't.

Latha: The one sector that has contributed the maximum to India's manufacturing sector is actually the auto sector. It accounts for 49% of India's manufacturing, and to the credit of the two-wheeler and four-wheeler industry, from the word go, they indigenized the entire ecosystem, and both the final product and the ancillaries are globally competitive.

Today, in our Moneycontrol series, “Latha & The Leaders”, I have with me one person who has kind of seen it all, enabled a better part of it, and more importantly, whose innings in the auto sector more or less corresponds to mine in journalism.

I have with me the delightfully intelligent Managing Director and CEO of Bajaj Auto, Rajiv Bajaj. Rajiv, thank you very much for your time.

Rajiv Bajaj: Thank you, Latha, it's a pleasure.

The purpose of the show is really to look for lessons in our respective areas and to see whether we are better able to understand the future that will be upon us, but in this case, I'm going to start with the future. First of all, congratulations — your new term, five-year term of MD and CEO, has just been sanctioned by shareholders.

The ordeal continues.

Okay, if you say so. It's an ordeal you're enjoying. But anyway, what is the goal for the next five years?

You know, my goal remains the same as it has been for the last 30 years. I'll tell you something I heard at the Japan Auto Show, Tokyo Motor Show, in 2001, I believe. Rosabeth Moss Kanter was the anchor, and she was asking a Honda CEO, basically, why would Honda exist, you know, and Honda is a company I greatly admire, and I will never forget what he said. He said, "Honda will exist because society will want Honda to exist," you know. So the way I see our task — and my job — is simply this: that we have to give people a reason to permit us to be around.

Now, in marketing terms, that's called differentiation or having a unique selling proposition, and to that objective, our goal as Bajaj has been to have a unique business model of being the world's most versatile motorcycle maker. You know, we never said to ourselves we'll be the biggest motorcycle maker or the most profitable motorcycle maker or the best motorcycle maker — whatever that means. We said the most versatile.

Now, this has implications for markets because, for example, we are a market leader in Africa at one end of the spectrum, selling motorcycles for as little as $500 and trying to make money on them. And we are also a participant in the high-performance markets of Europe, for example, selling a 7,000-euro motorcycle and, of course, making a lot of money out of that. So whether it's your choice of markets, your brands, your brand architecture, your product platforms and the modularity in production, and, of course, the skills of your people — all of this is directly influenced by your choice of strategy. So my job, as I have understood it or defined it for myself, has been to enable Bajaj to be the most versatile motorcycle maker in the world, and I think, to a large extent, we've been able to achieve that.

Definitely, you're present in perhaps the entire range of price points and product categories. But now, when you look at the market, will Puslar continue to be your bread and butter, your 70%, or will it shift to the 400 cc, or will it shift to EV? What do you think will be running your best horses?

Well, sometimes people ask me, when you look back on 35 years at Bajaj, how do you see it? And I say to them that Bajaj has been through two and a half transitions. The first big transition was from a scooter company to a motorcycle company, and today, motorcycles are the majority of what we do. They are at the center of our strategy, and then everything else is connected around that. So that's one big transition we made — and it wasn't just scooters to motorcycles; it was 1960s scooters to this century's motorcycles. So, a huge shift in technology, not just in the form factor.

The second big shift we made, as you just mentioned, is from being a domestic company — I mean, when I joined, 100 percent of what we made was sold here — to now being present in exactly 100 countries, you know, and to be in a position to understand each market because every market is different, people are different, competition is different, distribution is different. So this has been a second big transition that we've had to make.

And the reason I said two and a half is because now we are in the middle of the third transition — from ICE to EVs, you know — and that's why when, say, a few years back, there was all this noise around whether legacy makers, as we are often unkindly referred to, will make it, or whether it will be only the startups' prerogative — who I refer to as upstarts — and my point was: it's not about one thing or another; it's about a company demonstrating what Charles Darwin said, that it's not the strongest or the most intelligent of a species that survives, it's the one that is most adaptive to change. I think this company has demonstrated repeatedly that it can adapt to significant changes.

So the short answer is it doesn't matter whether people move from scooters to motorcycles, or back from 100cc bikes to bigger ones, or back from ICE to EV, or back — Bajaj will adapt.

Well, that's really a great strategy, and you've taken away my pet question. I actually started this series with K.V. Kamath, and I told him that my next guest is going to be Rajiv Bajaj, and he said, "Oh, you should ask him about his father."

Rahul Bajaj told me, with a twinkle in his eye, "I was very angry with Rajiv. I didn't want the transition from scooters." I mean, apparently you disagreed violently, and his happiness was, "My son bested me," you know. He said that with pride. So the lesson is that you're going to always remain nimble, adaptable. Is that the big strategy or your lesson of the 30 years?

Yes, I think so. You know, again, if I have to lean on Soichiro Honda, the founder of Honda Motor Company — Soichiro Honda said it is not the manufacturer, it is the customer that develops the market, you know. I see this very vividly in Africa — whether markets will remain small or grow big, whether they will want the cheapest stuff or they will want quality stuff, whether service will be important or not, you know. Who determines this? It is not a manufacturer's policy, it is what the consumer is willing to absorb. You know, as Rumi said, "You don't sow, the earth receives," you know, and in that sense it was not up to my father or me or anybody else. We can only respond to the reality of the marketplace.

And I would — of course I have great respect for Mr. Kamath, I'm quite in awe of him — but I would say this: that in 1993, three years after I joined the company, I think my father really gave me purpose and direction because I went to him — I'd been working for three years, everything was fine at Bajaj, there was no crisis — and I didn't know how to make myself useful, you know.

So I said to him in '93 — I went to his office — and I said, you know, "What do you want me to do here?" Of course, he wanted me to go to Harvard Business School, and I'm the only one in my family who never went to business school, but that's a different story. And he said to me, "I will say to you what my father said to me, which is: do what you think best, but be the best in what you do," you know.

And I thought, that's nice, but what does it mean, you know? And then I thought that what he probably means — to be the best — is to be a global player, you know, be the best in the world in whatever it is you choose to do. And to be the best in the world, and not just in one market, I realized the value of what is my favorite marketing mantra from Al Ries, which is: narrow your focus, you know.

So if you are doing sports in India, you can excel in half a dozen sports. But if you want to be a world champion, we all know that you have to really narrow your focus, you know. And that's where that sowed those seeds of the beginning of Bajaj becoming a motorcycle company. Because then we said to ourselves, if we want to be the best in the world in something, where is the biggest opportunity, where is the size of the prize the most significant? And it was motorcycles. And so we said with singular focus that we are going to chase this dream, you know.

And people often say to me, "Were you not anxious that you're putting everything behind one thing, and if it doesn't work, what happens?" And I say to them that, look, focus and fragmentation are two sides of the same coin. A lot of people, in trying to make a virtue out of their indecisiveness, say that we are de-risking ourselves by doing multiple things. But you end up spreading yourself thin, and you don't make an impact in any particular area. So I would actually say to Kamath sir that my father gave me purpose and direction with that one sentence he said to me that day, and that got me going on the path for the last 30 years.

Well, you are also diversified to some extent. Anyway, let me come back to the current market itself. The two-wheeler industry had a bad 2019 to 2022. I mean, just before Covid and through Covid, I guess there was a de-growth, contraction, but you more than made up. I think it was over 15% CAGR in the next three years. Some would say it is the slack that you all were filling, but there was growth — the economy also grew seven, eight, nine percent. How is it looking now?

Well, I would say, Latha, it's a mixed bag, in the sense that I think we witness something of a K-shaped recovery undoubtedly, and the texture of this has changed every few months. For example, when we started, we witnessed that at the entry level, there was stress, you know, the so-called 100cc customer. Whereas people buying the mid-segment or the premium segments, as was seen even with cars, were less affected relatively by Covid and the consequences of it. So that end of the market was okay.

Now, more recently, we are seeing some other phenomena of the urban versus rural. We have seen more stress in urban — whatever that means — as opposed to rural. We are also seeing very clearly, to our detriment a little bit, a north versus south situation, where today we are surprised, in the last 12 months, by the kind of growth UP has demonstrated. I'm talking in terms of two-wheelers, you know. I don't know — I mean, I hear stories about the wonderful roads, I hear stories about the great security situation and ladies riding in greater numbers — and so it's anecdotal. I have never been to UP, I think practically in my life, so I have no first-hand knowledge. But these are the kinds of signals that come from the marketplace.

Having said that, the overall result is this: that the industry is barely back to pre-Covid levels, you know. So, just from a quantitative point of view, we are not necessarily in the best place yet. We have recovered, but growth still has to come into the marketplace. But qualitatively, things are much better.

Okay, now you read about UP. One of our reporters did a microfinance survey and she said there were problems — I mean, stress at the bottom — but roads in UP were outstanding. So I can understand what you're saying.

And Maharashtra is the other end of the spectrum, especially Pune — the worst roads in the country.

You're telling a Bombayite.

You're much better off now.

Well, let's see. That's another issue. We have a lot of angst. But, you know, to come back to the products you're talking about, do you think premiumization will be a very big theme? You spoke about the K-shaped recovery and we can see it — hotels and jewellery doing much better than FMCGs. You think premiumization will be one big choice you will make? After all, you've entered 400?

Well, I'll give you a somewhat indirect, longer answer to this. I think what is the reason for the success of the Indian two-wheeler industry? It is not the success of Bajaj alone, you know. Look at TVS, both in domestic and global terms. Look at Royal Enfield, you know. So what lies beneath this?

To me, there are three fundamental factors. First, we have to be grateful to God because we are blessed to be born in the biggest two-wheeler market of the world, you know. So scale can be everything for most industries. So that is our first, you know, good fortune. The second is that both past governments and this present government have ensured a reasonably high level of regulation. And it's a double-edged sword. There's a downside to it that I can explain if you want me to.

When you say regulation, you mean?

I mean, for example, emission regulation. Today, Indian emission regulation is on par with the best in the world in Europe. So, effectively, what this has done is it has pushed all of us, starting from 1991 — you know, it's not a recent phenomenon — it has pushed us to develop technology to be the best in the world. As a result, what we sell here sells in Europe and everywhere else.

So, regulations are global standards.

Similarly, in terms of safety — you may be surprised to know that a 13 horsepower motorcycle in India needs the anti-lock braking system, ABS brakes, as we call it — even though it's not required in Europe, you know.

So, in that sense, Indian two-wheeler safety regulations are actually ahead of Europe, you know. So if the successive governments had not continuously evolved regulations, this industry would have got commoditized. And as one of my marketing gurus told me, the greatest risk for business is creeping commoditization. So this is our second big strength, you know. And that's why cheap Chinese stuff — if I may call it that — has not found its way to this market as easily as it would have otherwise, you know.

And the third and most important — again, I come back to the point of Honda — is the consumer, you know. The consumer in India, to answer your question more directly now, is one who is not interested in buying something that is just cheap, something that is purely functional, something that is just a clone of something else. So if there's a market leader in a segment, and I were to simply make a copy for 10% less, the consumer is not interested in that.

If you look at every single segment — in motorcycles, scooters, even three-wheelers, because we are a three-wheeler maker as well — you will see that invariably, the brand that offers best value is the brand that is the leader of the segment, you know. And therefore, again, the consumer is shaping the segment in this way. So I think these are the underlying strengths of this market.

But still, I mean, would you lean on premiumization?

So on the basis of this, I would say: I like to stay away from these cliched terms, you know. This is a term that has come up in COVID times. I like to stick with the age-old word: differentiation, you know. Premiumization is a result of a manufacturer's endeavor to differentiate himself, either by his technology, by his brand, by his product — because brand and product are not the same, we all learn that the hard way — by his distribution, by other consumer initiatives, Royal Enfield being best known for that in terms of consumer experience, for example. So these are all the levers of differentiation. Somebody can call it premiumization, but I like to keep it simple for my people and say we need to differentiate.

I guess the word "premiumization" also came because of that K-shape, you know — people with money, so premiums sold better than mass. Let me just, since you repeatedly refer to your competition, Royal Enfield — what's TVS getting right? I mean, they've taken market share, both in domestic and in exports. Hero has declined. And so have you all by a few percentage points. What are they getting right? And how will you jump back?

This you must ask my good friend Sudarshan. But I have always been an admirer of TVS, you know, for the last 30 years, 35 years. And, I mean, I know this may sound a little condescending. But I think just as we got strategy, technology, product, quality, productivity, distribution — all of this — right, I think they're doing the same.

And they're grabbing share.

Yeah, they're gaining share. Well, for us, the focus is this: A, the 125cc plus motorcycle market, where the numbers suggest that we are able to hold our own. We are number two in this market, in the domestic market, behind Honda. TVS is not in the top two. Then we are doing, I think, quite well in the, if I may call it the Royal Enfield segment — the premium segment — where again, we are close number two with Yamaha. Of course, Enfield is way ahead. TVS is really not on the radar there.

However, with the scooters, we don't participate. And TVS has done extraordinarily well over there. But with the electric scooters, it's again neck-to-neck between Chetak and the iQube. So that's great competition. I honestly don't care who's first, as long as it's between Bajaj and TVS. So I think we've kind of ganged up against the Olas and Athers.

You keep admiring Honda, but it is still — I mean, the old Hero Honda — but now Hero, still one of the bigger competitors here.

Well, for me, the competition is really in India, TVS and Enfield; outside of India, Honda and Yamaha. You know, these are the people that we have to watch out for. Of course, we respect everyone. But that's my core competitive set.

Okay. How do you manage this 20% margins? I mean, you sell quality bikes at a very, very affordable price, as you said — you know, from 35,000 rupees or 50,000 rupees in India and $500 abroad. But still, you have your fist on that 20%. Do you look at margins first and then volume?

No, margins are always a consequence. Even within the company, if you talk to people, there will be some who will think that we are driven first and foremost by a 20% EBITDA. This is not true. The answer to this puzzle is quite simple. It's in two parts. The first part is this, most companies do not achieve this margin because of the things they do, which they should not be doing.

You know, so in every company, there is a 20% EBITDA product — in every single company. But then the management decides to cross the boundaries of the brand. You know, and I'll be very candid in saying this: for example, if Maruti were only a small car maker, its EBITDA would be higher than if they tried to put money into developing and selling bigger cars. Because consumers don't necessarily want a bigger car with the "M" on the bonnet.

You know, Hero is very successful with small motorcycles, not necessarily with big motorcycles.
Bajaj is relatively successful with big motorcycles, not necessarily with small motorcycles. So I think every brand has its place. And that's why I say to people that when we talk about go-to-market strategy, I always say my go-to-market strategy starts with go-to-brand. If you want to participate in a different segment, you have to go with a different brand. Brands do not travel intersegment as much as management would like to believe they do. So that's the first part.

If Bajaj had been participating, let's say, in ICE scooters or mopeds, or other such segments we had ventured into, we would not have a 20% EBITDA — because, you know, that would be taking 5%. It would not be accretive; it would be taking 5% from our bottom line. So this is, I think, a big part of the reason why we don't have that.

The second one is: Bajaj is actually a 21% or 22% EBITDA company, actually. You know what I mean is this — you know, Mark Twain said, "Don't let your schooling interfere with your education." And we say to ourselves similarly: "Don't let your entrepreneurship interfere with your — don't let your business interfere with your entrepreneurship." What we mean is that the reason we are at 20 and not 21 or 22 is because there is always a 1% or 2% experimentation that goes on in Bajaj, you know. Sometimes that is invested in creating a new market in Africa. Sometimes that is invested in creating electric vehicles. Sometimes that is created in bringing KTM and Triumph to this country.

So there is always a startup within the legacy company, you know, and at different points of time that experimentation is happening in different areas. So it may appear to you that you have invested so much in EVs — it's no secret that so far EVs aren't really profitable. But how do you manage to? Because that buffer was there, always being applied somewhere else. And now it's been brought into play over here.

So give me a headline. I mean, how do you see this? What is the growth number you are prepared for, for the next five years? Will it be like GDP — 6%, 7%? What is your working number?

No, that's very hard to say. Because as a global company, it is the sum of what happens across markets. If we were to rely on the past as an indicator, then it would be in the region of what you're suggesting. But if there is any discontinuity — you know, for example, let me just give you an example of the three-wheelers. So Bajaj is a world leader in three-wheelers. Again, we export almost half of what we make, etc., in normal times. Now, an entry-wheeler is a space where electric is extremely relevant. And that's why the rate of adoption has been so high.

Now, we are already witnessing enormous traction for our electric three-wheeler, which we introduced only last May. And, in fact, we are several years after the market leader. But you'll be happy to know that yesterday, my colleagues let me know that we are now the market leader in the electric three-wheeler space in this market.

Now, if this triggers governments — state governments — to say, you know, the adoption rate is very high, let's encourage it and let's get rid of the old — and not just stop selling the ICE, but get rid of the 10-year-old, 15-year-old — and replace it with electric, then the demand profile will completely change. Also, it's not a secret that in a couple of months, by the next quarter, we are hoping to enter the E-Rick segment, which is almost as big as the E-Auto, as we call it. And today, we are not present in this segment. So that gives us another great opportunity.

So sometimes there are these discontinuous moments. You wanted a headline — I can give you a cryptic headline. And I said this to Parikshit some months back — that we are working on a very interesting partnership opportunity, a global opportunity with a very interesting company and brand. Now, if that were to materialize, then that will again give Bajaj a new growth avenue.

So it will always be adjacent to our core space, so we will never go away from this business model that we alluded to earlier. But it will be a significant extension of that, that reaches out into a relatively wide space, let's say. So one is the rate at which the overall market will grow. But if Bajaj does some smart stuff, we can outgrow the market growth — and that would be our hope.

Well, let's come back to the situation we are in now, Rajiv — the tariff war. We are going to have, perhaps, narrower markets, pay for access to US markets, but does it affect your industry at all, affect y'all at all?

Well, every day is a new day, with what is happening of late. You know, four days ago — or a little more than that — we received news that we must immediately stop shipments to the US, for example. You know, we export KTM and Triumph motorcycles to the US. It's not a big market for us, but it's a very profitable market for us. So we are suddenly hit by that.

A few days later, we were told that we can now supply to the US, there's no problem. Two, three days ago, we are suddenly faced by the prospect of an increase in steel prices. And as of yesterday — I still have to verify this — but I was given to believe that suddenly China has decided not to permit the export of heavy rare earth magnets, which are used in motors of electric vehicles. You know, and as you know, for some of these EV components, the whole supply chain of the world resides in China.
So if this is true — we are still trying to come to terms with all the facts — but if this is true, it would mean that, and if it doesn't change, then in a matter of weeks, the entire Indian EV industry will grind to a halt.

So I guess what I'm trying to say is — whether it's at the front end or at the back end — every day there is a surprise to be dealt with. So it's not just about the tariff, but all the collateral stuff that goes with it.

No, this can be serious, because China will use what they can to arm-twist the best terms from global trade. But there was also an expectation that things will get cheaper, because you can't sell to the big $4 trillion US market, then there should be disinflation in Asia. So margins could even improve.

Yeah, I mean, I guess that's very industry-specific. In our case, most of our exports are — if I may say — to the southern hemisphere, so to speak. And to that extent, if we could not export any more to US or Europe — anyway, these markets were already down — so that's not going to be a big influence. I don't think so.

But if lithium or rare earths — that can be a very big thing.

Oh, it will just bring the factory to a halt.

What's your percentage of EV contribution to the entire?

So today, let's say, electric vehicles on a monthly basis are about 10% of our global — what we make and sell. But, for example, in a particular segment — like in scooters — everything we make is EV.

And in three-wheelers today in the domestic market, let's say, out of 35-40,000 a month, now almost 6-7,000 a month, which is not a small number, it's almost 20%. So in specific segments that affect not just us, but our dealerships and our dealer partners, this can be havoc, all Chetak dealerships would have to shut down.

No, it can be serious. And even in the larger EV space, it's not, it's a scary prospect. But why did you develop that CNG that came out of nowhere? What triggered that? And what are the plans?

We spoke about differentiation. And the way again, we look at it is that there's two ways for this to happen. If it's an idea you have that you want to take to market, you can probably call this as disruption, you're trying to disrupt the market. Whereas if it's an insight you glean from the consumer, then probably this is differentiation, just as a matter of semantics. So I think CNG was more than differentiation to the disruption idea. I will share this with you that the company I referred to earlier, that we hope to partner, they made a wonderful presentation where their CEO said that if you're not creating the next paradigm, you can be sure someone else is, and therefore it is in that sense of anticipation that we said to ourselves that CNG is very popular with cars, with three wheelers, it has completely overwhelmed the market, it is now 70% of the industry and certainly 70% of our sales, and for very good reasons, clean, cost effective, reliable, safe, no range anxiety, etc.

So we said, why not a CNG two wheeler? And why not be the first company in the world to do this? So from our internal point of view, it was something it was exciting for our engineers. And from a market point of view, we thought, here is something disruptive.

Okay, you think it can be a very big part of your range?

That time will tell. We have started in a limited way. Because CNG availability is not as widespread as it needs to be. So markets like pockets in Maharashtra, or across Gujarat, UP, etc., where CNG is more freely available. This is where we started. And the adoption rate will take its own time because consumers are not entirely comfortable with the idea of a CNG tank under their backside when they're riding a vehicle. So it's a matter of perception. But then, as we say, in marketing terms, perception is greater than reality. So it will take some time for word of mouth to develop. But we are happy to have done something new.

Oh, perception is far greater than reality in our social media times. Let's never forget that. But to come back to the other things that you are trying, KTM has its own problems, we keep getting negative headlines from Europe. Will that get stalled or you will swim through?

Well, it's difficult to say. We have been given a certain period of time by the authorities in which this matter must be resolved one way or the other. Otherwise, the company will simply go bankrupt. That deadline is 23rd of May. So frankly, the last five or six months of our time as a senior management, including my colleagues who are in charge of business development and our CFO, etc, they've been just preoccupied with this. We hope we will have a good solution. Because KTM is a fantastic brand. We've been associated with it for 17 years. Over that period of time, it has become the world's number one premium motorcycle brand, overtaking Harley. It's very strong in its space of off-road, especially off-road racing, just a world champion forever.

And for us, as Bajaj, it's a very large part of our business in revenue terms, it's very profitable for us. So this is not something we would like to let go of easily. But from the current position, which is extremely difficult, we need to find a very sustainable solution for the future. It's not just a question of cut paste in the short term. We have to have something very sustainable in the future. We are working on it. I think we are close. But you know, in these things, there's so many slips between the cup and the lip. So it will be only closer to 23rd of May, that hopefully everything will be resolved. And then we'll be very relieved and happy to have a great solution for the future.

It doesn't have any implications for Bajaj out of balance sheet, does it?

Well, not directly in a standalone sense. But to the extent that we are almost a 40% shareholder and that may go up now. So at a consolidated level, yes. But at a more, let's say, practical standalone level, no.

Okay, but you may have to loan, Bajaj Auto may have to loan more to the subsidiary.

Well, we've already had to inject some capital into the company to get it restarted. And just to meet its monthly operating expense kind of thing. And yes, we'll have to recapitalize the company if we are successful in taking it beyond 23rd of May. And so whether we do it ourselves, we do it with a strategic investor, i.e. an industrial partner, or we do it with a financial partner or debt funds, etc. These are all the options that are obviously on the table. So we have to find the most optimal way forward.

But you are likely to have more investors.

I think it's inevitable.

PE or some other fund investor.

Yes.

Okay, that can be another thing to watch out for. Now, let me just zoom out into your approach as an entrepreneur. You're always in a t-shirt. Like you said, just some time back that you resisted going to business school. What makes you tick? What are your mantras that are different from other entrepreneurs or CEOs?

You know, I think it has a lot to do with our upbringing. So I have a younger brother, as you know, Sanjeev, and a sister that we unfortunately lost last year. So there's three of us. And our parents were both Mumbaikers, you know, Bombay people. But then my father decided that when Bajaj Auto was set up, not in Pune, but actually in the little village of Akurdi outside of Pune. He felt that the right thing was to be on site. You know, he would always say, I don't believe in absentee landlordism. So my parents moved there. And as was the case in those times, everybody that worked at Bajaj lived in the colony. So we grew up with 200-300 kids over there.

And I have actually seen this myself firsthand. When I joined the company, my father's secretary showed me a file of letters that my father wrote to the principal of Cathedral School in Mumbai, where he studied every year saying, I request you to give admission to my children A, B and C in standards X, Y and Z, you know, and permission would come. And we never went. And then next year, he would write the same thing again. And this went on till we graduated from 10th grade.

So it was your choice or your dad's choice to put you all in the same school as the Bajaj Auto staff?

So it was my mom's choice. And so when I saw this, I asked her that, you know, dad was getting us permission. Papa was getting us permission like this every year. But we carried on here and we used to walk to school. In those days, Bombay-Pune Road was a little strip of tar. And we would walk to school or go in the same school bus as these 200-300 kids. And so we played on the same uneven soccer field every day. We swam in the same public colony pool with everyone. We climbed the same Bogan Villa trees. We stole the same mangoes from people's trees. And we crushed the same tube light and made manja out of it to fly the kite. So that was life growing up, you know, for the first 15-18 years. And I think what value that instilled in us was this that it's all about meritocracy and not about aristocracy. That is the value our parents instilled in us, that in all aspects of life.

And I think it also told us what I think kids miss out on a little bit today. You know, Coco Chanel said this best when she said, the best things in life are free. The second best are very expensive. And I think we grew up in an environment where the best things were free. And I think that we have carried through. So you may be surprised to know that I do not own a suit. I simply don't own one. So if I'm invited to forums or events that require a jacket or a tie, I can't go because this is all I have.

Okay, that's good. Actually,  even I checked out. Rajiv would have come in a t-shirt. I'm not going very, very formally dressed in a jacket or anything like that. But these are great values. Actually, apparently, if you looked at the top 100 billionaires, 80% are first-time billionaires. So, I mean, somewhere nature allows this churn. And therefore, it's good to stay grounded. What do you attribute to the fact that the Bajaj lineage has been able to remain at the top? Very often families peak off. Is it that these values keep y'all ticking?

You know, I can just tell you in a very practical sense. I have nothing very profound to say in that regard. My father was, let's say, a very larger-than-life personality. He was also literally much older than his brothers. So my three uncles, one of whom, unfortunately, we lost recently. So they were the oldest of them was 10 years younger than him. And then the rest are even younger. So three years ago, my father passed away. And so now our family council is basically my three uncles, Sanjeev, myself, and one of my cousins, the son of my youngest uncle.

Now, just look at this situation. I mean, I'm going to say this very candidly. You know, my father was the high-profile guy. He had all the success, let's say all the limelight, etc, etc. And my uncles have always lived in the shadow to that extent. And this is bound to happen in every generation. There is somebody who stands out like that. You know, but even after my father had passed, they were always with him. He passed away at 82. And there was never a moment when there was any kind of ill feeling on account of the fact that Rahul Bajaj was the Bajaj group. So I give a lot of credit to my uncles, and therefore, obviously, by extension, to my aunts, because otherwise, that is what becomes the problem.

And even after my father has passed, I mean, the kind of love and freedom that my uncles have given Sanjeev and myself, you know, to do whatever we are doing. I think it is that collective spirit, which we like to tell ourselves the spirit of trusteeship that comes from Gandhiji, my great grandfather was adopted as his fifth son. So the spirit of trusteeship that nothing is yours, you know, you're a custodian for some time, and you take care of it before you pass it on. I'm very fond of yoga. And I was very blessed that Guruji B.K.S. Iyengar, who lived in Pune, just 30 minutes from my house, he was one of my yoga teachers. And he said something beautiful, you know, he said, nothing belongs to us, even the air we inhale must be exhaled. So once you, I think once you understand that, then there is no problem.

Well, I also have the privilege and the pleasure to be B.K.S. Iyengar's student. So yeah, you get amazing lessons. And not just in yoga, but in life, from him. Well, I have to put in two more business questions because you brought, I mean, you spoke about Sanjeev, you have started a finance company. Is that only in-house for you? what is the...

Well, it's like this, Bajaj Finance was started by my father in the late 80s. Its sole purpose was to finance Bajaj two-wheelers and three wheelers. And for a long time, maybe 15-20 years, the only business of Bajaj Finance was to finance Bajaj Auto's products in this market. And then when Sanjeev took over and he led the transformation of the company and you have seen the results of that, they went much beyond that brief. And progressively, Bajaj Autos business was under 10% of Bajaj Finance's business.

However, from Bajaj Autos point of view, almost half of its motorcycles sold in this market. And I think perhaps a third of its three wheelers are financed by Bajaj Finance. Now, when this asymmetry happens, you know, between two companies and therefore two managements, the kind of focus again, we come back to narrowing your focus, less is more and stuff like that. The focus of the Bajaj Finance management upon our business was not proportionate to our own focus on that same matter.

On the focus you wanted.

Yes. And this is a very big competitive lever. It's one of the very big competitive levers in the marketplace. And correctly so, a financier's priority will always be risk. And whereas an OEM will err a little bit more on the side of expanding his business. Left to a financier, they only want to lend money to people that don't need the money in the first place. So this is a problem with all the banks and the NBFCs. So then we said to ourselves that, and I'll let you in on this family secret, I said this to my father in 2010 for the first time, that, you know, this is going to be a conflict in the future, from a business point of view, let's separate this.

He just shut me up. He said, I don't want to start another company. I don't want another board. I don't want another six board meetings. And, you know, to be very candid, there will also be this thing of, “What people will say.” You know, is there a split happening there and stuff like that. He said, I don't want to do it right now. So frankly, till he was around, this was not done. But internally in this family council I referred to, we were all kind of agreed on this. So then once my father had passed away in February 22, then we set this in motion, it took us 18 months to get RBI approval for this. And then we started off so that we can have an NBFC. And that is the guardrail provided by RBI also. Your only business activity will be to finance Bajaj Auto products. So that's the only purpose, very sharp focus, but a very important competitive lever for Bajaj Auto.

Okay. Got that straight. And you also have a Bajaj Auto technology. Any specific reason you want an R&D thrust?

Well, let me be honest and say, I don't think that was so well thought out as Bajaj Auto Credit Limited. But there was a point in time when something new like electric vehicles, and not just EVs, other future technologies, you know, hydrogen, other things are coming into play. Then it was important for a period of time at least to build competence with reasonable scale in that area. So we said to ourselves that to lend focus again to that, let's have that separately. But perhaps in the future that, and these are both 100% subsidies of Bajaj Auto.

So at an appropriate time, it can always be rolled back in. I like what Sage Vasishta said, you know, he said, nothing is more powerful than doing the right thing at the present moment. So at each time you do what is right for that moment. And that may not be the same as time passes, because things change, and then you respond.

And as you said you all have been adaptable. And that has been your strength. Just finally, I mean, you're nowhere close to retirement, you've just taken over for the next five years. But is there something you feel I must do before I take off my gloves?

You mean in terms of work?

Work.

Well, as I said, my goal has always been singular, to be part of creating a versatile company. Certainly in the short term, the goal would be to finish this third transition successfully. Perhaps, I shouldn't say this, but you know, so my son is 26, Rishabh is 26. He's been in the business almost four years. So, of course, right now, he's too young. But hopefully, there is some potential for continuity there. Eventually, time will tell again, what I want to do and what I enjoy doing now more and more. And let me tell you, I actually started work from home in 2018, July 2018, two years before COVID.

Because having been part of a company for 35 years, and most of my team has worked with me for a very long time. You know, so we kind of know each other well, we can almost read each other's minds. I don't need to unnecessarily go to work and impose myself on the system, unless there is a specific reason to.

So quite frankly, I'm home half the time, I enjoy my dogs, I enjoy my garden. I enjoy my yoga, I enjoy my pool, I enjoy my friends, I enjoy a little bit of travel, I enjoy homeopathy. It is, I think my greatest joy in a certain sense, I wish I could cook, I wish I could, I can't sing, but I wish I could dance a little bit, which I can't. So these are the things I would like to do, you know, and yeah, I'm 58. So you would not be-- I would not take offense if you suggested that I'm close to retirement.

No, no, you're not close to retirement. I do wish you a great innings. And this continued sense of humor and twinkle in your eye every time you reply.

You bring out the best in me.

Thank you very much, Rajiv, for your time. I really enjoyed every moment of this.

Lovely, Latha. Thank you so much.