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He said Bajaj Auto is a small company and it is wasteful to create expensive concepts
At a time when the automobile industry is gearing up for the Delhi Auto Expo, Bajaj Auto MD Rajiv Bajaj said on Monday that it is too expensive to participate in the biennial show and wasteful to create expensive concepts.
The company, which unveiled its new bike V today, is skipping this year's Auto Expo citing high costs. The expo, which will be held between February 5-9 at Greater Noida, is expected to witness 80 new launches.
"To participate in such event it takes around Rs 10-15 crore (Rs 100-150 million) to make those concepts and the poor R&D department is spending half their time creating these concepts.
"There are some big car companies who have big money, they can do it. We are a small company. So to spend such amount is not affordable for us," Bajaj told reporters.
Elaborating his position, he said: "To show the same thing, V model, over there (at Auto Expo) it is Rs 5 crore (Rs 50 million), we have managed it here for Rs 500,000," he said.
The Pune-based company on Monday unveiled its new bike model 'V' at an event in New Delhi.
Bajaj said with the company being an established brand in India, the expo didn't serve the purpose of creating brand awareness as much as it would have been helpful to a new company which was entering the country.
"If we are a known brand in India. If it is wasteful to create expensive concepts, if it is too expensive to participate to show a new product and existing product can be shown in any dealership, then I don't understand what is the purpose of participating," Bajaj said.
Although the company had taken part in the previous editions of the Auto Expo, he said another reason to participate is "to showcase some technology and concept and all. I think the shelf life of this (concepts shown at the event) is not even one week" and no one remembers it for long.
The company's rivals Hero MotoCorp, TVS, Honda Motorcycle and Scooter India, Yamaha are all participating in the Delhi Auto Expo.
When asked about Bajaj Auto's plans for a comeback in the scooters segment, Bajaj said the company's focus right now is on enhancing its position in the motorcycle market.
He further said the motorcycle industry is roughly 900,000 units per month with about 400,000 units from premium segments and 5 lakh units in commuter or executive segment but the total scooter market is at 400,000 units.
Motorcycles have bigger volume and sell at higher prices than scooters, he added.
Reiterating that he never said Bajaj Auto will never make a scooter, Bajaj said: "All I have said is that we are a global company and a global company must do one thing right at a time...When competition is benign you can do ten things and get away with that.