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Last Updated : Jan 29, 2019 02:51 PM IST | Source: Moneycontrol.com

Bajaj Auto wants to go the Apple way, hints at no new company-owned factories

Rajiv Bajaj, the chief of Bajaj Auto, believes his company’s job is to design products and not run factories

Swaraj Baggonkar @swarajsb

Impressed that the world's most famous mobile manufacturer doesn't own a single manufacturing plant, Rajiv Bajaj, the chief of Bajaj Auto, believes his company’s job is to design products and not run factories.

The 52-year old Managing Director of Bajaj Auto said, “If Apple cannot have a single (manufacturing) plant and sources everything from Foxconn and can be such an outstanding company that we look up to it, why should Bajaj have any plant tomorrow? A manufacturing plant is a pain -- buying land, talk to the concerned authorities, get the labour in, manage them everyday, give them uniforms and arrange for their transport. This is nonsense. Our job is to design and create products and market them.”

Bajaj was interacting with mediapersons at an event held in New Delhi on the sidelines of launching a new promotional campaign: ‘The world’s favourite Indian’. The Pune-based company sells its products in more than 70 countries, exporting it from its mother plants based in Maharashtra and Uttarakhand.

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“There are people who have created big businesses without any real estate involvement. At Bajaj, now when we think new brands, new markets and new products we do not think of new plants, new CKD (completely knocked down) facilities or where the new plants should come up,” Bajaj added.

Bajaj’s youngest plant at Chakan near Pune has repeatedly seen its production disrupted following labour unrest. The reasons range from demands for wage revision, recognition of new unions, reinstatement of suspended workers to name a few.

Such unrests have hit production volumes in the past, impacting domestic and exports sales. The company is currently the third largest manufacturer of two-wheelers (2Ws) and the largest manufacturer of three-wheelers (3Ws) in the country. It is also the biggest exporter of two- and three-wheelers, making up 40 percent of its total production.

The Chakan plant manufactures products not just for the Bajaj brand (Pulsar, Avenger, Dominar) but also for KTM. It will soon create products for Husqvarna and Triumph brands as well. At Aurangabad, it produces passenger and commercial 3Ws as well as the quadricycle Qute. At Pantnagar in Uttarakhand, it builds 2Ws Platina and CT 100.

Despite running its plants at high operating levels, Bajaj Auto has been reluctant to add new manufacturing plants unlike its peers such as Hero MotoCorp, Honda and Royal Enfield who have rapidly added new plants in the last few years.

Bajaj Auto has been tasked to design and develop new products as part of the agreement it has with KTM and Triumph. The management is focusing on making India as the biggest source destination for mid-capacity bikes.

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First Published on Jan 29, 2019 10:48 am
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