Low-cost car platform to drive Bajaj’s dreams

Low-cost car platform to drive Bajaj’s dreams

The country's second largest two-wheeler maker Bajaj Auto has set its eyes on beefing up its car division. Bajaj Auto vice-chairman and managing director Rajiv Bajaj told FE that the company would use the ultra low-cost car platform to roll out more passenger vehicles. Though he did not want to share any details, experts said the move would make Bajaj an end-to-end automotive player at par with the Hondas and the Suzuki's.

"It's true (that Bajaj would launch more passenger vehicles) but too early to elaborate upon as this is competitively sensitive information," Bajaj said. He did not elaborate beyond this point. An industry insider said Bajaj Auto has been eying the 1.5 million plus car segment for the last few years, however has been very cautious in its approach.

"Bajaj is among the most powerful brands in the country today. The ultra-low cost (ULC) car project has given the company a sneak peek into how to develop a car," a source said. He said that owing to the intense competition in the small car segment, Bajaj may look to carve out a niche of its own. "They may look at a completely new branding strategy for their car division," he added.

"In order to be a global automotive player, a company has to be present across product segments," leader of the automotive practice at PricewaterhouseCoopers Abdul Majeed said. He said that as customers evolve to higher priced vehicles, even companies would have to keep pace.

Brand expert Harish Bijoor said that once Bajaj Auto enters the small car segment with its proposed ULC project, it would have to adopt a new brand. "The brand imageries of a two-wheeler and four-wheeler are totally different. Bajaj would have to weave out a totally new brand for its passenger cars," he said.

Majeed said since Bajaj has a strong distribution network in two-wheelers, it would be useful for the company to penetrate into the car market. "The move would also help the company to de-risk. History has shown that no automobile company can merely rely on one segment. It has to expand," Majeed said. Senior Vice-president at TNS Automotive Pradeep Saxena said that the company could use the ULC platform to roll out three-wheelers as well. "Since Bajaj has such a strong three-wheeler division, they could use the platform to strengthen this segment tremendously," he said.

Source: Financial Express