Bajaj has some serious ambitions for its legendary Chetak scooter. Can the magic work once again?

The reintroduction of Bajaj Chetak in India could potentially be successful as the brand has a strong nostalgic appeal among older generations
 
Most certainly, Bajaj Chetak invokes something of nostalgia for millions of Indians. Once upon a time, when motor vehicles were scarce in the country, Chetak—named after the legendary horse of the warrior king, Maharana Pratap—was among the country’s best offerings for commute, especially for millions of middle class people. Legend even has it that the waiting period for the scooter extended 10 years, and in some cases, weddings were planned around the availability of the scooter in its heyday before the company decided to pull the shutters on the brand.
 
Modelled on the Vespa, the scooter started plying on Indian roads in 1972 before it was discontinued in 2005, in the face of growing competition from an influx of motorcycles in the country, and also amidst a generational shift in the company’s leadership when Rajiv Bajaj took over from his father, Rahul Bajaj.
 

Then, for nearly a decade-and-a-half, Bajaj, focused all its attention towards motorcycles, particularly its Pulsar models and a global expansion on the back of the Austrian motorcycle maker, KTM, before finally deciding to make a comeback into the scooter business. This time around, the company relaunched the Chetak as an electric two-wheeler in 2019, in the country’s fledgeling electric two wheeler industry that had been given an impetus by the government.
 
Bajaj’s relaunch of the Chetak, however, came a few months before Covid-19 wreaked havoc on the economy, pushing India’s automobile industry into a crisis. “Our approach has been to have a premium offering in the market, and the objective is to produce a vehicle which offers a consumer who's today buying a scooter, a one-to-one replacement with that scooter but at a premium price point, performance and durability,” Eric Vas, the president of electric vehicles at Bajaj Auto tells Forbes India in an interaction.
 
The company unveiled the Chetak scooter in October 2019 in New Delhi and commenced bookings in January 2020. “Since then, we have grown in a deliberate and calibrated manner. We are today sitting in approximately 45 towns as we speak, and we aim to be around 85 towns, 100 dealerships by the by 31st March, 2023” Vas says. That’s almost double the dealership numbers. Currently, the company offers one product and has overall sold around 30,000 vehicles to date. “We still continue to sell only one model, which is the premium in the marketplace,” Vas says.
 
“The reintroduction of Bajaj Chetak in India could potentially be successful as the brand has a strong nostalgic appeal among older generations,” says Harshvardhan Sharma, head of auto retail practice at Nomura Research Institute. “The challenge, however, lies with Gen-Z who might be an equally promising demographic to woo and who may have little cognizance of this iconic brand. Therefore, the product might have to draw on its future than its past to remain relevant in this segment.”

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Does it Stand Out?   

Bajaj, which launched the Chetak scooters at Rs1 lakh in January 2020, currently costs around Rs1.52 lakh in India. Its chief rivals including the Ather450 X, which retails at around Rs1.38 lakh while the TVS iQube retails for some Rs1.62 lakh. There is also competition from Ola, whose scooters start at around Rs85,000.
 
“We are the only electric scooter manufacturer that has a metal body,” Vas says as far as differentiation goes. “If you see our scooter, it looks and feels exactly like an ICE scooter. What drives this kind of product offering is our belief that what customers are looking for is the ease of transition from their current mode of transportation to the electric world.”
 
That’s why the company wants to offer products that are one-to-one replacements for internal combustion engines, and much of that, Vas says, is borne out of a similar transition at the four-wheeler segment abroad, where the focus has been on quality. “When Tesla launched, they had a high-performance car, but the cars that Tesla is making today are one-on-one replacements with the sedan with ICE,” Vas says.
 
The Indian electric vehicle (EV) market is expected to see 40-45 percent EV adoption for two-wheeler by 2030, according to a recent report by Bain &Company. That has meant that two-wheeler manufacturers, including existing and new ones, have been aggressively trying to woo buyers. “Our price points are different, and that's the function of the technology,” Vas says. “It's not a problem. It's by design. Every brand must choose where it wants to exist in the market. We have chosen a position that comes at a particular cost and hence the price. It doesn't mean that's the only vehicle we're going to have.”
 
“The success of Bajaj's pricing strategy for the Chetak electric scooter will depend on several factors, such as the target market, competition, and the overall value proposition offered by the product,” adds Sharma of Nomura. “If the target market is willing to pay a premium for the brand and the unique features of the Chetak, then the higher pricing may work in Bajaj's favor. On the other hand, as we know, the Indian market is quite price-sensitive and there are comparable electric scooters available at a lower price point, then the higher pricing could potentially backfire and limit sales. Ultimately, the success of the pricing strategy will depend on Bajaj's ability to effectively communicate the value proposition of the Chetak and how it differentiates from other electric scooters in the market.”
 
That’s perhaps why, at a time when two-wheeler electric vehicles have been in the eye of the storm for many reasons, including fires when stationary and moving, Bajaj says its products mark a difference when it comes to long-term durability. The company, which claims that its batteries are designed to last for 70,000 kilometres or around seven years, currently offers a range of nearly 100 kilometres on a single charge that takes some five hours.
                                     
“We've prioritised long-term durability of the vehicle over features,” Vas says. “Many electric vehicles in the market offer touch screens. We currently don't offer a touch screen, although everything on our vehicle is connected. But we don't use a touchscreen deliberately because our understanding, which is borne out by experience, is that touch screens when they are completely exposed the way a two-wheeler forces them to be, things go wrong a lot more often than one would expect. Things going wrong is a problem as far as consumers are concerned.”

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The company currently sells approximately 3,000 vehicles per month, and Chetak Technology Limited (CTL), the subsidiary that now incorporates all the electric offerings from Bajaj, has a capacity in the region of 6000 vehicles per month. The company will have the potential to produce 15,000-20,000 vehicles per month once it adds more capacity. Last year, Chetak Technology inaugurated its new EV manufacturing facility, co-located with its R&D centre in Akurdi, Pune.
 
The company also claims to own all the intellectual property on the various components of the scooter including the battery, motor controller, and even the telecom unit. “What that allows us to do is it allows us to tweak the product the way we want,” says Vas. “We are not dependent on a third party specialist supplier for any parts. I would go so far as to say that we are the only ones who have achieved that level of integration in the industry where every single major aggregate on the electric side has our intellectual property.” 

Eric Vas, President of electric vehicles Bajaj Auto

What Happens Now?  

For now, while Chetak operates with one model, Rajiv Bajaj has confirmed that the company intends to introduce one new model every year.
 
“We will launch one vehicle every year and there are many positions in the market so we don't have to be stuck on one position,” Vas says. “But yes, this product sits at the top. There are many positions in the market and as a company, we will always be open to exploiting them or addressing the needs of customers in those various positions. A single product cannot accommodate all positions.”
 
Bajaj set up Chetak Technology Limited in 2021 to push the group’s electric play in the coming years. “We wanted all electric focus to be on this company,” Vas says. “Because Bajaj Auto has a long legacy of petrol engine vehicles or internal Combustion engine. By putting electric in the same company, there can be a problem with organizational focus.
 
Today, CTL has a 500-member team that focusses on research and development in addition to having separated the workshops and is in the process of setting up individual showrooms. “We have gradually separated to a separate Identity and the reason for doing this was very simple,” Vas says. “When CTL was set up, the R&D guys were the first to move in. Now that the product is by and large ready in terms of basic technologies, there are many variants of the product still to come up with. That's a lot of work.”
 
India’s two wheeler electric vehicle segment is at the cusp of a serious transformation with numerous automakers lining up to make the transition into electric. “This is driven by several factors, including highly competitive TCO [total cost of ownership], limited need for public charging infrastructure given the adequacy of home charging for daily use, investments in building compelling product offerings with comparable performance to ICE vehicles, and early adoption by delivery and logistics fleets.”
 
In 2019, Bajaj entered into a strategic tie-up with shared e-mobility platform Yulu, where Bajaj would invest $8 million into the company whereby Yulu will source from Bajaj electric two-wheelers. In addition, demand from global markets could also mean that the Chetak could once again drive home sales in the coming years.
 
“Bajaj has a strong reputation in the Indian market for producing high-quality and reliable vehicles, and this legacy could help future cheaper products stand out against the competition,” adds Sharma. “Additionally, having a wide range of products at different price points can help Bajaj reach a wider audience and appeal to customers with varying needs and budget constraints. Offering a range of products at different price points can help Bajaj remain competitive in a rapidly evolving market.”
 
A decade-and-a-half after it faded into sunset, the Chetak has finally risen to a new tomorrow. It now remains to be seen if it can rework its magic once again in an India that has since changed.