Rajiv Bajaj did some straight talking at the ACMA (Automotive Component Manufacturers Association of India) annual session in New Delhi on Thursday. The theme for this 54th convention was ‘Capturing the Global Opportunity’.

The Managing Director of Bajaj Auto was part of a roundtable discussion which focused on the challenges of going global for Indian ancillary suppliers. “What we did not do were two things which helped us: listen to advice from business schools and management consultants,” Bajaj said.

This tongue-in-cheek comment was made soon after global consultant McKinsey had made a half hour presentation on Vision 2020 for the components sector. The timing naturally tickled the audience silly and they broke into spontaneous applause.

Bajaj dwelt on his company’s global experience and the lessons learnt along the way from the time it was a domestic player till about a decade ago.

Talking strategy Today, half its output comprising two million bikes and three-wheelers is exported every year to a host of countries including Africa, Latin America, the ASEAN region and South Asia.

The first thing the company did was to draw up a matrix of its existing products and new ones planned. Familiar markets like Bangladesh, Sri Lanka and Nepal were the first part of this exercise followed by newer geographies.

As Bajaj explained, the company was not competing with its products at the lowest level like the Chinese or, likewise, in the top league. In reality, it was midway akin to the Japanese but still way behind in technology, distribution and scale.

Hence, it was important to narrow the focus and do one thing right. “As a result, we are less known for making motorcycles and better known for not making scooters,” Bajaj said, a dig at critics who insist that the company is goofing up by not getting back into this space.

Finding a niche “The route to globalisation is specialisation. Business needs to narrow its focus and dominate a category,” he added. Today, technology and engineering are given and the truth is that the auto sector is a marketing industry. According to Bajaj, it is the product that is first-to-market which works. While there is no question that cost and quality are factors, the most important is speed and creation of a category.

This has been the company’s mantra which kicked in with the Pulsar sports bike in 2001 and continues with the Discover commuter model which is facing stronger headwinds as a challenger brand. It has further honed its global strategy by leveraging alliances with Kawasaki and KTM to enter markets like the US, Europe, Japan, Latin America and the ASEAN region.

Philipp Radtke, Director of McKinsey (Munich) and part of the roundtable discussion, said it was important for ancillary suppliers to constantly have an interface with their vehicle customers, especially if they happened to be Japanese automakers. According to him it was important to grow with the OEM concerned where the best examples were Japanese and Korean suppliers.

Jagdeep Singh Rangar, MD of Stork Rubber Products, said one of his takeaways with global customers was to be patient and persevering as it typically takes 3-5 years to get a break. The others in the discussion included Vinod Dasari, MD of Ashok Leyland, Nigel Harris, President of Ford India and Rajeev Kher, Secretary, Commerce Ministry.

Earlier in the day, Piyush Goyal, Power and Coal Minister, said the Government was keen on reviving the manufacturing sector. This was especially critical in the context of job creation.

The auto industry is facing challenges on availability of power and Goyal said efforts were on to solve the problem. His other priorities were to ensure greater ease in doing business with no bureaucratic interference.

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