Bajaj set for a massive restructuring programme

India’s second largest two wheeler manufacturer Bajaj is going in for a massive restructuring. After announcing that the manufacturer would exit the scooter segment, Bajaj will distance itself from the Bajaj group that sports everything from hair oil to insurance. Bajaj’s Automobile segment will only consist of four brands of two wheelers – Boxer, Discover, Pulsar and KTM apart from the rear-engine three wheelers.

“The Bajaj brand is very diffused, covering everything from heaters and hair oil to insurance and financial services. Correcting that problem is the biggest opportunity for the company,” said Mr Bajaj. He further added that “We have to be clear about what our brand stands for. A sporty Pulsar and the humble auto rickshaw are as different as chalk and cheese.”

Bajaj has already discontinued its XCD 125 and 135, Wind, Caliber among many others. The CT100 will be continued to be made for export markets but Mr. Bajaj explained that all the entry level models would merge into the Boxer brand within a year. The Platina is safe though and Bajaj has no plans to push it to the background. “As the market evolves, we will figure out how to transition the Platina to the Discover,” he said. “We said to ourselves we must have a strong differentiator in the marketplace so the consumer will buy us even when he has a choice of buying a rival (Japanese) brand. It can’t be cost, quality or production levers, so it has to be a brand lever as that would be the most potent level at which to differentiate oneself—at the level of the business model itself.”

Such a reorganization will realign the entire brand from marketing and sales to R&D, accounts, finance, advertising, HR, production and distribution along these verticals. It could lead to the company dropping the Bajaj brand eventually. “In a brand-centred company, the brand strategy must manage all decisions, including styling, performance, sourcing, positioning, and pricing,” said Mr Bajaj. “Teams will be allocated to the brands to make them verticals.”

What this means is that the four sub-brands will work individually with individual fund allocations and operations. According to the new plan, all products made by the company will come under the five categories. The company’s new game plan also explains Mr Bajaj’s decision against placing the Bajaj badge on the ultra-low-cost car being jointly developed with Nissan and Renault. “Extending our existing brand name to that product would have been contra to our strategy,” he said, adding that the ultra-low-cost car doesn’t fit into any of the five brands. Bajaj may jointly own the car’s brand name, though.

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