Let’s start with the launch of this CNG bike. What is the value proposition of this model with EV and ICE models?
Rakesh Sharma: Well, for the full lowdown you have to come to Pune on the 5th; at 2 pm we open a new bike. Now, it is enough to say that this is the result of intense training over the last two to three years. We will show through this, the power of innovation at Bajaj Auto. It addresses a very large market size. Almost 70% of the one million per month motorcycle market has some level of sensitivity to fuel economy. All our efforts are that we must make a significant difference. Otherwise, making an additional difference, which we have tried, has little benefit. People do not switch for additional differences and where is our experience with CNG in the last 20 years through these three wheels. We are the first to launch RE, a three-wheeler based on CNG fuel. So it cuts the cost of fuel which is among the three or four biggest expenses in the household by almost 50%; that saves significant.
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An average customer who earns Rs 30,000 to Rs 40,000 per month can expect to save depending on the amount they try about Rs 1,500 per month. Second, with all the push from the government and also with the companies regarding decarbonization, CNG, while still a carbon-based fuel, has a lower carbon content, and so far, is more beneficial from an environmental point of view. let’s say diesel or petrol, especially in carbon emissions. So, there is a significant reduction. Thirdly, we find that while doing this in parallel, there is a great and good effort by the Government of India, the Ministry of Petroleum and Natural Gas to drive the CNG network, which has been very successful. And in fact, our three-wheeler business has been riding. Currently, 70% of almost all districts in India are covered by CNG network. All gas distribution companies are looking for increased throughput so that there is a good return on capex and where there is a coincidence, but very, I mean, providential, but very good alignment with the thrust of the government. When we do this, we think, let’s bring all the understanding of comfort requirements, what is ergonomic, how to ride people and passengers, and let’s bring it. all this together to this new bike and everything is packed together with a 50% reduction in fuel consumption.
A few years ago, when one of the first passenger car manufacturers went ahead and launched CNG, a large part of the passenger vehicle market switched to CNG, possibly for commercial terms, taxi use, etc. Could this be such a big change that some of your products could be cannibalized? Does it still make commercial sense in the bigger scheme of things in terms of volume and profit for you?
Rakesh Sharma: Yes, you are right, this hope or anticipation can be a turning point in the development of the two-wheeler industry in the country. And if we have to take the program from the government at face value, which I have no reason not to believe, that the network will grow faster and faster, every month 100 new pumps are added, so it means. CNG will be available everywhere. At this point, our estimate is only 60%, but it will be 80%. So you can see that 70% of the one million people are at some level, fuel efficiency sensitive and almost 70% of the Indian market will be covered. And can release this transition. But having said that, this important point is the change in customer behavior, which is what we need to look at. Because now customers have to go to different gas stations, customers have to get used to different fuels and refueling, etc. So, many responses must also be provided by the distribution company. this market is growing.
So, this is the piece we’ve finally been waiting for. But I have no doubt that after some time, it is only the slope that one is concerned about, but after some time there will be a change in shape. Because it is Rs 1,500 per month for people in that category. We’ve seen this happen on three wheels. For a long time, we hammered our heads against diesel three-wheelers, where we have an adverse competitive ratio, but we cannot make a breakthrough, we will not get dealerships in Bihar.
But when CNG pumps came there and people saw that Bajaj CNG was better, we were flooded with inquiries about the dealership, because people were switching from diesel to CNG. After all, they save Rs 1,000-2,000 every month. Of course, that is a commercial category. We have also seen this happen in electric vehicles, where there are more concerns – about charging, range, batteries, etc. hint about where i will fill it? What will happen to the battery? Is it safe and all that?
So, this is a very strong proposition, combined with the fact that it will not be an apologetic vehicle, it will be a vehicle whose style and design will stand on its own and will also have all the lessons learned. from the last decade in what people in small towns and people from riding habits need to make a comfortable ride. So, I think it could be an important moment, but we have to wait and see how our customers respond to this change in behavior in terms of visiting different gas stations and fueling patterns and so on.
What about the next five years? Do you have any plans to export CNG bikes?
Rakesh Sharma: India is unique vis-s-vis CNG penetration. It is without parallel. There are some countries like Bangladesh, Egypt and even Tanzania where you get a CNG network too, but not outside of Dar es Salaam. Then there is Peru, also in Argentina. So, there are about half a dozen countries that could be direct candidates. Also, Nigeria has started with CNG, but we have to see how the CNG distribution plan will fare in the next five years. At this time, approximately six countries can receive the product.
Anything on CNG motorcycles you want to reveal about the name? Rumor has it it will be called Bruzer. Is that true?
Rakesh Sharma: Well, it’s hard for me to say anything, because it will break the thunder on the day of the launch. But Bruzer is a code name and as much as I can tell it won’t be Bruzer. The brand name is another. It’s an evocative brand name. And it will be another. It’s a bike, which has a very stand-on style. And then get the capability of biofuel in the sense that it has got both CNG and gasoline so it brings in a large amount of reassurance.
Second, it also increases its reach. With a full tank of CNG and a full tank of petrol, you can ride for a very long distance. It takes care of many ergonomic and comfort issues. We will start with one or two products, but depending on how this thing is received, the pace at which it is received, we want to expand the portfolio and we are also happy that Mr. Gadkari will be at the launch, because he has been a champion for alternative fuels and decarbonization and sensitivity to the environment and we are happy that he will be there at that time. That’s all I can say right now without taking the thunder.
