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Cover Story
 

“We are Looking at Profitability, NOT Volumes”
Milind Bade, GM - Marketing, Bajaj Auto
Issue Date - 21/07/2011
 
B&E: How has the company been able to achieve such impressive numbers?
MB: What has happened over the past few years is that we have started to focus on selective products. For instance, within motorcycles, we entirely focus on Discover and Pulsar and this focused approach has given us an advantage to charge a premium, which has helped us keep our margins steady. As the focus is only on two brands, even our marketing spends have come down significantly.

B&E: Your entry level bike Discover is priced a notch above the other bikes in the entry-level. Has this strategy paid off?
MB: We have made a conscious attempt to operate only at the top and middle-end of the market. Unlike our competition, we earlier used to operate with a one segment, one brand philosophy but we today have several variants under the family. Our case is totally different from the competitor who has only two brands to talk about. Earlier, Discover was the 12th largest selling brand in the country, today it is the second-largest. We have a different approach to the market unlike many companies who have divided it into traditional segments.

B&E: Bajaj Auto surely comes on the top when we talk about margins in the industry, are you also eying to grab the top slot on the sales charts?
MB: As you rightly mentioned, we have the best margins in the industry, we are looking at profitability of our operations rather than mindlessly chasing volumes. We are not running ahead with the formula of chasing top-lines and assuming that the bottomline will automatically follow. In fact, we are not running with the #1 slot in mind. If that happens, it will happen as we continue to move towards a better future. We will continue to invest in our brands as it gives Bajaj an edge to command a price advantage over the competition. As of now, both Discover and Pulsar are in a very strong position in the two-wheeler market and the entry of Boxer will take it to the next level. Moreover, the next-gen Pulsars and Discovers are also expected to bring additional volumes to the company.

B&E: Will the rising input costs and interest be a hurdle in the growth of the two-wheeler industry?
MB: There are a couple of things that have emerged as a challenge for the entire automobile industry but I believe the two-wheeler sector will maintain a growth of 10-15% in this fiscal. Since the penetration level is still very low in the country, there is a huge demand still available. In fact, as all the two-wheeler manufacturers are trying to make deeper inroads into the hinterland, you will see the volumes touching new highs as the sector will test the unharnessed potential in this segment.

 

          

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