Next Change

Bajaj addressed employees at Chakan, telling them for the first time what business circles have been speculating for long—that subject to the Board’s approval he will step down as MD on March 31, 2005, and that he will pass on the baton to eldest son Rajiv; and that Sanjiv will be elevated to the Board this October.

Chakan is symbolic of the ‘‘new way of doing things at Bajaj’’—not least because Rajiv had to fight hard for it. He argued with his father for three months to allow him to set up the plant in the first place ‘‘when 500 acres were lying unused at Ahmednagar’’. Chakan is barely half an hour from Akurdi, the Bajaj Auto HQ which has a manufacturing plant too.

Rajiv infused Chakan with fresh ideas, like putting in place an R&D team who designed the Pulsar and now the K60, hiring workers on contract, increasing productivity by imbibing Japan’s famed TPM (Total Productive Maintenance) culture.

Result: Chakan aims to produce 25,000 K-60s per month within six months. In the range of 125-135 cc, the K-60 is going to be priced at the upper end of the executive segment, which is lorded over by Hero Honda.

Chakan’s worked and his father is the first to admit it. ‘‘All credit goes to Rajiv for sticking with it and it turns out he was correct.’’ For the younger Bajaj, the Pulsar is more than a flagship motorcycle. ‘‘Its success is not lost upon our other engineering divisions, manufacturing plants and vendors. Success breeds success, and this new way of doing things is already pervading the entire organisation.’’

The MD-in-waiting says for Bajaj to grow profitably, it has to be ahead of the market with ‘‘smart ideas’’; and with the arena becoming extremely competitive, it’s imperative ‘‘for Bajaj to be a place where individuals aspire to build the best motorcycles in the world’’. As for Sanjiv, in charge of finance, he wants the company to regain the top slot in the two-wheeler segment they lost to Hero Honda. Things were particularly difficult in 2000 when scooter sales fell dramatically—and Bajaj Auto had to do or die.

But today, the strategy is in place—expand Bajaj Auto’s footprint outside, and adopt lean manufacturing practices, including cutting costs and labour.

The worldwide market for two-wheelers is 32 million, and Bajaj Auto’s share is a mere 1.3 million, ‘‘so there’s immense scope for growth.’’ One way is to set up bases in other developing countries to address the world market.

The first stop, says Sanjiv, also in charge of international operations, is Indonesia, where an assembly line will be set up by the end of this financial year.

He hopes that the Indonesian experience will help the company go elsewhere, like Brazil, for example, in two-three years. ‘‘About 25 pc of our sales come from Peru, Guatemala, Colombia etc.’’

With three more launches planned this year, including two scooters, a revamped Chetak and Wave, which will use digital twin spark ignition technology Bajaj has patented—and a whopping Rs 108 crore allocated for equipment and new product development, the Bajaj Juniors do seem to know what they are doing.

So, how are the changes affecting Rahul Bajaj, who ruled the scooter world during the licence raj? How difficult is it to give it all up? ‘‘Times have changed since I became CEO in 1968—and it will be disastrous if I don’t put the company in competent hands,’’ quips Rahul Bajaj. He admits that the “fire in his belly is now extinguished”.

‘‘Now, the fire is there to take on politicians, to represent India abroad and take on anything that is going wrong in India — like Maharashtra’s proposal for 52 pc job quotas in the private sector.’’ Come April 2005, that’s the role Bajaj senior will play.