Focus on products, not on adding plants, advises Rajiv Bajaj

By: |
Published: January 22, 2019 12:52:36 AM

Bajaj Auto managing director Rajiv Bajaj said on Monday that instead of setting up more units, the industry should focus on products to suit the market’s requirements.

Bajaj believes it is not logical “to call a two-wheeler a luxury item”

Bajaj Auto managing director Rajiv Bajaj said on Monday that instead of setting up more units, the industry should focus on products to suit the market’s requirements.

“I don’t want to build any plant because you have to first buy land, get the labour in, manage them everyday, give them uniforms and food,” Bajaj said.

On whether Bajaj Auto would need another plant to cater to the growing overseas shipments, the MD said, if Apple could operate without a plant in India and be such an outstanding iconic brand, why should Bajaj have any other plant. Approximately 40% of the company’s sales are derived from overseas markets.

READ ALSO | Where are jobs? Not just India, the world is asking this question; here’s what worries them most

Bajaj said the problem with Indian businessmen was that “the first thing they think about is real estate”. He cited a friend who had informed him that in western countries several companies were able to do business without owning plants.

Bajaj believes it is not logical “to call a two-wheeler a luxury item”.

He observed that if a 28 % rate is for luxury goods and 18% is for other items, then logically “it seems to me that 18% makes more sense.”

Calling for tax cut when the upcoming safety and emission norms come into effect, he said a review of GST would be logical. “Companies will have to pass on most of the `10,000-15,000 price increase in a 150cc bike,” Bajaj added.

The Pune-headquartered Bajaj Auto — with a market share of 18.3% in the motorcycle segment — has manufacturing plants in Akurdi, Waluj and Chakan in Maharashtra and a plant in Pantnagar, Uttarakhand.

The Uttarakhand manufacturing facility is solely for making two-wheelers while the Waluj plant is used for manufacturing three-wheelers. Bajaj’s total production in FY18 was 33,90,748 units, up 5.65% and while the output in the April-December 2018 period was 32,12,701 units, up 27.94% y-o-y.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.