Want to return the favour to Hero Honda: Rajiv Bajaj at CNG motorcycle launch

At the launch of the world’s first CNG-powered motorcycle, Bajaj Auto managing director Rajiv Bajaj said the company wants to “return the favour” to the erstwhile market leader Hero Honda which overtook Bajaj to become India’s largest two-wheeler manufacturer in 1997.

In 1993, around 70% of two-wheelers sold in the country were scooters but in a matter of five years people moved to more fuel-efficient motorcycles to reduce their fuel bill and that category became 70% of the market, says Bajaj.

The proposition today is exactly the same as it will halve the fuel bills, Bajaj says at the launch of CNG motorcycle ‘Freedom’ priced at ₹95,000 (ex-showroom Delhi).

“The favour that Hero Honda did to us in 1993, 30 years later we want to return the favour to Hero Honda,” Bajaj quips.

Recounting a story from 1997, Bajaj says one of his dealer friends told him that after Hero Honda became the market leader, its former chairman Brijmohan Lall Munjal, while speaking at a dealer conference, remarked that “now we have to be careful because the Tiger is wounded.”

“The message 30 years later is Tiger Zinda Hai (Tiger is alive),” says Bajaj.

The launch of Bajaj’s CNG motorcycle comes at a time when the government think tank NITI Aayog has set a target of 100% electrification in two-wheelers by 2030.

India is the world’s largest motorcycle market with about 9 lakh units sold monthly. Around 70% of sales come from light-weight commuter motorcycles of 100cc and 125cc where Bajaj has a small market share. Hero MotoCorp leads the commuter motorcycle segment in India.

"In major cities where there is adequate availability of CNG, 30% of car sales are CNG. If 30% is the penetration that CNG motorcycles achieve, then 30% of 7 lakh motorcycles is 2 lakh motorcycles,” says Bajaj.

He, however, says these things take time because the consumer behaviour has to change. “If it (CNG motorcycle) does very well, we are there to take advantage of the opportunity, if it doesn’t, then we will move on to something else,” says Bajaj.

Bajaj suggested that the government should seriously review GST (Goods and Services Tax) rates for clean fuels just as they did the right thing with 5% GST for electrics.

“If the equivalent of GST in major two-wheeler markets in the world such as ASEAN and Latin America is 8-14% and almost without exception their GDP per capita is equal to, higher or much higher than India. The aam aadmi of India is the one who can afford the least. Then what’s the logic, rationale and justification for 28% GST for commuter motorcycle,” says Bajaj, urging the government to bring down the GST rate on two-wheelers to 12%.

On making investments in research and development, Bajaj says, “If you do too little, then you have one kind of risk and if you do too much, then you run the risk of threatening the whole company. The whole company can go down if that bet goes bad. If we are not betting 10-15% of our bottom line on the future, then we are doing too little. If we do more than that, then we are doing too much,” he says.