Bajaj RE60 is being seen as a threat by competitors in the fast-growing rural market space; questions raised on safety & emission norms
There is one thing that those on both sides of the quadricycle debate agree on,that Bajaj Autos RE60 aims to do exactly what Tata Motors Nano had hoped to deliver four years back provide mass affordable personal transportation to those graduating from two-wheelers.
This seems to be a great idea in itself,but then why are carmakers like Tata Motors and even some two-wheeler makers so vehemently opposed to the RE60 and quadricycles in general?
Lack of safety and emission standards is only a part of the story,but the bigger battle is over the fast-growing rural market space,which accounts for about 20% of the 2.5 million passenger vehicle segment and where demand is growing at about 40% every year over four times that of urban India.
Quadricycles can have a killer price,because they can skip many things that cars have to confirm to. Both the Nano and the RE60 had set out with the same objective,but Tata ended up having an urban focus and built an actual car,so its costs were much higher, says an analyst. Quadricycles can be priced sharply lower because they dont use expensive materials like reinforced steel or glass windows,relying heavily instead on lighter plastic parts for the body. They also have weaker crash test rules and emission standards than cars.
The worry for most carmakers is that an expected price below R1.5 lakh will make the RE60 significantly cheaper than current popular modes of rural transportation like the Tata Ace Magic,Mahindra Maxximo and Mahindra Bolero,and eat into their market share. Some entry car models such as Maruti Suzukis Alto and the Tata Nano may feel the pinch too.
Two-wheeler makers may also see a dent in numbers if a closely-priced four-wheeled alternative like the RE60 is available,especially when Bajaj already has a strong network in rural areas owing to its core two-wheeler business.
Carmakers are worried about the rural market story,where flashy cars are not as important but value is. Take the case of how the Tata Ace replaced the Tata 407 on many rural transport routes. With this pricing,the rural market could really jump maybe a million in a few years, says an industry expert.
Meanwhile,the car industry has also cried foul over Bajajs perceived lobbying attempts with the government to notify standards for quadricycles under the Central Motor Vehicles Rules.
While no definition for quadricycles exist today,preventing the launch of the RE60,the ministry of road transport and highways has already given its in-principle approval to the new segment in August last year,and a final notification is expected soon.
Why should they (Bajaj) be given preference by the government when the whole car market is against it? The genesis of the RE60 was trying to beat Tata at the R1-lakh car game; now they are calling it a quadricycle. Bajaj has developed its first four-wheeled vehicle and now they just want to push it to recover costs, says an industry executive.
Shinzo Nakanishi,former managing director of Maruti Suzuki,has said,Any legislation on quadricycles should comply with existing automotive norms on safety and emissions.
Tata Motors managing director Karl Slym echoed similar thoughts when he tweeted a week back,The government and industry have been accelerating efforts in traffic safety and environment,now we consider a quadricycle. Why go backwards?
Slym added a day later,The number of wheels do not automatically make us better,it is adherence to tried and tested safety and emission norms.
Deflecting all the criticism,Bajaj Auto managing director Rajiv Bajaj has said his companys primary attempt is to replace the less safer three-wheelers plying on most city roads in India and thus there is no argument of comparing the RE60 with cars. These three-wheelers,of which Bajaj itself is the biggest manufacturer,are more polluting and pose a significant safety risk as they are less stable at higher speeds.
However,most industry experts say Bajajs defence is weak.
If Bajaj is saying it will replace the three-wheeler,will they stop three-wheeler production? Why not let the RE60 have only commercial registration in that case? Who can really stop any vehicle from plying on the highways even if its technically and legally not meant to? they question.
Adds an analyst,Frankly I dont see it replacing three-wheelers. The quadricycle is more likely to replace taxis or work as a shared cab for fixed routes.
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