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Speaking at the CNBC-TV18 Global Leadership Summit 2024, Rajiv Bajaj, Managing Director of Bajaj Auto, attributed the company’s enduring success to its ability to adapt. Drawing from Charles Darwin’s principle that adaptability, not strength or intelligence, ensures survival, Bajaj reflected on the brand’s evolution over 75 years. From a scooter-centric firm to a global motorcycle leader, and now a pioneer in electric vehicles, Bajaj Auto has navigated three significant transitions under consistent leadership.
Bajaj emphasised that sustained success requires not just innovation but the agility to embrace change repeatedly, defining the essence of a true champion. Below is the verbatim transcript of the interview. Q: What is Bajaj Auto? What is Bajaj Auto's mantra to keep going all these years, and how do you think the brand has evolved? What has been the playbook? A: First of all, congratulations on 25 years.
It is amazing that as a business channel, you have more than 95% share. So we should be asking the questions, and you should be answering them. Having said that if I have to answer your question in one word, the word would be ‘adapt’.
Charles Darwin said that in terms of the evolution of the species, that it is not the most intelligent or the strongest of the species that survives, it is the one that is most adaptive to change. So it is the same in business, to succeed is difficult, but to succeed over and over again, that is the sign of not just a winner, but a champion, such as Wipro, for example. In our own case, we have existed for a little more than 75 years.
For the first 40 years, we were effectively a scooter maker for India. And we have been through three transitions reasonably successfully. The first was from being a scooter centric company to becoming a motorcycle centric company with the launch of our own motorcycle in 2001 the Pulsar.
Then from being a domestic company to becoming a global company. Till 2002 we exported nothing. In recent years, we have been exporting almost half of what we make.
We are now the third largest motorcycle maker in the world, the largest three-wheeler maker in the world, and since January last year, the most valuable two and three-wheeler maker in the world. Also Read | Rajiv Bajaj reveals why brands fail: 'People buy different, not better' And finally, the transition now to electric vehicles. So for better or worse, it is the same team.
I have been there. My team has been there throughout for the last 34 years. So when the same team can make three successful transitions by adapting to changes outside, I think that is a sign of good leadership, good legacy, good longevity.
Q: Leadership is not easy. It's lonely at the top, and every leader has a moment of reckoning. And when you talk about companies like Wipro and Bajaj Auto, there could be many such moments.
One point that I always think about was perhaps 1998-1999 was perhaps the first time that Bajaj Auto first posted a loss in their two-wheeler business. How bad was that for you? Was that your moment of reckoning? Or was there something else that has been there, hidden in your heart somewhere? A: First of all, it was the financial year 2000 when what had been a very successful and profitable company, as you correctly say, lost money on its two-wheeler business for the first time. Fortunately, the three-wheeler business and the spare part business kept us afloat.
But before I answer your question, I must make it clear that at that time, it was my father who was in charge of the company, not me. So this problem is not created by me, first of all. But having said that, this was a difficult time.
And to put it briefly, if you read the book The Origin of Brands by Al Ries, you will see a lot of information which effectively conveys this, that it doesn't matter whether you are in software, motorcycles or any other business, 90 to 95% of all new businesses, new products and services fail. Now that is quite a lethal statistic, and this is true across the world, across industries, and what Al Ries teaches us is that they fail primarily because most of those products and services were brought out to serve a market and not to create a market. So when you try to serve a market to fulfill demand, and that is what most sales people want to do, you end up being a clone of someone else, as opposed to creating your own market, as opposed to generating demand as against just fulfilling demand.
And that is why my marketing guru, Jack Trout, I was very fortunate to know him, taught me that when you say, give your customer what he wants, that is only half the answer. The other half of the answer is, give the customer what he wants and what nobody else apparently can or does give him. And that brings us to the whole point about differentiation.
When it comes to a consumer business, it is about differentiation, differentiation and differentiation. The problem with differentiation is it is so counterintuitive to do something that nobody else is apparently doing and hoping that it will succeed, it is a scary thought, so you tend to follow the herd. And to illustrate, I would give you a quick example that Hero Honda brought out the 100cc four stroke motorcycle in the 80s, Bajaj Auto - it was my father - was seven years late with the same thing, and we tried to make the better product.
The hard lesson you learn is people don't buy better. People buy different. And how do you make different and not better? This is very key to your success.
Q: That was quite a difficult and tough learning experience. Wasn't that for you? Because for a long time in Bajaj Auto’s history, you tried to target the 100cc segment with Splendor - the Splendor motorcycle we see on the streets of India, that was the product that you were challenging, and you felt that was a waste of time. A: It's a great learning, if I may, share that experience.
So they had 100cc motorcycle. We had 100cc motorcycle, Piyush Pandey here was our partner on that journey, on behalf of Ogilvy, and we struggled, and we got nowhere with that in India, because somebody else was first to market. However, two things happened.
In the domestic market, we switched track from 100cc motorcycle to the Pulsar, which was different because it was not a better mileage motorcycle, it was a sports motorcycle, and that marked the turnaround of the company's fortunes in the domestic market. Whereas the 100cc motorcycle we took overseas to export markets at a time when Honda would not permit Hero to export out of India. And what happened in the end, the same 100cc motorcycle in India, Hero outsold us five is to one, the same 100cc motorcycles in all overseas markets, we outsold them 15 is to one.
It is the same management, same brand, same quality, same cost, everything else being same, the fortunes in the marketplace were completely different, only because depending on who was first to market. So that is why in marketing we say it is better to be first than it is to be better that is very important. Q: Today the automobile industry, and same for Wipro, the IT industry is going through a lot of disruptions.
AI is the biggest disruption. And in EVs, the technology is a major issue. Nobody knows where we will finally go.
You have often said that this is a moment of reckoning for the automobile industry. The battle is between the established mainstream auto players and how they embrace the new technology and the startup so Upstarts, as you call them. So who is winning and what is going to define who wins this battle and who lasts for the next 75 years? A: So there are three terminologies here.
There is ‘startup’, then there is a word, which I like to call, most of them, which is ‘upstart’, and then us - the winners or the champions. So I must explain what is the difference in my mind between a ‘startup’ and an ‘upstart’? In my mind, ‘startups’ are those who have a build strategy. They build technology, they build brands, they build products, they build consumer experiences, they build employee satisfaction, they build a strong top line, but they also build a strong bottom line.
Also Read | ‘They burn brands’: Bajaj Auto MD Rajiv Bajaj cautions startups not to become ‘upstarts’ ‘Upstarts’ are those who don't have a build strategy. They have a burn strategy. They burn technology, that is their batteries.
They burn brands by reducing price every month. They burn products in their factory, in the truck, at the dealership, on the road. They burn employee relationships with 50% attrition, they burn consumer relationship with poor service.
This is burn strategy. So this is ‘upstart’ versus ‘startup’. Now, as far as ‘startups’ and ‘champions’ are concerned, they are the same.
The only difference between a company like Wipro and Bajaj or a so called Startup is that we are ‘startups’ with a story, because we have been around for long enough to have built a story. I just told you a little bit about my story. Rishad Premji just told you a little bit about Wipro story.
So in legacy company, they try to imply that legacy means old. There are some startups, which are also not born yesterday. They are 5-20, years old themselves.
Hum log bujurg ho gaye, lekin tumhara bachpan kabtak chalega? So you can't keep calling yourself a startup forever. So legacy company is nothing but a startup with a story. And the best of both worlds happens when companies like ours dedicate 10 to 20% of their resources, in my opinion, to have a startup within itself - the Freedom CNG motorcycle, the Chetak electric scooter, the electric three wheeler we are making.
This is nothing but a startup within legacy company. And this is how you carry your company from your present activities into the future. So that is my definition of ‘upstart’, ‘startup’ and ‘champions’.
But if you give me another 30 seconds, I want to share with you what Piyush Pandey once told me in this regard, because startup people are intimidating, because they are from the IITs and the IIMs and all that. Hum log toh backyard me pade hue log hain. I will share with you a quote that Piyush told me in this regard, and this is what I would like to say to these ‘upstarts’ – fark bahot hain aapke aur hamare taalim me, aapne ustaado se sikha hain, humne haalaaton se.
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