While Bajaj Auto’s top boss Rajiv Bajaj has maintained that the company will not re-enter the scooter market, Shankar Sharma of First Global termed it as a huge mistake to not make scooters.
While Bajaj Auto’s top boss Rajiv Bajaj has maintained that the company will not re-enter the scooter market, Shankar Sharma of First Global termed it as a huge mistake to not make scooters. “I think that was a huge mistake. For all the good work that Rajiv Bajaj has done, sometimes you can be too creative. I think that was a bit of excessive creativity,” Shankar Sharma told ET Now, in response to a query on the auto-maker’s decision to not make scooters.
Interestingly, Rajiv Bajaj, MD of Bajaj Auto has always maintained that the company’s policy is to specialise in a niche segment rather than getting into price wars. “We will exit the scooter market because we don’t see much sense in it. . . If we are to be a motorcycle specialist, we cannot make scooters,” Bajaj Auto managing director Rajiv Bajaj told had told reporters in 2009.
More recently in 2017, Rajiv Bajaj responded to a question on his decision saying that he would like to focus on gaining a bigger pie of the global motorcycle market share. “It’s like telling Tendulkar to play baseball because it also has bat and ball. We have only 10 percent of global motorcycle market share. Should I try to move in the motor-cycle segment which is 35 million vehicles world-wide from 10 percent to 15, 20, 25 and 30 percent where I have tailwinds or should I try and address the scooter segment where we are zero and try to build from there? To me it’s a no-brainer,” he asked.
Notably, Bajaj Auto’s share price has nearly quadrupled to Rs 2,786 from Rs 825 in December-2009. However, Sharma is confident about the prospects of the company going forward. “We have liked Bajaj Auto for almost a decade now. I consider it as the best management in India. Not just autos, they have proven themselves in financial services as well,” he said.
According to Sharma, auto stocks will continue to perform. “I’ve always believed that autos will outperform. This goes back almost 15 years. India is under-penetrated in two-wheelers, more in 4-wheelers. In 2008, I did a piece which said that car ownership is just 2% or something. You know it’s going to go up to 10%. That’s more than enough to make several times your investment,” he told the channel.