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Mr Rajiv Bajaj cites the stool as an analogy for his company's growth strategy.
“Any stool needs three legs to be stable. Likewise, in our case, these legs are sales, profitability and brand image,” the Managing Director of Bajaj Auto told Business Line .
The company wrapped up 2011-12 with sales of 4.35 million motorcycles and commercial vehicles of which exports accounted for 1.58 million units. While it plans to maintain the 15 per cent growth rate this fiscal, the eventual goal is to be the ‘best motorcycle manufacturer in the world'.
Honda is, of course, the world leader in motorcycles and is rapidly gaining market share in India too after its recent split with the Munjals of the Hero Group. The Japanese automaker is a brand that is synonymous with quality and Bajaj Auto, likewise, believes that it find its own identity.
“Obviously, we cannot replicate Honda but can still be the best by being different. We cannot ape them but are trying to have our individual brands established strongly,” Mr Bajaj said.
Global market
It is here that the three-legged stool business model is critical to making this dream a reality. From the viewpoint of sales, Bajaj Auto has a ten per cent share of the global motorcycle market. “I believe we can double this to 20 per cent,” he said.
Profits, on the other hand, have ‘pretty much peaked' given that it is not going to be simple surpassing a consistent 20 per cent EBITDA posted over many quarters now.
As for brand, which represents the third leg of the strategy, Mr Bajaj is of the view that the company is halfway there.
“With the new Pulsar 200 NS, we can go even further while the new Discover to be launched this fiscal will take the story to the next level,” he said.
In addition, the Boxer has established itself in Africa over the last 6-7 years.
The more recently launched KTM brand (Duke 200) is fairly new but the market response has been encouraging with monthly sales averaging 1,500 units.
Ideally, the company like to have the Pulsar embedded in the customer's mind as a great sports bike, the Discover as a (great) commuter bike and the Boxer as the ultimate workhorse.
Over the last three years, Bajaj Auto's comeback story was built around this brand strategy. “We worked with the same products but the focus was sharper in terms of effective positioning. The next step is to enhance their positions from this fiscal,” Mr Bajaj said.
Simply put, the first three years involved more learning while the future will be more experience-based.
“There was a lot of headwind in the first phase while the tailwind is stronger now in terms of sales, profitability and brand position,” he added.
Mr Bajaj recalls the quote of the Roman philosopher, Lucius Annaeus Seneca — ‘As is a tale, so is life: not how long it is, but how good it is' — to drive home his company's vision, “It is not how many you sell but how good you are.”
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