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Liquidity issues, rising insurance and fuel costs affect sales, says Rajiv Bajaj

Updated : May 28, 2019 12:06 PM IST

Auto companies are facing a slowdown in recent quarters due to liquidity issues, a hike in insurance and rising fuel prices, said Rajiv Bajaj, managing director of Bajaj Auto.

Axis Bank CEO Amitabh Choudhry in a candid conversation with Bajaj at Axis Capital 12th Annual India Conference asked him about why most motorcycle brands fail to launch successful products in the market. Bajaj said most of these products and services fail because they were launched not to create a market but to serve an existing market.

He further said there are about three types of companies in the auto sector – one is Honda (India Motorcycles) they can create products but haven’t created new segments successfully. Two, Enfield – they have created new segment but not sure they can make products. Three, company like Hero, which is a big opportunity for Bajaj because they have neither created products nor segments and everything they make has come from Honda.

“It is very important that one is able to create not just a new product but creating a new segment where you look like the pioneer of that segment,” said Bajaj.

He was not sure when growth would come back after overcoming all these factors. So, according to him, it is important to adapt, which means to derisk. Bajaj Auto has derisked by derisking products --by being in different segments but are in the resonant harmonious synergistic segment – largely motorcycles and not just in one market.

Talking about spurring growth, he said we have to think like engineers and marketers. “Our mantra is to differentiate and polarise,” he said.
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