A successful reincarnation: Can Bajaj Auto do a MINI with the Chetak?

What’s common among the Polaroid, the MINI, the Volkswagen Beetle and the Vespa? These are all brands that enjoyed haloed status before slipping up and were revived in the nick of time. While some like the MINI owned by the BMW Group have been successfully reincarnated, others such as the Vespa have only been chugging along; some like the Beetle saw its iconic status get diluted before retiring forever in 2019.

On October 16, Chetak, the popular scooter brand of the pre-liberalisation era from the Bajaj Auto stable, leapt out of the sepia-tinted picture frames in a new, premium avatar joining the list of brands that have got a second life. Estimated to be priced upwards of Rs 100,000, the maiden electric offering from the Pune-based company will go on sale from January 2020. It will be pitted against Ather Energy’s e-scooter.  

It is easy to understand Bajaj Auto’s alacrity. Backed by the policy push, India’s nascent e-vehicle two-wheeler market sold close to 126,000 units in fiscal 2018-19, a year-on-year increase of 130 per cent over last year, according to the Society of Manufacturer of Electric Vehicles.

Amid increasing competition from scooter brands like the Honda Activa, which had the first- mover advantage in the gearless scooter segment, Bajaj pulled the plug on the Chetak and exited the market in 2005 to concentrate on the more profitable motorcycle segment that offered a broader play in terms of market and segmentation. Having firmly established the motorcycle business over the last 15 years, in domestic and 70 overseas markets, the Rajiv Bajaj-led firm now aims to do with Chetak what BMW did with the MINI — turn a popular mass brand into an icon with a premium, differentiated positioning.

The strategy will serve a specific purpose — pay tribute to a brand to which Bajaj Auto owes its existence and create another niche in line with its decade-and-half old philosophy of creating multiple niches within the two-wheeler business, says Rajiv Bajaj, managing director at Bajaj Auto. “Chetak has built this company. Seeing the scooter, people should feel Bajaj has done justice to the brand. We didn’t want to bring it back in a low-cost or cheap version. We wanted to bring it back in a sexy, riveting and gorgeous form,” said Bajaj dwelling on the reason for choosing the premium route to enter the EV market. “We have taken a leaf out of BMW’s book,” he adds.

Deepesh Rathore, co-founder and director at Emerging Markets Automotive Advisors (EMAA), says the entry of Bajaj Auto in the electric two-wheeler market “will bring lot of seriousness to a market that so far has been very gimmicky”. He says while the market has seen new launches at a steady pace, “all models bear the same look as they are all made in China”. At present, Ather Energy is the only company to develop a e-scooter ground up.

BMW acquired British carmaker Rover, the owner of the MINI in 1994. It sold Rover in the year 2000 retaining the MINI and re-launched it in 2001 as a premium British heritage model without tinkering with the brand DNA. Even though the model is part of the BMW Group and sells through the same outlets as its other models, the MINI doesn’t wear the German badge, helping the brand retain an independent identity.

Back to Bajaj. Brand experts have hailed its strategy of hitching a ride on the Chetak to address the needs of the future. “It makes sense to build on the equity of Chetak, repurposing the brand name to introduce a new product,” says Kiran Khalap, co-founder and managing director at Chlorophyll, a brand and communication consulting firm. “The challenge is how well the new product will express the core values of the brand — because the core values do not change — while fulfilling contemporary needs.”

The identity of a brand, according to Bajaj, is maintained at three touch-points — the product, the communication and the showrooms. The MINI doesn’t wear the BMW badge and there is no mention of the German branding in any of the communication. Even though it is sold through the BMW showrooms, MINI has its own identity. For its part, Volkswagen failed to do the same thing with the Beetle. It continued to call it the Volkswagen Beetle. It was sold through the same VW showrooms alongside the Polo, Passat, and other models that were routine, modern cars, says Bajaj. The result is for everyone to see — MINI’s sales continue to grow year after year while the Beetle has been relegated to history, points out Bajaj.

Like the MINI, Bajaj will follow a differentiated product, communication and retail strategy which in turn will help in conforming to its niche positioning. Drawing from BMW, the Chetak e-scooter will not wear the Bajaj badge. To begin with, the Chetak will be sold through Bajaj’s Probiking showrooms that retail the KTM motorcycles and also sell the Husqvarna models. Chetak will also be retailed through standalone showrooms, owned and operated by the company — one each in Pune and Bengaluru. Once the volume expands, it will be sold through independent outlets.

EMAA’s Rathore says Bajaj’s strategy of targeting the premium end of the market will likely pay off as for every segment the early adopters are the ones with deep pockets and the willingness to spend. While most e-vehicle players have been targeting the low end of the market, “Bajaj has just flipped the game upside down”, he adds.

The classic, retro design of the scooter, says Bajaj, will lend the Chetak a distinct positioning in the market. “We are not a very brave company. We are a coward company that makes safe choices,” points out Bajaj. The company could have chosen to go with a sharp, racy, design much like the Ather and other scooter brands from Japan, but it stayed off that path as the idea was to bring back Chetak in top-of-the-line form to draw buyers instantly, points out Bajaj.

Going ahead, Bajaj will bring more e-scooters — catering to a range of consumer segments. While all e-scooters with a classic look will be launched under the Chetak brand, others with more modern, chic design may be launched under a new brand name.

 The electric two-wheeler offerings will always be a scooter and never a motorcycle as e-scooters are able to address the daily urban mobility needs better, says Bajaj. “This is also to ensure there is no conflict of interest with our core motorcycle business.”

All said, the real test for the company will begin once the Chetak goes on sale. Like with Ather, Bajaj must be prepared to incur losses early on. To state the obvious, the quantum of losses and the break-even point will depend on the acceptability of the model.

Geared for a new race

Bajaj Chetak milestones

 
  • 1976 *Indians could only buy Chetak with foreign currency
  • 1980 Chetak had a waiting period of 10 years 
  • 1983 The scooter touched 500,000 unit mark 
  • 1995 Bajaj Auto's sales of scooters touched a one-crore mark
  • 2005 The company exits the scooter market

*As per a scheme launched by the company, only if one had dollars or foreign currency equivalent to Rs 6000, could one book the model. 
Chetak e-scooter specification

  • Mileage Up to 95km electric range
  • Top Speed 60 kmphMotor 4kW
  • Battery Type IP67 -rated Lithium-ion Battery
  • Charging System 5-ampere

 



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