Chetak’s portfolio will be expanded in the future, and the manufacturer is optimistic about the e-prospects scooter’s in ASEAN markets.
Rakesh Sharma, Bajaj Auto’s executive director, reiterated that the company will have to “ride both horses” for a while, referring to electric and internal combustion engine (ICE) vehicles, which remain the company’s mainstay.
“We could have done everything within Bajaj Auto if the transition (to electric) had been quicker.” However, we recognized that this would take time, and that it was critical for a nascent emerging sapling — which will remain so for some time — to receive undivided attention, so we decided to found Chetak Technology,” Sharma said at a recent roundtable at the corporate headquarters.
As a result, for a long time, these two businesses will have to be managed in different ways. The ICE story “will not be over in a hurry,” and even if half of the two-wheeler segment goes electric by the end of this decade (an optimistic estimate in and of itself), Bajaj Auto will still have to manage the other half.
“We know electric will be a significant business directionally, and we are building capabilities to succeed,” Sharma said, adding that predicting Chetak Technology’s growth curve and breakeven point was difficult. These projections are “easier in an ICE regime,” but “we are getting future-ready” in the electric world.
Yulu’s collaboration with Bajaj
Akurdi is also the site of a new product initiative with start-up Yulu, which will be handed over in October. Sharma admitted that he was looking forward to this episode. “In Bengaluru, I spent some time meeting delivery people and had a good time. “E-commerce and food delivery companies are forming a fascinating segment,” he said.
This partnership with Yulu is also teaching Bajaj Auto a lot, which will hopefully enable it to provide product solutions that it can then incorporate into its own plans. It’s still unclear whether this will be under the Chetak brand, as it will depend on the product form “on which we will expand.”
Chetak’s Portfolio is Being Expanded
Sharma went on to say that the company would expand the Chetak portfolio vertically and horizontally while keeping the current structure. “This industry isn’t very big, so there’s no point in segmenting it right now.” However, as the population grows, people’s preferences will diverge significantly,” he said.
Bajaj Auto expects three to four sub-segments to emerge in the coming years, with different products to address them in the “same ethos as Chetak.” The market can be segmented based on price, age, gender, and other factors, and the Chetak portfolio will grow in accordance.
“It could be Chetak or even new electric vehicle brands like Pulsar, which will be part of Bajaj Auto.” RE is the brand name for three-wheelers. “KTM is interested in electric as well, and a Husqvarna scooter could come here,” Sharma said. Until now, Triumph, Bajaj Auto’s other global partner, has not discussed electric vehicles.
Chetak’s International Market Prospects
Sharma expressed his excitement about Chetak’s international prospects, particularly in the ASEAN region, where countries such as Vietnam sell 3.5 lakh electric two-wheelers each year. The net tally, including Thailand and Indonesia, was 10 million units per year, with scooters accounting for 35 percent, step-throughs for 55 percent, and motorcycles accounting for only 8-9 percent.
Japanese brands currently dominate the market, and Bajaj Auto currently only sells motorcycles. “With electric becoming more popular, and if the trend continues, it will be a fantastic opportunity for us.” We don’t have much ICE in ASEAN, but the supply chain is a problem right now, and some stability is needed.
Taking Care of Supply Chain Issues
The chip crisis appears to be taking two years to resolve, and volatility is expected to continue. In recent months, the company has suffered more as a result of working with fewer established vendors to manage innovation and quality. “Once you have a good understanding of the product, you can go to a smaller vendor,” Sharma explained, “but in the learning phase, we needed big global vendors who were affected.”
Over the last four months, Bajaj Auto has widened its net, giving it more options to choose from, which should help alleviate some of the supply chain issues.