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BAJAJ Auto, the country’s second-largest two-wheeler maker, on Thursday said that it has carved its different businesses into five separate units, of which three will be headed by CEOs responsible for profit and business growth.
Pradeep Srivastava, VP-engineering, has now been elevated to president-engineering. S Sridhar, currently VP-marketing and sales, two-wheelers, will now head the two-wheeler business as CEO with manufacturing operations at Waluj and Akurdi also reporting to him. RC Maheshwari has joined Bajaj Auto as CEO of commercial vehicles and the company said it is in the process of identifying a CEO for its international business. These will be supported by functions of finance, MIS, HR, business development and commercial, a company release said.
The move, ushered in by Rajiv Bajaj, the managing director, is aimed at turning the 62-year-old company into a nimble-footed player capable of responding quickly to changes in the world’s second-largest market for motorcycles. It is also an attempt by the younger Bajaj to infuse greater responsibility and delegate more work to the senior management team.
Rajiv, 40, was largely instrumental in turning around a stodgy, inward-looking scooter maker churning out products with outdated technology, into a hungry, ambitious company obsessed with growth and profitability. In the past decade, Bajaj Auto has not only shed its tag of a company with inferior technology, but also become a leading contender for the top slot in the motorcycle business, a position that Hero Honda has held for nearly two decades. With growth slipping and margins under pressure, Rajiv has turned his attention to producing high-margin bikes with superior performance, with the ability to command a premium pricing in the market.
“The restructuring was prompted by the need for a more efficient and responsive organisation and transit from a relatively narrow function into a more integrated and cross-functional working with clear focus on business results as well as focus on speed, innovation, and perfectionâ€, said Mr Bajaj. The three CEOs will be responsible for topline, business growth & profitability of their respective businesses and Abraham Joseph will continue to lead Research & Development. The transition would be completed by August 1, 2007.
“The new structure would assist in ‘Aligning the Vectors’ of the organisation and will enable the company to live its brand values & be ‘Distinctly Ahead,’ adds Mr Bajaj.
At a meeting in mid-February 2007, Rajiv Bajaj had said, “I don’t have business heads for two verticals which I am handling. Once they are in, I will hand over to them.†He said he had appointed “excellent†people to head R&D and engineering, but did not clarify which two did not have heads. Analysts claim that the two-wheeler major has set stiff sales targets for the year 2007-08 and this demands a high energy team capable of delivering.
Recently, the patriarch of the Bajaj group, Rahul Bajaj, announced the demerger and realignment of business responsibilities between his sons Rajiv and Sanjiv. The board of Bajaj Auto approved a demerger scheme splitting the company into a holding company and two newly-created subsidiaries — Bajaj Holdings and Investment (BHIL) and Bajaj Finserv (BFL). BAL’s demerged auto manufacturing business would be with BHIL and other strategic businesses would be with BFL. Bajaj Auto scrip closed at Rs 2,089.7, down 20% on the BSE
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