Message from Rajiv Bajaj, Jt. Managing Director, Bajaj Auto Ltd

Friends,

I am grateful to Deshnidhiji for his generosity in encouraging me to contribute to the FADA Journal. His gesture comes at a time when retail innovation is one of my priorities. This is because, as an external observer, I am unable to comprehend how the current business model of automobile dealerships could continue to be relevant in the future.

I would like to share with you my thoughts in this regard.

To me, a dealership appears to be an unsatisfactory physical convergence of distinct skills including, logistics, financing, post-sales care, etc. Our customers are increasingly moulding themselves into 'segments of one'. Given half a chance, they would love to specify their product in the greatest permissible detail. This emotional high may easily overwhelm the more rational considerations of price and resale value and any other such herd mentality considerations. And I wouldn't want to bet against their willingness to wait a few weeks for their personal set of wheels.

Imagine then, how our world would change if, we were joined by the Dell Motor Company. Dell Motor Sales would establish owned retail outlets all over the country. Smallish, but, excellently located and done up, customers would not ignore the opportunity to walk into 'see and believe'.

Friendly and versatile information technology solutions would start off presenting customers with the available product options and would lead them right through to the parameters that close the sale. Elegant and efficient Dell Motor Finance staff would close the inevitable gaps that arise out of any software's inability to anticipate every curiosity or to entertain any discount.

A passing glance at the singular gleaming service bay would pre-empt any post-sales concerns, although its actual usage would likely be limited to pre-delivery inspection alone. Convenient and personalised attention at spoke-end locations by virtue of Service Stations franchised by Dell Motor Service would eventually wean customers away from the hub.

Imagine, such a world.

The discerning customers define the product.

The savvy manufacturer sells (finances) it.

The enterprising engineer services it.

If, I were an auto dealer, I would not stake my existence in this world on the sole assumption that customers would need to 'touch and try' before they decide to 'choose and buy'.

▪	A dealership appears to be an unsatisfactory physical convergence of distinct Skills including, logistics, financing, post-sales care, etc.
▪	Customer are increasingly moulding themselves into 'segments of one', willing to wait a few weeks for their personal set of wheels.
▪	If, I were an auto dealer, I would not stake my existence in this world on the sole assumption that customers would need to 'touch and try' before they decide to 'choose and buy'.

The Dell Motor World appears to be great news for everyone but the existing incumbent who is locked into his current operating system and its corresponding cost structure. Does it possibly represent the black serpent Mr Seshasayee eloquently described in the March 2004 issue of FADA Journal? Or could it in fact be a stairway out of the well?

As surely as the world of automotive technology and manufacturing has changed, so will that of automotive selling.

It may be far too presumptuous on my part to hazard a picture of the future of automobile retailing. Yet, it is true that the goal of any organisation, yours or mine, is simply 'Profitable Growth'. And, to borrow yet again from Mr Seshasayee, Profitable Growth calls for scaleable differentiation.

Given the nature of the automotive business, dealerships have clearly limited elbowroom in creating product or price led differentiation. Perhaps, the greater opportunity lies as in the world of the Dell Motor Company, not just in the content of dealership services, but also in the structure of their delivery.

My ignorance of your industry prevents me from taking this thought any further. But, I could express myself implicitly by sharing with you some of the ideas that we have for ourselves at Bajaj.

Our goal is Profitable Growth.

Our approach is threefold:	Create Winning Products;
	Ensure Satisfied Customers;
	Engineer Lean Operations.

 
Winning Products are created by accurate customer segment led fit, by low cost innovation led differentiation from competition, and by an engineering led profitable cost structure for the shareholders.

What are a dealership's Winning Products (Services)?

Satisfied Customers are ensured through distinct initiatives that are aimed at meaningful events in the pre-sales, sales, and post-sales processes.

What are a dealership's customer satisfaction opportunities?

Lean operations are engineered by 'pull one' material flows, by 'preventive' processes, and by 'on-line, real time' information availability.

What are a dealership's operational 'Kaizens'?

There are issues that are best understood when we view them from a customers perspective: outside-in rather than inside-out.

I was once told: Don't defend the past; attack the future.

I have found that to be a great way to evaluate the relevance of the choices that we make in a moving world.

It has been wonderful to debate the future with you and I wish you all much luck.


Rajiv Bajaj

▪	As the world of automotive technology and manufacturing has changed, so will that of automotive selling.
▪	Greater opportunity lies not just in the content of dealership services, but also in the structure of their delivery.
▪	Issues are best understood when we view them from a customers perspective: outside-in rather than inside-out.
▪	Don't defend the past; attack the future.