Rahul Bajaj agrees to son Rajiv's 'magic of logic'

The Bajaj patriarch Rahul is finally veering around to dropping the family name as a brand for products saying son Rajiv is making the right moves.

Lauding Rajiv, who is the managing director of the firm while addressing shareholders in its annual report for 2009-10, Rahul said it pleased him that the company is leveraging its key brands to maximise profits.

"Your managing director often says that while products may generate market share, brands provide pricing power and create higher profits. I am increasingly tending to agree with him," the senior Bajaj wrote.

His comment is in contrast to the opinion he expressed earlier about the changes brought in by his son on the branding front. Rajiv had said the 'Bajaj' name will be done away with from the motorcycles as the brand has been diluted, having presence from electricals to insurance to automobiles.

The junior Bajaj had said: "Bajaj is a bit like a zoo", while stressing that products like the Pulsar, Boxer, Discover have become brands by themselves, as a result of which the Bajaj brand has become 'more like a garage'.

The father, however, had ruled out dropping the 'Bajaj' brand, as opposed to an idea toyed by Rajiv, saying: "As of now the answer is no. But after 10 year, who knows? As of now the Bajaj name will be there."

The senior Bajaj was also quite vocal in expressing unhappiness when his eldest son decided to bring down curtains to the scooters, thus ending the saga of 'Humara Bajaj' in December last year.

"I feel bad, I feel hurt. . . I can't say harm the company and its shareholders by doing something you should not do. . . But I am still not convinced. He (Rajiv) has tried to explain it to me," Rahul had said.

However, Rajiv had reacted stating: "I care less for the solution from emotions, I believe more in the magic of logic."

Commenting on the company's financial performance in 2009-10, Rahul said: "Your company's performance has not been about 'buying' market shares through various pricing deals.

"Instead, it is about gaining share through better quality and branding thus having the customer willing to pay higher prices for better value," he added.

The company's net sales and other operating income last fiscal increased by 35 per cent to Rs 11,900 crore (Rs 119 billion), while its net profit jumped 160 per cent at Rs 1,700 crore (Rs 17 billion).

Image: Rajiv Bajaj