Hard pressed to spell out a blueprint for Bajaj Auto’s growth in the longer term, managing director Rajiv Bajaj indicated to shareholders that the company wanted to venture into electric vehicles that were both green and chic for use as personal transportation in urban areas.
Bajaj Auto was well placed on both weight and size and volumes to undertake such an initiative for the future and make the vehicles affordable, he felt.
In the nearer term, the company disclosed plans to invest Rs 2500 crore as capital expenditure over the next three years and launch a slew of new models, including the Pulsar 400 next month and the KTM Husky in January.
Speaking at the (de-merged) company’s 9th AGM here, Bajaj elaborated on the green vehicles plan. “It is an initiative called urban mobility. What I mean is vehicles that are very clean ie green and can it be almost irresistible to look at. Can someone create for emerging markets, at affordable price points, the kind of smart, clean, efficient vehicles that Tesla, for example, has created for the developed world?” he argued.
Every company, he believed was trying to do this for the last 20 years. “But it is not so simple as two criteria are important. The vehicles must be very light - it is not easy to electrify a big car or truck or a bus as it demands too much from the battery. Second we need big volumes if you have to bring the cost to a level that people can afford, especially in our country,” he said, asserting that with these two things in its favour, Bajaj Auto was better placed with its range of motorcycles, three wheelers and quadricycles.
“This initiative will take time, (don’t ask me next year what happened),” he cautioned, and added, “but I think we are creating a very promising culture.”
Asserting that the company had done well in the prevailing market conditions, Bajaj however acknowledged that it could have done much better. “I would have thought by this fiscal we should have been ahead of a revenue of Rs 30,000 crore and our bottom line should have been around Rs 4500 crore (instead of Rs 3600 crore) and our market cap certainly should have been in six digits.”
Pointing out that 2012-2015 had been flat on growth, he attributing the mis-step on the Discover brand for drop in the domestic business. “While exports compensated, the balance had now shifted in favour of the Indian market. So since Jan 2015, we changed direction and we can see results. In the next 12 months will be a challenging but exciting time for us. We have identified four growth engines to rev up and the full thrust will be seen in the next year,” he said.
One of these was to build further on the Pulsar brand which he felt had changed motorcycling in India for ever with the launch in 2001. “Next month we will launch the all new Pulsar 400 and I feel that the same revolution will happen all over again, and disrupt the market,” he said, adding that 100,000 motorcycles a year would be a conservative sales estimate.
On the super premium front, Bajaj Auto is expanding the KTM brand in all ASEAN markets. It is also planning to launch a bitzkreig on new products beginning with the new KTM brand Husky in India in January.