India's oldest two-wheeler OEM starts to add a new dimension to its business.
09 Oct 2019 | 10933 Views | By Sumantra B Barooah
Bajaj Auto, India's oldest two-wheeler manufacturer, is close to adding a new chapter to its journey with the entry into electric mobility, also seen as the future of the automobile industry.
The company says it has been working on some product propositions aimed to excite electric vehicle customers, a ...
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Bajaj Auto, India's oldest two-wheeler manufacturer, is close to adding a new chapter to its journey with the entry into electric mobility, also seen as the future of the automobile industry.
The company says it has been working on some product propositions aimed to excite electric vehicle customers, a breed that is currently rare in India. Could Urbanite be a defining moment like Pulsar, the brand which established the erstwhile scooter maker as a formidable motorcycle maker? "Everything depends on how the customers respond to what we put in. Obviously, we will work our hardest to get out what we think would be very exciting for the customer, and I am very confident that when we do put out a product or a set of products, we will see a resonance from the marketplace," Eric Vas, President of Bajaj Auto's Urbanite business unit, under which the OEM will offer personal electric vehicles, told Autocar Professional. Vas was speaking on the sidelines of the 59th annual session of the Automotive Component Manufacturers Association of India (ACMA) last month.
Vas said Bajaj Auto is "very committed" to electric mobility as it is going to be a "significant play" in the industry in the coming years. However, "timing is something which, frankly, I don't think any individual party can comment on right now. It depends on many parameters, including charging infrastructure which is a very big piece of course.”
In June this year, NITI Aayog, the central government's think-tank, had proposed that two-wheelers (below 150cc) sold from April 1, 2025 should be only electric powered. That, OEMs, who are already fighting the challenging BS VI emission deadline of April 1, 2020, felt was too stiff a timeline for the transition. Following a discussion between top executives of NITI Aayog and industry players, the policymakers asked OEMs to come up with a roadmap for electric mobility. A formal announcement of Bajaj Auto's entry into the electric mobility space may be made on Wednesday, 16th October.
Union transport minister Nitin Gadkari and NITI Aayog CEO Amitabh Kant are expected to join Rajiv Bajaj, MD, Bajaj Auto, at the announcement.
Challenge and opportunity
Electric vehicles will have to have very strong value propositions to gain mass scale adoption, primarily because of the big price difference. For example, the current price of the largest selling scooter Honda Activa is around Rs 70,000 while that of an Ather 540, a new-age electric scooter is Rs 113,000. It’s a similar story for motorcycles. "Going by that reality, combustion engine vehicles are going to be around for quite some time. You do not know how fast the battery prices will fall. I believe EVs are going to be very important for us in the way forward," Vas said in a panel discussion at the ACMA conference.
Vas' confidence also stems from the belief that there is a big set of customers who are sitting with a sense of ‘wokeness’, a term commonly referred to for being aware about developments in the world. "If you look at other brands that work around wokeness, they are very big and very substantial. I think the size of the market can surprise us and the price-point that people are prepared to pay for an electric product could also surprise us in a country like India," said Vas during the discussion, while adding that it is impossible to put a figure to that potential market at this stage.
It is estimated that 50 percent of Indian use non-motorised transport to commute. That is a huge opportunity. Unless there's some major cost reduction in EV technology or disruption in EV concept, the opportunity is there for IC-engined two-wheelers to tap first. While that is also a positive for Bajaj Auto, it will bet on the growing number of people in wokeness to build its new business division before EVs become a choice of the masses. The Pune-based OEM that played a major role in writing the history of mobility on two wheels now wants to script a similar story again. 'Hamara Bajaj' wants to script a 'Hamara Kal'.