Bajaj Auto gears up to meet fresh 3 wheeler demand

Bajaj Auto, India’s largest three-wheeler manufacturer is gearing up to meet fresh demand in Maharashtra, after the State Government recentl y announced its plans to issue 81,450 replacement auto-rickshaw permits, against lapsed permits, across 49 RTO’s. The permits which will be issued between March and October 2014 have come after an interval of 17 years.

C K Rao, Vice President, Commercial Vehicles – Bajaj Auto Ltd said “We are happy with this move by the Maharashtra Government that will enhance intra city connectivity and create enormous self employment opportunities.

“Bajaj Auto is fully equipped to cater to the fresh demand for auto rickshaws through its existing range of three-wheeler products.”

Bajaj Auto

Mr. Rao further added, “We manufacture and sell close 45-50,000 Autorickshaws every month and are fully capable of meeting any surge in demand that may arise due to this development”.

“We will leverage on this opportunity by offering our products through competitive financing schemes that offer lesser down payments and lower EMIs.”

With such an opportunity after two decades Bajaj Auto will make sure that the vehicles requirements are met. Bajaj Auto has recently introduced a whole new range of vastly improved three wheelers – RE compact, RE Optima, and RE Maxima – which have improved mileage, better reliability and durability leading to lower maintenance costs, and vastly improved emission values.

Bajaj Auto RE Compact

Prices of Bajaj Auto RE Compact Petrol and CNG variants are RE Compact 2S CNG Rs. 1,34,00/-; RE Compact 4S CNG Rs. 1,42,000/- ex-showroom. Registration, Road tax, Insurance, and Fare meter are extra.

The company has entered into arrangements with several Public sector banks to make available vehicles under lower down-payment and easy instalment schemes. The down payment can be as low as Rs. 15,000/- with tenors ranging from 3 to 5 years.

Bajaj Auto Axes ULC Small Car Project for Renault-Nissan

Bajaj Auto has reportedly axed their small car project that it was developing for Renault-Nissan, as it was not a commercially viable option. The company’s MD Rajiv Bajaj, was quoted as saying that they are not planning to enter into the low cost passenger car business.

They will instead launch a commercial vehicle with low cost by January. Bajaj Auto had signed a MOU along with Renault-Nissan, last year for developing an ULC car project in India as well as other emerging markets, which was planned to hit markets by next year.

The ULC car was supposed to compete with Tata’s Nano, touted as the cheapest car in the world. The sourcing, manufacturing and designing for this car was to be carried out by Bajaj Auto, while Renault-Nissan would be handling the marketing of the car in overseas and Indian markets, following their agreement.

A spokesperson for Nissan, Simon Sproule, said that the partners would face some milestones when it came to deciding about the project in upcoming weeks, however the company did not have any further details to offer on this situation.

Meanwhile, there were no comments from either Renault or Bajaj Auto.

Bajaj says Car Platform Possible Even without Renault Support

Bajaj Auto’s MD Rajiv Bajaj recently said that the platform they have been building for the Renault-Nissan manufacturer in India, will be put to multiple uses and be profitable by itself. The OEM deal for producing a small car, which Renault-Nissan is to sell under its brand name is just an added bonus for them.

He said that they are developing a platform, which will meet the needs of their company. This platform can be utilized for producing a three wheeler model, commercial vehicle or van. They are building this platform to meet their own needs. This same platform will be used for making the proposed car. The deal with Renault-Nissan is just an added bonus for them. They have to showcase the prototype to Renault-Nissan, for which they are right on track.

There are apprehensions in the market, that Bajaj Auto have invested an undisclosed but huge amount to create this platform, and may make a huge loss if this project does not take off or is delayed. They are creating a car for Renault-Nissan which will have a mileage of 30kmpl and will be commercially available by next year.

Bajaj Auto is developing a three wheeler model as well, which it hopes will replace the 5mn three wheelers currently plying Indian roads. Their new three wheeler model will be more comfortable, less polluting, bigger and more secure. The engine of this three wheeler model could have a slightly better fuel economy as well.

This three wheeler is likely to be priced about 15 to 20% more than the models currently available in the market, which are priced around Rs.1,10,000. Bajaj Auto is also looking to enter the growing passenger van market in India, and may compete with the new Tata Ace. They are also considering producing a small commercial model.

Bajaj also dismissed Honda Motorcycle and Scooter India’s plan of increasing production capacity to 4mn models per annum. HMSI had decreased their motorcycle production earlier, especially in the market of 100cc bikes, as they did not want to directly compete with their then ally Hero Honda.

Bajaj said that he does not buy into this argument. There has been nothing to stop them from competing with Bajaj, as they are the lead, when it comes to the 150cc bike segment. He added referring to HMSI that they might have more products, but Bajaj still dominates this category. Bajaj sells around 95,000 models in the 125-250cc category per month, in comparison to HMSI’s 47,000 models per month.

Bajaj Auto Plans to Introduce a Car Built on their Ultra-Low Cost Vehicle Platform by Mid-2012

Unlike its foreign competitors, Bajaj Auto recently announced that they plan to introduce a commercial four wheeler in the market by mid-2012. The car will be built on the company’s ultra-low cost vehicle platform.

The chairman of Bajaj Auto, Rahul Bajaj, said that they will introduce their ULC platform, four wheeler by mid-2012. This vehicle will serve the purposes of a goods carrier as well as a commercial vehicle. In the relatively small goods carrier segment, domestic auto companies like Mahindra & Mahindra and Tata Motors have been performing quite well, and their company wants to target this very segment.

He added that their company is primarily a three wheeler and two wheeler manufacturer, however they plan on increasing their product portfolio to include four wheelers too. With the aid of their frugal engineering and expertise, coupled with the technology expertise of Renault-Nissan, they will soon introduce their four wheeler model.

The company also said that their foreign partner will help in marketing their car, however not as a low cost model. The car will then be sold at mutually settled price. Bajaj further said that the platform will be the same for all their four wheeler model. While for their partner Renault-Nissan, the model will be a car, for them the model is a commercial vehicle, however he refused to divulge whether both the products will debut together or not.

Bajaj also didn’t say whether a single model or two different ones would be launched. Renault differing strongly said that their company has not yet seen the end result and would not settle for a vehicle which had any shortcomings whatsoever.

A spokesperson for Renault said that they want to clarify that their company would be satisfied only if the product fulfilled all the necessities of a car. Anything short of this would not pass their stringent requirements. Renault will take a final decision only after it has done a complete evaluation of the end product shown by Bajaj. Till then, they can only speculate, a thing which they do not prefer to do.

The partners came together in 2009 for producing a small car which would be priced around $2,500. This ULC platform car was scheduled to release in India by 2011, however differences between the companies on grounds of design and pricing delayed its release. Though Renault-Nissan wanted the car to be priced $2,500, the Bajaj Auto Co. wanted it be priced lower. In the year 2010, Renault-Nissan had announced about signing the Memorandum of Agreement with the Indian auto manufacturer for producing the ULC car model.

Noted industrialist Rahul Bajaj calls for lesser government regulations, warns stifling of growth

India’s celebrated industrialist, the owner of one of India’s largest automobile manufacturer, Mr. Rahul Bajaj has asked the central government, not to shackle the industry and have some faith in it. He was reportedly upset by the government’s excessive and unnecessary regulations.

In the recent turmoil over governance deficit and multitudes of scam, implicating senior leaders, raised by many well-known industrialists, chairman of Bajaj Auto was of the view that generalizing of the entire population should not be done. He was of the belief that the federal government should have a more trust-based relationship with the corporate world, since by virtue many of these businesses are done in good-faith. He further warned that due to some rotten apples the government is trying to paint every corporate house with the same brush by shackling them with unnecessary regulations.

Talking with representatives of the CII (Confederation of Indian Industries), Mr. Bajaj said that exceeding the desired level of regulation has the potential to act as a brake for the growth in the sector. The Indian automobile sector has still not grown enough  to take advantages of the economy of scale and has still got many things to catch up vis-à-vis global automakers that any excessive regulation will prohibit the industry to reach the zenith of its potential.

He further said that Indian companies are not against regulations per se, but stressed that innovation and entrepreneurship should not be regularized and there should be an atmosphere of trust. Giving a real-time example of Bajaj motors itself, he detailed the gathering about the independent director’s role that they would certainly not permit the management board to do anything untoward and put at the stake the company’s reputation.

On the other hand independent directors also will put at stake their reputation by letting Mr. Bajaj have a free reign over the company’s affairs. He further said that in the first place they will not jeopardize their reputation by letting him do as he wishes, but if he persists then for sure they will leave the company, and everybody will ask tough questions when no less than 3 directors leave the company at the same time.