Rahul Bajaj, a pioneer of the two-wheeler industry in India, will be stepping down as executive director and chairman of Pune-based Bajaj Auto with effect from April 1, 2020, the company said in a statement issued on Thursday. The octogenarian will be re-designated non-executive chairman from the same date.
The move, though not entirely unexpected, marks the end of an era in which Bajaj popularised the use of two-wheelers by middle-class Indian households that were looking for a cheap and convenient option for mobility. Bajaj, 81, was credited with successfully launching scooters like the Chetak and the Priya, which went on to become household names, along with the company’s marketing tagline: ‘Hamara Bajaj.’ The Chetak brand recently made a comeback in the avatar of an e-scooter, signalling the seriousness with which Bajaj Auto was taking the imminent growth of electric vehicles in India.
At present, Bajaj Auto is the third largest motorcycle company in the world with a turnover of over ₹30,000 crore as of FY2019. It is also the largest manufacturer of three-wheelers in the world; innovator of a new product called the quadricycle and a global partner to superbike brands including KTM, Husqvarna and Triumph.
Though he was executive chairman all this while, Bajaj had handed over operational control of Bajaj Auto to his son Rajiv Bajaj in 2005. While he has publicly differed with his son on a range of issues, he gave Rajiv a free hand to steer Bajaj Auto in whichever direction the latter deemed fit. As a result, Bajaj Auto exited altogether the scooters business, once the company’s mainstay, and focussed on the motorbikes segment with all its research, marketing, and distribution prowess.
Bajaj also took the smart call of demarcating business interests between his two sons Rajiv and Sanjiv Bajaj so that the two could independently chart their preferred course for wealth creation. This was done as early as in 2008 when the financial services business (under Bajaj Finance and Bajaj Finserv) was carved out of Bajaj Auto and given to Sanjiv to lead. Both brothers continue to be directors on the boards of each other’s companies.
Bajaj Auto, with a current market capitalisation of over ₹90,000 crore, obtained a licence to manufacture two- and three-wheelers in 1959 and started independent production under the Bajaj brand in 1971. He shifted base to Pune from Mumbai and set up Bajaj’s manufacturing unit in the industrial area of Akurdi, on the outskirts of Pune. While Bajaj’s campus at Akurdi (where Rahul Bajaj stays till date) still serves as the corporate headquarters and the research and development centre of the auto major, manufacturing has since shifted to other locations such as nearby Chakan, Aurangabad, and Pantnagar.
Bajaj, a former Member of Parliament in the Rajya Sabha (Upper House), has always been known not to mince his words. Most recently, speaking at an awards function organised by The Economic Times, which was also attended by home minister Amit Shah, Bajaj openly criticised the government. He observed that there was an atmosphere of fear where people were afraid to criticise the government. “You are doing good work, but if we want to openly criticise you, there is no confidence that you will appreciate that,” Bajaj had said.
