RE60 Case

W16274
BAJAJ RE60: THE BRANDING CHALLENGE OF DISRUPTIVE

INNOVATION
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Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-05-13
Ramesh C. Maheshwari, president of the Commercial Vehicle (CV) division at Bajaj Auto Ltd. (BAL),
was contemplating various branding alternatives for the company’s indigenously developed quadricycle.1
Since his appointment as president of the CV division in 2007, Maheshwari had focused on nurturing and
expanding the three-wheeler (3W) category. In defending BAL’s leadership position in the 3W-CV
market, the company had assembled a senior-level team, including BAL’s managing director, Rajiv Bajaj;
chief technology officer, Abraham Joseph; president of international business division, Rakesh Sharma;
and Maheshwari. The team had unearthed critical insights on urban transportation specific to developing
market conditions. These insights suggested that the market needed an innovative product to mitigate
urban transportation problems. Bringing such an innovation to market could help BAL in protecting and
expanding its leadership position. It had taken almost five years to develop a radically innovative product
in the form of a quadricycle. By 2014, the product was ready to be launched. However, establishing its
position in the face of strong opposition from competitors and stakeholders was proving to be a challenge.
When the team members began discussions on branding and marketing the quadricycle, Maheshwari
recalled that they had thought of the product as an improvement over the existing 3W (popularly called
the Bajaj RE [rear engine]) and felt that the new vehicle should be a logical extension of the Bajaj RE
brand. However, Rajiv Bajaj, who had championed the project, thought of it as a product that could
capture category leadership in a new category of Indian vehicles. Since the product was being introduced
in a new vehicle category (quadricycle) where no other players existed in the Indian market, he felt that
BAL could harness its first-mover advantage and build a strong, independent brand of quadricycles.
Over time, their stances reversed. Maheshwari began to appreciate the idea of branding the new product
as an independent brand, while Rajiv Bajaj started exploring the idea of extending the RE brand to the
four-wheeler (4W) vehicle. This reversal put the team in limbo and prompted it to revisit the fundamental
branding premises of all BAL brands in the CV and two-wheeler (2W) segments. The success of this
potentially disruptive innovation was now dependent upon the team’s branding strategies and approach to
the market. Mistakes at this stage could be fatal for BAL because it could lose its first-mover advantage in
a highly competitive market and miss an opportunity to rejuvenate its profitable but stagnating CV division.
This document is authorized for use only in Dr Swati Vispute's MBA 10.24.2019 at Symbiosis International University (SIU) from Oct 2019 to Apr 2020.
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BAJAJ AUTO LTD. (BAL)
BAL, established in 1945, was the flagship company of the Bajaj Group, which was counted among the
top 10 companies in India. The Bajaj Group had a stronghold in a wide range of industries, including
automobiles (2W and 3W), home appliances, lighting, iron and steel, insurance, travel, and finance. BAL
had three main divisions: the domestic motorcycle business unit (manufacturing and sale of motorcycles),
the domestic CV business unit (mainly manufacturing and sale of 3Ws), and the international business
unit (exports of 2Ws and CVs). BAL was the world’s fourth-largest 2W and 3W manufacturer and the
world’s largest manufacturer of 3Ws. The market share of BAL as a leader in international markets was
98 per cent in Egypt, 95 per cent in Bangladesh, 92 per cent in Sri Lanka, 84 per cent in Peru, and 59 per
cent in Nigeria. Among its competitors, BAL led the worldwide market with 64 per cent market share,
followed by Piaggio (19 per cent), Mahindra and Mahindra (6 per cent), and TVS Motor Company (6 per
cent). Other smaller players constituted about 5 per cent of the worldwide market. The volume
contribution of the motorcycle division in 2013/14 was 88.68 per cent versus 11.32 per cent of the CV
division. In terms of sales, the motorcycle division contributed 77.65 per cent and the 3W segment
contributed 22.34 per cent. In terms of earnings before interest, taxes, depreciation, and amortization, the
motorcycle division contributed 66 per cent and the 3W segment contributed 34 per cent (see Exhibit 1).
The Commercial Vehicle Division
The focus of the CV division was the 3W, more popularly known as the autorickshaw, produced at BAL’s
largest plant at Waluj, a town in Aurangabad, Maharashtra. BAL had a 51 per cent share of the 3W
market in India, with a concentration of 88 per cent in urban markets. Its 3W footprint spanned several
countries in Latin America, Africa, the Middle East, South Asia, and Southeast Asia.
BAL and Its Brands
The Bajaj brand was rooted in its organizational culture and historical background. It was perceived as a
gutsy Indian company that did not succumb to pressure from multinationals. Historically, it had played
the role of an independent company that had put India on wheels. BAL was known and admired for being
a pioneering and nimble company that was proudly Indian. Since it had always directed its efforts towards
meeting people’s needs on a large scale, it was associated with reliability and robustness. “Bajaj” was an
all-encompassing trust-mark. Rajiv Bajaj articulated the strengths and weaknesses of the Bajaj brand: “As
a master brand, the role of Bajaj is only a final assurance of some lineage or heritage, but in my view, the
familiarity does not breed desire. If I were to say to you, ‘Let me show you my new Bajaj,’ you wouldn’t
know what I would throw at you.”
While acknowledging the brand’s ability to resonate with its stakeholders, Rajiv Bajaj highlighted the
problem arising out of a lack of customer connection: “People need to know where [the product] comes
from. . . . Bajaj is the business-to-business brand . . . it’s the employees’ brand, it’s the dealer’s brand, it’s
the supplier’s brand, it’s a shareholders’ brand, it’s the banker’s brand . . . but it is not a customer’s
brand.” He illustrated his point with the following example: “In some parts of Latin America, we created
the sports category through Pulsar, and we enjoyed a market share for many years of 50 per cent plus . . .
but the [consumers preferred] Yamaha. So, if Yamaha launches a [similar product], it starts to shake us,
despite our being the creators of the category.”
The company had two main product lines: motorcycles (2Ws) and CVs (mainly 3Ws). In the 2W
category, BAL’s legacy dated back to the iconic Bajaj Chetak, one of India’s first indigenously
manufactured scooters. However, by 2006, BAL was cutting down the production of Chetak scooters,
and, by 2009, it had stopped producing scooters altogether.
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The market had by that time shifted to motorcycles. As the creative head of Lowe Lintas, R. Balki, noted,
“There was a time for the horse carriage, but now is the time for motorcycles.”2 Balki had previously
coined Chetak’s iconic tag line “Bulandh bharat ki bulandh tasveer — Hamara Bajaj,” which translated to
“The elevated (or eminent) picture of the elevated Bharat (India) — Our Bajaj.”
BAL had achieved its goal with its Pulsar brand of motorcycles. By appealing to modern youth with more
relevant engineering, the Pulsar became the Chetak of the 2000s. This move had helped BAL keep up
with the times. BAL’s motorcycle brands were Avenger, Pulsar, Discover, Platina, and Ninja, with Pulsar
being the most awarded brand of all time. Pulsar and Discover had been India’s favourite motorcycles
since their launch and were featured in almost all “top 10” popularity listings.3 BAL produced more than
50 variants of motorcycles in three plants located at Chakan (near Pune, Maharashtra), Pantanagar
(Uttarakhand), and Waluj.
In the 3W category, the Bajaj RE, with variants in gas, diesel, and alternate fuel (liquefied petroleum gas
or compressed natural gas), was the largest selling 3W in the world. Early versions of 3W autorickshaws
had front engines, which made the vehicle hot, cramped, and uncomfortable for passengers and drivers.
BAL was the first to introduce the rear engine design in 3Ws, which was quickly accepted in the market.
“RE” was added to the Bajaj 3W to differentiate its vehicles from those of its competitors, which had
front engines. The RE was popular in this segment due to its superior performance and an entrenched
perception of “value for money,” both in Indian and international markets (see Exhibit 2). However, as far
as the brand was concerned, international division president Sharma pointed out the following:
When we come to the 3W, we don’t have a product brand, frankly speaking. This RE, I don’t
regard it as a brand. It has no equity, it is just two [letters] and it is an opportunity we missed out
on . . . . In India, Bajaj and 3W are synonymous, so you really don’t have to create a Bajaj 3W
brand. It’s basically because we have almost 86 per cent of the in-city segment.
Despite its dominant position, the CV division, with its RE 3W product line, had not made the shift to the
new generation like the 2W. Sharma explained, “I think the old [association] of Bajaj being value for
money is very much still there. The transformation from value for money to excitement that has taken
place in motorcycles has not happened in the 3W.” The CV division had come to represent some missed
opportunities for BAL.
Discussing the growth of the 3W division at BAL, Maheshwari recollected that while BAL had been the
leader in the 3W market for a long time, at the time of his joining BAL, there appeared to be no new
growth opportunities. A primary reason for this was the permit system prevalent in India. Commercial
vehicles required permits; thus, “the controlled” or “almost closed permit” system imposed by state
governments in urban areas was dragging down growth opportunities.4 At BAL, Maheshwari had even
formed a new department for permits to manage negotiations with the state governments to increase the
number of permits in cities. Some of these efforts culminated in three states (Tamil Nadu, Gujarat, and
Karnataka), opening up the permit system for urban areas.
Many states followed a middle path — a controlled permit system — wherein permits were issued in
restricted numbers at regular intervals. In 2013, it was estimated that 48 per cent of the 2.2 million 3Ws in
India were operated in cities with rigid permit systems and 34 per cent were in cities with open systems.
To improve the market performance of the 3W category, BAL identified two key areas of focus: product
improvements (replacing the two-stroke engine with a better performing, more eco-friendly four-stroke
engine) and market expansion (increasing focus on international markets across the world, such as Sri
Lanka, Bangladesh, Africa, and Latin America). The result was that BAL launched its products in several
countries worldwide. The BAL autorickshaw was well loved and became known as the tuk-tuk in Egypt,
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the keke in Nigeria, the pikipiki in Kenya, and the torito in Peru — yet there was hardly any awareness of
“Bajaj” as a brand.
THE 3W MARKET IN INDIA
Between 2006 and 2013, the 3W population in rural India grew from 0.5 million to 1.93 million;
however, the growth in the total number of 3Ws had stagnated in urban areas, with a cumulative growth
of only 3 per cent compounded annual growth rate (CAGR) in the same period. In such an environment,
original equipment manufacturers (OEMs) had no incentive to launch newly designed 3W vehicles. Yet
the goods carrier/small CV segment in rural India had been witnessing a shift from 3W passenger vehicles
to goods transport and 4W vehicles. Vehicles such as the Piaggio Apé, Tata Magic, and Tata Ace catered
to this segment.5 Urban passengers, however, had only two commute options among CVs: autorickshaws
or taxis. The 3W autorickshaw segment accounted for more than 90 per cent of the urban public service
CV category in urban areas.
Maheshwari estimated that at BAL, about 80 per cent of autorickshaw sales came from the replacement
market and only about 20 per cent came from additional permits issued in the market. One part of the
replacement market was composed of consumers who drove 3Ws and wanted to replace their old vehicle
with a new one. The Bajaj RE was largely preferred by first-time 3W operators for its low mileage and
maintenance costs. Some of these consumers would subsequently shift to the Apé City to accommodate
more passengers or to the Apé Xtra for better performance and better resale value; others would switch to
an RE diesel vehicle for better fuel efficiency and pick-up. From the available choices among a few
brands with very little value addition, there was limited scope to upgrade in the 3W market. Due to
stagnancy in product innovation and development, 3W operators in the replacement market stopped
driving 3Ws for commercial purposes. There was a large gap between the 3W and 4W taxis (see Exhibit
3). Despite the apparent stagnancy of the 3W market, there were two noteworthy trends:
 The cost of permits in cities:6 The control on permits caused an imbalance in demand and supply,
which led to the selling of permits as assets and the emergence of a broker/financial nexus. The
paucity of permits in cities had created a black market, where permits were either sold or rented
illegally.7 In most cities, over half of the 3Ws were operated by renter-drivers who were supported by
financiers and brokers, and the remaining vehicles were operated by owner-drivers. The existence of
a black market for permits indicated a lucrative demand for such transport facilities in urban areas.8
 Shortage of urban public transportation systems and consequent urban mobility crisis: According to
a 2010 McKinsey & Company report,9 India’s urban population was expected to increase from 340
million in 2008 to 590 million in 2030. Given that the number of total daily passenger trips in 87
major Indian cities was anticipated to double from 229 million in 2007 to 482 million in 2031, a
holistic, sustainable urban transportation system was critical. Three broad modes of urban transport
could be identified in the Indian market: personal transport (2W or 4W), public transport (buses and
trains), and intermediate public transport (IPT), which included autorickshaws.10
India’s public transportation system was heavily dependent on IPTs due to the low penetration of personal
vehicles (less than 6 per cent for 2Ws and less than 2 per cent for cars and utility vehicles), weak
infrastructure (only three of India’s 42 metropolitan cities had a mass transit system), and population spread
(1.26 billion people divided among 640 districts, 5,800 administrative divisions, and 600,000 villages).
The shortage of public transportation and the Indian government’s lack of interest in encouraging its use
left commuters with little alternative but to use private vehicles, which in turn led to greater congestion
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and pollution and the need for wider roads and more parking space. In addition to the widespread ill effects of
a growing number of vehicles on the road, the average speed of traffic was expected to drop from 19.5
kilometres (km) per hour to 7.5 km per hour.11 Under these conditions, it was more profitable for CV operators
to run smaller vehicles (such as 3W autorickshaws) than larger vehicles (such as buses) (see Exhibit 4).
For consumers with no access to public transportation or their own vehicles, IPT was an attractive
alternative. According to a World Resources Institute policy brief on sustainable urban transport in India,
the market size of 3W autorickshaws ranged from 15,000 to 30,000 in Tier 2 cities (i.e., those having a
population between 1 million and 4 million) to more than 50,000 in Tier 1 cities (i.e., those with a
population of over 4 million).12 In urban areas, autorickshaws accounted for 91 per cent of the 2.4 million
IPTs on the roads.
Mode-share13 analysis from select cities showed that autorickshaws constituted 2 to 11 per cent of the
total number of vehicles but accounted for a relatively higher mode share of 10 to 20 per cent. They
served a vast range of needs in cities, providing transport to work, education, shopping, health care, and
recreation destinations, mostly over short distances; for instance, more than 70 per cent of the passengers
in Mumbai, Pune, and Bangalore travelled less than five km during each trip in an autorickshaw. In
Mumbai and Delhi, autorickshaws provided last-mile connectivity around mass transport systems such as
buses and trains. In Tier 2 cities, autorickshaws were virtually the only means of public transport.
Despite the public’s widespread dependence on 3W autorickshaws, these vehicles were plagued by
negative perceptions among dealers, commuters, and drivers. Autorickshaws were blamed for a range of
traffic problems, such as congestion, accidents, and pollution, as well as overcharging and poor service.
These negative perceptions were, in some ways, responsible for the rigid permit systems adopted by the
regional transport authorities.14 Only its ubiquitous use in urban transportation had saved the autorickshaw
from a complete ban by the authorities. Three-wheelers were the most cost-effective means of commercial
transport for operators in urban areas if passengers required last-mile connectivity, did not travel in groups, and
were not willing to pay more than US$0.15 per km.15 Despite the low revenue rate of 3Ws, their
correspondingly low acquisition and running costs ensured that operators earned $250 to $330 per month.16
Given public perceptions on traffic and emission standards, the economics of autorickshaws, and the
expectations of transport authorities, the burden fell on automobile OEMs to deliver the right kind of
products to mitigate the shortage of urban mobility options in India.
THE AUTOMOBILE INDUSTRY IN INDIA
The Indian automobile industry could be broadly divided into two segments: commercial vehicles and
personal vehicles (PVs). Two-wheelers (i.e., motorcycles, geared or ungeared scooters, and mopeds) and
passenger cars led the PV category, whereas 3Ws, commercial vehicles (light, medium and heavy), utility
vehicles (UVs), and tractors dominated the CV category.17
In 2013, the turnover of the Indian passenger car segment was about $55 billion, making India the sixth-
largest producer in the world. However, sales of passenger cars dropped by 6.7 per cent during 2013 (for
the first time in a decade) to 1.9 million units. Despite a vehicle density of around 22.5 (per 1,000
population) and vehicle sales of 2.73 (per 1,000 population), India fell far behind other emerging markets.
Among the chief reasons for the poor sales were rising fuel prices, a depreciating rupee, and high interest
rates, which in turn resulted in increased vehicle financing costs.18
India was a preferred automobile manufacturing hub for global car manufacturers due to its low
manufacturing costs. The launch of Tata Motors’ Nano, an ultra-low-cost car (ULCC), generated much
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interest among Indian automobile makers in the low-cost car (LCC) segment. It was estimated that
between 2010 and 2020, the ULCC and LCC market in India would grow at a CAGR of approximately 25
per cent. The industry believed that ULCCs and LCCs would be attractive to consumers in rural areas and
Tier 2 cities, whose per capita income and affluence was lower than consumers in large cities. There was an
impetus to demand for LCCs from the increasing number of young working-class families in Tier 2 cities.
By 2013, there were five cars in the market that each cost under $4,980: Tata Nano ($3,500 to $4500),
Maruti Suzuki 800 ($3,850 to $4,300), Maruti Suzuki Omni ($3,950 to $4,600), Maruti Suzuki Alto 800
($4,800), and Hyundai Eon ($4,980). The Tata Nano was launched as an indigenous solution to satisfying
India’s need for 4W ownership, but it had not achieved the expected success.19 Borrowing from the Tata
Nano experience, manufacturers of low-margin cars started investing in local production to cut costs and
expanded volumes with exports.
In 2008, business news media reported on a partnership between BAL and Renault-Nissan to launch a
ULCC at an approximate cost of $2,500 to $3,000 and speculated that it would be pitted against the Tata
Nano. These reports indicated that BAL would handle design, engineering and manufacturing, and
provide supply base expertise for the ULCC, while Renault-Nissan would be in charge of branding,
marketing, and selling. However, in 2012, the partnership was cancelled. Renault-Nissan decided to
launch its Datsun brand in India and unveiled the Datsun GO in 2014, at a starting price of $5,175. At the
same time, BAL unveiled the RE60, a “quadricycle,” which was an upgrade from the 3W and much
cheaper than a car (see Exhibits 5 and 6).
BAL had, in fact, initiated three projects: a ULCC to gain a foothold in that category, an upgrade of the
existing 3W,20 and a next generation 3W to expand and protect its current market segment. During the
course of the discussions with Renault-Nissan on the ULCC, the BAL team came to realize that there
were major challenges in terms of commercial viability as well as branding in this segment. As the team
members explored the possibility further, they became increasingly convinced that a small car was
unviable given the Indian public transport system and even went so far as to declare themselves an “anti-
car” company. Meanwhile, BAL completed its second project of upgrading the 3W, which it called the
“face-lift” project, and the new version of the RE autorickshaw was launched in domestic and international
markets. With its third project, BAL took a fresh look at how it could use its core competencies to bring out a
next generation product that would cater to the intermediate public transport space.
THE BAJAJ RE60 QUADRICYCLE
When you take your 3,500-pound car to the market for a loaf of bread, think about what’s going
on. That’s 3,500 pounds of hardware being hauled to the store and back, consuming lots of
energy and spewing lots of pollutants into the air, just to get a one-pound loaf of bread from the
market to the kitchen table. I think there is a better way to do it. In fact, I’ll bet my nine-year-old
granddaughter could think of a better way to do it.
– Robert Q. Riley, Founder of Robert Q. Riley Enterprises21
BAL’s next generation 3W project was an initiative aimed at developing a completely new product with a
modern look. It occurred to BAL that a fourth wheel could be added to the 3W to develop a four-wheeled
autorickshaw in the manner of a quadricycle. In the initial product prototype discussions, it was called the
Husky 300 and Husky 500 and conceived as a 4W quadricycle that weighed almost 700 kilograms (kg).
However, as Maheshwari recalled, these prototypes were abandoned at the idea or research stage because
cost and price were not competitive.
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When BAL began developing its 4W vehicle, the quadricycle had already existed in Europe for a few
decades, but with advanced material engineering. When choosing a template to follow for the introduction
of this new concept into the market, BAL decided to use the specifications of the European models. It
took on the challenge of making a 4W within the specifications of the European quadricycle, using
available material engineering in India. Maheshwari recalled:
There was no category of this kind in India, and we had anticipated that to get it through government
and other automobile manufacturers would be a Herculean task. If we succeeded, this could become
an additional offering in first- and last-mile connectivity, and we might be able to export to those
countries where we were offering 3Ws, even if we did not get approval to sell in India.
In its approach to the product, the team at BAL had decided that it should add value to the consumer from
a commercial viability perspective, not from a personal ownership perspective. It was to be divested of
the emotional attachment that came with the possession and ownership of a vehicle. This vehicle would
be a rational economic value choice for urban transportation. The team members had asked themselves: If
a person wanted to travel a short distance from point A to point B within a city, what would be the most
efficient way to travel? They rationalized that a car weighing 660 kg or more used only 10 per cent of its
potential to complete its task and yet consumed more energy and engine power than was needed. They
embarked on a project to “rightsize” a 4W that could eventually replace the 3W when the time was right.
What commuters needed was a public commercial vehicle that would safely transport them to their
destinations as efficiently as possible. The BAL team felt that the market was changing, and new needs
for public commercial vehicles were emerging (see Exhibit 7).
From BAL’s research, the team found that the two most important attributes that would be required by the
new product for facilitating urban mobility were fuel efficiency and speed (see Exhibit 7). The research
indicated that drivers of taxis and 3Ws bought these vehicles mainly for their “earning potential”; hence,
the key criteria for decision making were on-road price, fuel cost, and maintenance costs. The other
important attributes related to the use of the asset, such as ease of repair, cost of ownership, performance
(load carrying), and quality (breakdowns). The softer aspects of comfort (e.g., noise and vibration), brand,
and status were also relevant. BAL’s chief technology officer, Joseph, had pointed out that speed was
irrelevant in intra-city travel given that, on average, a car on India’s urban roads carried 1.7 people at 25
km per hour. Hence, very high speeds and powerful engines were not a requirement for the urban
commuter. However, fuel efficiency and low carbon emissions were important considering the high levels
of pollution and cost of fuel, which would increase both the economic and environmental cost of travel
for the urban commuter.
Therefore, the BAL team members decided that the dominant goals for developing the vehicle were
optimum speed, high fuel efficiency, and low emissions. To achieve this, they had to reduce weight,
optimize speed, and lower the cubic capacity of the engine. The challenge in keeping fuel efficiency high
was to keep the weight and mass of the vehicle to less than 400 kg. Even the smallest 4W vehicle in the
European markets weighed 600 kg and was made of aluminum, which increased the cost of the vehicle
substantially.22 BAL aimed to make a 4W vehicle for intra-city transport that could carry up to four
people and travel at a reasonable speed while achieving high fuel efficiency and staying within emission
norms.23
Road safety was another major concern for vehicle manufacturers. The autorickshaw’s unique three-
wheel design and slower speeds made it particularly safe for pedestrians.24 Explaining the need to
optimize the speed of the RE60 while ensuring pedestrian safety and fuel efficiency, Joseph said, “Safety
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issues became rampant only with [the introduction of] multiple types of vehicles with different potential
speeds travelling on the same roads.”
The RE60 was built to be environmentally friendly. The BAL team was sensitive to the fact that air
pollution was one of the prime contributors to environmental degradation. In India alone, over 100,000
people had died prematurely due to air pollution annually. The fact that 75 per cent25 of the pollution in a
typical Indian city was caused by private vehicles was alarming, and the team decided that it was time to
do something about it. Comparing the green quotient of the RE60 to other hybrid cars that claimed to be
environmentally friendly because they used electricity,26 Joseph argued that a hybrid car “did not make as
much sense as a clean vehicle since 80 per cent of the electricity used by [a hybrid] comes from coal
anyway.” The BAL team felt that what India needed was a simple, effective, and immediate solution to
curb emissions. It believed that the RE60, with carbon dioxide emissions of just 60 grams per km, was a
great choice for combatting pollution in India.
The team had adopted its homegrown philosophy from homeopathic medicine and called it “Brandpill.”
In homeopathy, diagnosis involved a systematic method of getting to the root of a problem rather than
merely addressing the symptoms. The team at BAL had similarly analyzed the root causes of the urban
mobility problem and the lack of options for the urban commuter and built the RE60 to solve these
problems. Joseph explained BAL’s philosophy: “We built a much smarter three-wheeler. It is not that we
cannot build a car, but we did not want to be the 14th company making another small, low-cost car. We
do business for profits, and, hence, we do not want to build a product for the sake of proving a point.”
Maheshwari gave a lot of thought to the question of whether the product made business sense for
commercial vehicle operators. There was a wide gap between the fares of 3Ws (approximately ₹10 per
km) and taxis (₹17 per km)27 (see Exhibit 4). He felt there was scope for a new product offering
somewhere between these two services that operators could benefit from. Also, there was a certain stigma
attached to being an autorickshaw operator that could be addressed by a suave 4W. Maheshwari also
believed that the RE60 might find a foothold in cities such as Jalandhar, Faridabad, and Ludhiana (in the
state of Punjab), where there were no autorickshaws, as well as in places such as airports and hotels,
where autorickshaws were not allowed to operate. There were several such niche areas where the
autorickshaw had not penetrated and where a car was overkill for the job. Surely the RE60 could find and
enter these spaces before it became a popular mode of transport, Maheshwari reasoned.
Some of BAL’s stakeholders had asked whether the RE60 was intended to do essentially the same things
as a 3W, and Bajaj’s response was, “We wanted this to be a smarter version of the 3W. It is much more
practical. That’s why when you look at it, it’s not meant to win any beauty contests.” The BAL team was
hoping that the RE60 would do for the CV division what motorcycles had done for the 2W division.
Response to the RE60
When the government issued the draft notification to make the quadricycle a new category of vehicles in
2013, reactions were intense, and OEMs soon divided into two camps. Companies with a “top-down”
approach saw quadricycles as a downgrade from the car, while companies with a “bottom-up” approach
saw it as an upgrade over the autorickshaw.28
When the RE60 was unveiled at the Auto Expo 2012,29 Joseph recalled that the auto industry had largely
mocked BAL’s efforts to build a 4W, stating that the company had simply added a fourth wheel to the
autorickshaw. However, at the time of the RE60’s imminent launch in 2013, Tata Motors had vehemently
opposed it, citing pollution norms as an issue. Similarly, TVS Motors had opposed it on safety grounds.
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TVS Motors’ Venu Srinivasan had, in fact, quoted Bajaj’s objection to the quadricycle when Maruti
Suzuki had first proposed the product a few years earlier.30 Joseph pointed out that the quadricycle
proposed by Maruti weighed more than 700 kg and did not adhere to the pollution and safety norms of the
segment. Contrastingly, the RE60 could reduce the country’s fuel bill and increase fuel efficiency at only
half the carbon dioxide emissions of a car. The managing director of Tata Motors asserted that since no
crash tests were required for quadricycles, it was difficult to assess its safety levels.31 Joseph countered
this charge with the argument that vehicles such as the Maruti Omni, or even the Tata Magic and Ace, did
not require crash tests but were allowed even on highways (see Exhibit 8).
Once the government gave the green light to launch the vehicle, BAL’s Indian competitors began seeking
a delay so that they could develop their own products. Rajiv Bajaj responded to these delaying tactics
with the following retort: “Why should there be a level playing field in a competitive environment? It is a
free market. We have invested money and spent four to five years in developing the RE60. Why have
others been complacent?”32 He further suggested that the competition was perhaps apprehensive that the
product might have appreciable traction in the market, thereby supporting the legitimate need for it.
Maheshwari felt that the existence of such powerful enemies (even before the product’s launch)
vindicated the RE60’s existence and its genuine differentiation with respect to other brands in the market.
The vehement opposition to the RE60 from both commercial vehicle manufacturers and car makers
repeatedly raised the issue of how the product fit into the existing market structure — was it an upgrade
on the 3W autorickshaw or was it a downgrade from a car? The BAL team realized the importance of a
clear branding and communication strategy to ensure that the customer understood the value proposition
of this innovative product.
While BAL’s 2W brands had been instrumental in portraying the company as vibrant and exciting, its CV
brands had been a drag on its image. The fundamental belief system at BAL was to differentiate to stay
ahead of the competition. Yet its three-pillar value system for staying “distinctly ahead” through speed,
perfection, and innovation had not been transferred to the image of its CV-3W brands. Nevertheless, the
CV division was a market leader and quite profitable for the company.
Soon after Maheshwari had joined BAL, the company had begun revamping its CV division. In 2009,
BAL employed the services of a research agency (KISKA) to do an in-depth study of Bajaj’s CV brands.
The study indicated that the focus of the CV brands had been rudimentary product benefits, such as noise,
vibrations, comfort, and so on. Based on this research, BAL had implemented various product upgrades
and new product development strategies. Now the team had to decide how to develop the CV brands
nationally and internationally on stronger and more relevant distinctions. The company had several brands
and product categories with which to work out the synergies: the Bajaj mother brand, the motorcycle
brands, the RE 3W, and the newest entrant, the RE60 quadricycle.
The RE60 Quandary: How to Position and Brand the Disruptive Innovation?
In December 2011, Rajiv Bajaj addressed his team regarding the positioning of the RE60 (then called the
RE43). 33 He wrote in an email:
So far, the RE used to “show the way” to affordable transportation for its passenger and to
provide livelihood for its owners. Now it has evolved to do all that even better by showing the
way to a much better automotive world. Thus, I think “show the way” could be an effective and
endearing positioning option for the RE brand. Let’s keep this in mind as we go ahead.
Alternatively, if that’s thought to be too sophisticated/over the top, we can consider the classic
leadership positioning of “the world’s favourite autorickshaw.” It’s like British Airways: “The
Page 10 9B16A014
world’s favourite airline,” the credibility of which lays in the fact that British Airways carried
more passengers every year than any other airline.
In a later email in November 2012, while the team was in the midst of discussions on developing the
quadricycle and simultaneously deliberating branding issues, Bajaj wrote:
Let’s consider our motorcycle division. We have two strong brands: Pulsar and Discover. At the
back end they have much in common, but at the front end they are positioned in distinct attributes
of power and mileage. Consequently, they belong to the distinct groups of sports and commuting.
Now, coming to our CV business, we need to be sure that despite a common back end, the RE
and RE6034 represent distinct attributes and categories at the front end.
Based on his discussions with several stakeholders, the market response and the evolving new category
for the product, which now had a working title of RE60, Maheshwari noted in his email response:
I do not see much similarity [between the RE-3W and the RE60], excepting that the roots are the
same. The sensibilities, look, feel, [and] prestige that the 4W addresses are evolutionary
compared to the 3W. Going forward, there may be a similarity with cars in city travel, and more
competitors may come up with city cars. There would be a natural death for the 3W due to
improved economic conditions and affordability, but it is too early to comment on the time period
of this event. The RE60 must be a different brand than the RE [because] the RE is a 3W, and,
going forward, 3Ws and 4Ws in this segment will converge further. We, as engineers, think a
fourth wheel is a small change, but what is important is the perception created in the mind of the
consumer. We would have sealed our fate forever if we had called our Pulsar motorcycle
“Chetak” motorcycles. [I] am of the opinion that we must have a new brand for the RE60. The
vehicle category that is being created by the government will help establish the brand.
As the team’s thoughts on branding evolved in 2013, its discussions started hovering around the mother
brand itself and what value it lent to the various brands. The team wondered whether the CV brand was
“Bajaj” or whether there should be individual brands, such as Compact, Optima, Maxima, and the Quad
(for the RE60). Maheshwari explained:
In the classic sense, do we have three categories in the 3W space? My answer is no. In the Pulsar
brand, we have more than one product and define them as “150,” “180,” and “220.” Similarly, in
the 3W space, we have three products . . . Compact, Optima, and Maxima. Does the RE need
endorsement today? Yes. However, in this case, if it confuses the customer, then let’s promote the
RE independently of Bajaj. As we have discussed, we feel RE60 is a new category, and it may
need endorsement from Bajaj to begin with [before it] can become independent like Pulsar,
Discover, etc. An individual position has to be figured out for each of the RE brands though.
Rajiv Bajaj then laid out the issue more clearly:
We must carefully consider the pros and cons of disconnecting it [RE60] from RE. More than 80
per cent of [RE] business comes from commercial use, and, hence, it may not be an advantage for
[the RE60] to remain connected with RE, but the connection may enhance the RE brand and
expand its relevance for personal use, as in Sri Lanka.
We must also anticipate the entry of car makers like Maruti, Hyundai, Fiat, Renault, etc., besides
the Tatas and Mahindras in this space. Furthermore, disconnecting the RE60 from [the RE brand]
means that Bajaj will get permanently attached to the brand (whatever name we choose), but if
we start now as RE Compact, Optima, Maxima/Quad, or some suitable name at the right time, we
can withdraw the Bajaj name. The Bajaj name will not appear on the product, but on the owner’s
Page 11 9B16A014
manual and as “brought to you by” in commercials and media statements. . . . Alternatively,
another positioning idea for the RE60 might be, “It’s bigger than you think,” which can be used
for all RE 3Ws and 4Ws because we are small but still big on emissions, efficiency, safety,
convenience, and affordability.
In further discussions on how division brands could use the Bajaj mother brand, the team considered the
idea of Bajaj as a “global motorcycle powerhouse.” The team members felt that it was sharp and
appropriately reflected the company’s ambition. Maheshwari pointed out:
BAL owns both the Bajaj [brand and] the RE brand, but RE, a small vehicle specialist, cannot co-
exist with the motorcycle powerhouse image, as they are contradictory and dilute both images. . . .
My recommendation is for two CV-RE brands to continue for 3Ws and a new brand for the new
category of 4W.
However, Rajiv Bajaj reasoned:
Bajaj is essentially a motorcycle company that also makes 3Ws. If you are a motorcycle company
that makes [several different vehicles] then there is a problem, but if you are a motorcycle
company that makes light vehicles, let’s say that’s fine as long as that does not hijack the centre.
He then asked the team to determine the brand architecture (including the associations of Bajaj, the CV
division, and its various products) that would best further the branding strategy and suggested thinking
about branding from the customer’s perspective. Bajaj said, “Whether the RE is an asset or liability for the
RE60 should be discussed with expected customers in mind because the positive and negative perceptions that
we have to manage [regarding] the RE60’s technology/quality/cost are with respect to those customers.”
Adding to this discussion, Maheshwari observed:
The RE brands seek entrepreneurs who want to make a living. . . . Those with a conservative,
family-oriented, steady, herd mentality sort of personality, who are expecting reasonable
earnings, will go for a 3W, whereas those with a personality characterized by ambition, tech
savviness/modernity, valuing status, and risk taking may go for an RE60. Thus, if [consumers]
wish to have status . . . and earn more, they will aspire to the RE60; those who change over from
a 3W to Tata Ace are an example.
WHICH WAY FORWARD?
The team now had to decide whether the RE60 quadricycle was more viable as an extension of the RE
brand or whether it should be marketed as a completely new brand from the CV division of BAL. How
should the company endorse the new brand? How would clarity on brand architecture help drive the
direction of the product and brand strategy? Could the two different brands from BAL be offered to the
same customer segments even though the benefits were clearly different? Should the CV division itself be
repositioned in light of the new product offering? The team wondered what strategies would persuade
customers that the new quadricycle was indeed the product they were waiting for, allowing BAL to take
the lead as a manufacturer of next generation intra-city vehicles.
Page 12 9B16A014
EXHIBIT 1: SALES VOLUME OF 3WS AT BAL (IN ₹)
Source: Company materials.
EXHIBIT 2: COMPARISONS OF ATTRIBUTES OF BRANDS
Interface Brand User’s Image Product Attributes

 Lower cost of upkeep
Bajaj RE Easy to run and earn  Ease of maintenance
 Fuel-efficient
 Pride of owning a 4W
Tata Ace Trust  Fit for purpose (“baby elephant”)
 Reliability and durability
 Overloading ability
 Durability
Mahindra Alpha Rugged
 Reliable
 Low maintenance cost
 Consistent
Piaggio Apé Dependable  Fuel efficient
 Strong body
EXHIBIT 3: PUBLIC TRANSPORT OPTIONS AND THE RE60
Autorickshaw
Trains Metro Buses 3W Taxi/Cabs
US$/
km
0 0.008 0.017 0.025 0.033 0.149 0.158 0.166 0.174 0.182 0.191 0.199 0.207 0.216 0.224 0.232 0.240 0.249
Page 13 9B16A014
EXHIBIT 4: COSTS AND REVENUES ACROSS SMALL VEHICLES
Autorickshaw 4W — Magic or Iris 4W Cars (e.g., Santro) RE60

On-Road Price (in $) 2,487.90 4,146.60 5,307.60 3,109.90
Running (km/day) 140 140 140 140
Revenue ($/km) 0.12 0.13 0.17 0.15
Running Cost on CNG (in $) 0.03 0.04 0.05 0.03
CNG Mileage ($/kg) 0.50 0.36 0.30 0.45
Gross Profit ($/km) 0.10 0.09 0.08 0.12
Gross Profit ($/month) 406.4 364.2 329 498
Other Expenses ($/month) 49.8 82.9 99.5 82.9
Income ($/month) 356.6 281.2 229.4 415
EMI (First Three Years) (in $) 91.4 134.9 165.6 114.3
Income Post-EMI (in $) 265.2 146.3 63.9 300.8
Notes: $ = US$; km = kilometre; CNG = compressed natural gas; kg = kilogram; EMI = equated monthly instalment.
Source: I-Sec Special Report for Equity Research, January 3, 2014. Company sources.
EXHIBIT 5: THE BAJAJ RE60 AND THE 3-WHEELER AUTORICKSHAW
FEATURE RE 60 3-WHEELER
Under 250 cubic centimetre (cc) CNG and
Engine 200 cc
LPG variants available*
Transmission 5 forward 1 reverse manual transmission 4 speed
Peak power Under 20 metric horsepower, or 9 PS
Pferdestärke (PS)
70 km per hour (by comparison, it was 65
Max speed limit 55 km per hour
km per hour for 3W)
Under 450 kg, with an additional 60 kg if
Curb weight 340 kg for 3W petrol
CNG is used
Seating capacity Driver + 3 Driver + 3
Length 2,752 millimetres (mm) 2,625 mm
Width 1,312 mm 1,300 mm
Height 1,650 mm 1,710 mm
Image
* CNG = compressed natural gas; LPG = liquefied petroleum gas.

Page 14 9B16A014
EXHIBIT 6: BUILDING THE RE60
The biggest challenges that the team members faced in building this product were providing the safety
features of a car and mitigating the negative aspects of the three-wheeler. They had to improve the
product by introducing superior features, without increasing the weight of the vehicle or its costs in terms
of price and maintenance. They achieved this through indigenous material engineering, where they built
the product with high-strength steel with low mass (0.6 millimetres (mm) contrasted to 0.9 to 1 mm
normally used in three-wheelers), which was specifically developed for the purpose, and soft but high-
strength plastic in parts such as the hood and the doors, which also enhanced safety.
They also wanted the vehicle to move with the speed of traffic, neither slower nor faster than required.
Hence, they improved the engine by adding four valves per cylinder and using water coolant instead of air
coolant. They used aluminum instead of cast iron to reduce the weight of the engine. This was done such
that maximum output could be extracted from the minimum mass of the small aluminum engine, making it
a much lighter and super-efficient engine. The fourth wheel reduced the rolling of the vehicle and
increased its stability. Seatbelts were added as safety features and the vehicle was designed for
maximum visibility. The fuel efficiency of the vehicle was 35 km per litre and it had a maximum speed of
70 km per hour. Bajaj Auto spent three and a half years developing the RE60, which conformed to
European quadricycle standards. It also designed the platform in such a way that a van-like vehicle could
be built on the same platform with various fuel options, such as diesel and compressed natural gas, and it
included an electric powertrain for developed markets in the future.
Joseph stated:
Thinking from the ground up, we found that we had to address the issue of weight and speed. We
solved those problems using the specifications available for quadricycles, in case we needed to fit
into a new category in the Indian market. Earlier quadricycles in Europe had a maximum weight
of 400 kg and no speed limit norms. The new regulations enforceable from 2016 have stipulated
a maximum weight of 450 kg, 50 kilowatts of power and a maximum speed of 90 km per hour. We
built a vehicle that was about 400 kg — just 100 kg more than the 3W — that could travel at a
maximum speed of 70 km per hour.
EXHIBIT 7: COMPARISON OF VARIOUS MODES OF IMPORTANT URBAN TRANSPORT

PARAMETERS
Conventional Electric
Mobility Types Bicycle Motorcycle Hybrid Car RE60
Automobile Car
Efficiency and      
Emission
Driving Range      
Top Speed      
Occupant      
Safety
Safety to Others      
on Road
Utility and      
Functionality
Carbon      
Footprint
Page 15 9B16A014
EXHIBIT 8: COMPARISON OF FEATURES AGAINST SMALL CARS
Specifications Tata Nano Maruti Suzuki 800 Bajaj RE60

624 cc, two cylinder, MPFI Four stroke cycle, 796 cc Digital twin spark
Engine
engine water cooled SOHC engine Tech 200 cc engine
Power 37 bhp at 5,500 rpm 37 bhp at 5,000 rpm 20 bhp
Torque 51 Nm at 4,000–4,500 rpm 59 Nm at 2,500 rpm NA
180 mm diameter drum Front disc brakes, rear drum Front disc brakes and
Brakes
brakes (front and rear) brakes rear drum brakes
Turning Cycle 4m 4.4 m 3.5 m
Seating
4 5 4
Capacity
Kerb Weight 600–635 kg 665 kg 400 kg
Top Speed 105 km/hr 144 km/hr 70 km/hr
Notes:
MPFI – Multipoint fuel injection
SOHC – Single overhead camshaft
bhp – Brake horsepower
rpm – Revolutions per minute
Nm – Newton metre (a unit of torque)
m – metre
Source: “Bajaj RE60 New Ultra Cheap Small Car,” Kereta.info, Malaysia Car Magazine, accessed May 27, 2015, January 4,
2012, http://kereta.info/bajaj-re60-new-ultra-cheap-small-car/.
Page 16 9B16A014
ENDNOTES
1
Quadricyle refers to any vehicle with four wheels.
2
C. P. Chauhan, “Bajaj to Stop Scooter Production, Focus on Motorcycles,” December 10, 2009, The Economic Times, accessed
May 26, 2015, http://articles.economictimes.indiatimes.com/2009-12-10/news/27660662_1_rahul-bajaj-scooter-production-bajaj-
auto.
3
“Top 10 Most Popular Bikes in India,” Rediff.com, May 31, 2012, accessed May 26, 2015, www.rediff.com/getahead/slide-
show/slide-show-1-biking-and-motoring-top-10-most-popular-bikes-in-india/20120531.htm#10; “Popular Bikes in India,” Bike
Dekho.com, accessed May 26, 2015, www.bikedekho.com/most-popular-bikes.html.
4
Although rural areas in various states had an open permit system for public service commercial vehicles, urban areas had
controlled or closed permit systems. A permit refered to the government requirement of a licence for running an autorickshaw in the
given geographic area. An autorickshaw running without a permit was considered illegal, and the permit system was used to control
the number of autorickshaws on the roads. For example, until 2010, the Southern Indian state of Tamil Nadu had completely
stopped issuing permits, but, in 2011, it ended the permit system entirely. Delhi had a restrictive permit system. This information is
based on company sources.
5
"Special Report on Quadricycles — Auto Sector Update," I-Sec report, published by ICICI Securities Limited for their Retail
Equity Research, January 3, 2014, p. 24.
6
Ibid, p. 25.
7
Although the cost of getting a permit from the government was $83, in cities such as Mumbai and Delhi, permits were
rented out by permit owners to drivers at $1,650 to $2,500 for three years. In Jaipur, a Tier 2 city, a permit cost
approximately $830, according to company information.
8
Renter-drivers either took an autorickshaw and its permit on rent or took the permit on rent for three years and the auto on
equated monthly installments. The financier earned an internal rate of return of around 16 per cent on the loan of the auto or
a rent of $7 to $8 per day on the auto plus the permit. Over and above these costs, a 3W operator could earn $230 to $315
per month, according to company information.
9
“India’s Urban Awakening: Building Inclusive Cities, Sustaining Economic Growth,” McKinsey Global Institute, April 2010,
www.mckinsey.com/global-themes/urbanization/urban-awakening-in-india, accessed March 18, 2016.
10
The IPT sector in cities consisted of contract carriages and informal public transport. This was further classified by the type of
vehicle that offers the transport service. Autorickshaws fall under the category of contract carriage services offered by motorized
3Ws.
11
“Study of Traffic and Transportation Policies and Strategies in Urban Areas in India: Final Report,” Ministry of Urban
Development, India.
12
A. Mani, M. Pai, and R. Aggarwal, “Sustainable Urban Transport in India: Role of the Auto-rickshaw Sector,” February 2012,
World Resources Institute, accessed May 27, 2015, www.wri.org/publication/sustainable-urban-transport-india.
13
Ibid; The World Resources Institute defined mode-share for a city as the average share of total daily trips occurring on
various transport modes: non-motorized transport (walking, cycling); public transport (bus, rail); intermediate public transport
(autorickshaw, taxi); and private transport (motorized two-wheeler, car). Mode share for a city could be defined for total trips
or for trips classified by trip purpose such as work, education, shopping, health care, recreation, and other social needs.
14
Regional regulatory bodies of the state government’s Department of Transportation. They were responsible for governing
the regulations on motor vehicles, including autorickshaws, in cities. The autorickshaws were regulated based on the
policies and provisions of the Motor Vehicles Act, 1988, the Central Motor Vehicles Rules, 1989, and State Motor Vehicles
Rules, 1989. Source: “About Us,” Transport India, accessed May 27, 2015,
http://transportindia.org/about_us_from_RTO.asp.
15
All currency amounts are in US$ unless otherwise specified.
16
“Special Report on Quadricycles — Auto Sector Update,” op. cit., p. 25.
17
“Automobiles Sector Analysis Report,” November 18, 2014, Equitymaster.com, accessed May 28, 2015,
www.equitymaster.com/research-it/sector-info/auto/Automobiles-Sector-Analysis-Report.asp.
18
“Automobiles: The Economic Outlook and Employment Situation,” August 2013, PWC, accessed March 18, 2016,
https://www.pwc.in/assets/pdfs/publications/2013/automobiles-the-economic-outlook-and-employment-situation.pdf.
19
The Tata Nano was the cheapest car in the world, selling at approximately $3,500. It aimed to provide an affordable four-wheeler
for small families wanting to travel together but whose only affordable vehicle ownership option was a motorbike, which could
accommodate only two people. The car, however, was dubbed as “the poor man’s vehicle” even before it was launched. Despite its
much celebrated launch in 2008, only about 250,000 units had been sold in the following five years. The poor reception of the car
led to a number of attempts at redesigning and repositioning. The company changed the positioning of the car from an “economical
car” to an “awesome car.” The target group for the car shifted to the urban population in the age group of 25 to 40. Tata Motors
redesigned the car to include more features for the European and United States markets.
20
The facelift project was meant to redesign the three-wheeler RE brand to make it more user friendly. For example, the
seating space in the front was redesigned to increase leg space, the engine was upgraded, headlights were added, and
other changes were made to make it as close to perfect in its current form.
21
R. Q. Riley, accessed November 4, 2015, www.rqriley.com/quotes.htm.
22
“Strategic Analysis of the European Microcars Market,” Frost & Sullivan, April 2011, (M55D-18), accessed March 18,
2016, www.marketresearch.com/product/sample-6417775.pdf.
23
The vehicle was built with a much thinner, light-weight, and high-strength steel especially manufactured for the RE60.
Page 17 9B16A014
24
An analysis of pedestrian safety from various modes by the World Resources Institute indicated that autorickshaws were
the second safest motorized mode of transport (second only to buses) in terms of pedestrian safety. A comparison of
fatalities and injury rates for occupants in autorickshaws was the lowest among cars, mass transit ways, buses, and autos.
Source: Mani, Pai and Aggarwal, op. cit.
25
“Deteriorating Air Quality a Study of Delhi,” Anumeha, accessed March 15, 2016, www.commoncause.in/deteriorating-air-
quality.html.
26
Bajaj Auto Ltd Website, www.bajajauto.com/bajajre/eco-friendly-RE60.html, accessed May 27, 2015.
27
₹= INR = Indian rupee; US$1 = ₹62 as of December 31, 2014.
28
“Special Report on Quadricycles — Auto Sector Update,” op. cit., p. 25.
29
B. Prabhakar, “Auto Expo 2012: How Bajaj Invented the Four-Wheeler RE60,” The Economic Times, January 8, 2012,
accessed May 27, 2015, http://articles.economictimes.indiatimes.com/2012-01-08/news/30602264_1_bajaj-auto-
motorcycles-and-three-wheelers-joseph.
30
L. Philip and K. Thakkar, “Tata Motors Hits Out at Move to Allow Quadricycles; Rajiv Bajaj Rubbishes Contention,” The
Economic Times, April 26, 2013, accessed May 27, 2015, http://articles.economictimes.indiatimes.com/2013-04-
26/news/38817988_1_rajiv-bajaj-quadricycle-re60.
31
D. K. Dash, “Auto Majors Want Govt to Delay ‘Quadracycle’ Introduction,” The Times of India, September 20, 2013,
accessed May 27, 2015, http://timesofindia.indiatimes.com/business/india-business/Auto-majors-want-govt-to-delay-
quadracycle-introduction/articleshow/22820527.cms.
32
“Quadricycles: Rivals Trying to Stifle Innovation, Says Rajiv Bajaj,” The Economic Times, June 13, 2013, accessed
November 4, 2015, http://articles.economictimes.indiatimes.com/2013-06-13/news/39952377_1_rajiv-bajaj-innovation-bajaj-auto.
33
Prototype model RE 43 stood for Rear Engine 4-wheel 3-wheeler.
34
Prototype Model RE43 was renamed RE60, which stood for Rear Engine 60 gram/km.

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BAJAJ RE60: THE BRANDING CHALLENGE OF DISRUPTIVE

Copyright © 2016, Richard Ivey School of Business Foundation Version: 2016-05-13

BAJAJ AUTO LTD. (BAL)

The Commercial Vehicle Division

BAL and Its Brands

THE 3W MARKET IN INDIA

THE AUTOMOBILE INDUSTRY IN INDIA

THE BAJAJ RE60 QUADRICYCLE

– Robert Q. Riley, Founder of Robert Q. Riley Enterprises21

Response to the RE60

However, Rajiv Bajaj reasoned:

Adding to this discussion, Maheshwari observed:

WHICH WAY FORWARD?

EXHIBIT 1: SALES VOLUME OF 3WS AT BAL (IN ₹)

Source: Company materials.

EXHIBIT 2: COMPARISONS OF ATTRIBUTES OF BRANDS

Interface Brand User’s Image Product Attributes

EXHIBIT 3: PUBLIC TRANSPORT OPTIONS AND THE RE60

Source: Company materials.

EXHIBIT 4: COSTS AND REVENUES ACROSS SMALL VEHICLES

Autorickshaw 4W — Magic or Iris 4W Cars (e.g., Santro) RE60

EXHIBIT 5: THE BAJAJ RE60 AND THE 3-WHEELER AUTORICKSHAW

* CNG = compressed natural gas; LPG = liquefied petroleum gas.

EXHIBIT 6: BUILDING THE RE60

Source: Company materials.

EXHIBIT 7: COMPARISON OF VARIOUS MODES OF IMPORTANT URBAN TRANSPORT

Source: Company materials.

EXHIBIT 8: COMPARISON OF FEATURES AGAINST SMALL CARS

Specifications Tata Nano Maruti Suzuki 800 Bajaj RE60

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