05 Feb 2016 17:15 IST

Is the Delhi Auto Expo a waste of money, as Rajiv Bajaj says?

Bajaj Auto Managing Director Rajiv Bajaj at the launch in New Delhi of the company's new motorcycle range christened the 'V' bike, as it is made from metal from the decomissioned 'INS Vikrant'.

Companies use such expos to showcase concepts, attract a fan following and ensure brand loyalty

Even as I write, the 13th edition of the Delhi Auto Expo is going great guns. This year, the carmakers are outdoing themselves by unveiling a record number of new models, including those with long legs. Also in attendance have been movie and sports stars. The companies’ aggression is understandable as sales have got off to a slow start this year.

But just a day before the whole industry descended on Greater Noida, a lone dissenting voice was heard – that of Rajiv Bajaj, Managing Director of Bajaj Auto. Bajaj, not known to mince words, branded the Expo a waste of money.

Launching the company’s new bike a day before the big event was to open, he said: “To participate in such an event, it takes around ₹10-15 crore to make those concepts and the poor R&D department is spending half its time creating these concepts. There are some big car companies who have big money, they can do it. We are a small company. So to spend such an amount is not affordable for us,” Bajaj told reporters.

Buttressing his argument, Bajaj compared the costs of launching the new bike at the Expo and in a five-star hotel: “To show the same thing, the ‘V’ model, over there (at the Auto Expo) it would cost ₹5 crore, we have managed it here for ₹5 lakh.”

Is Bajaj’s stance reflective of his company’s struggle to compete with the big two of India’s two-wheeler market – Hero and Honda? Probably, he didn’t want the launch of his new bike to be overshadowed by the products of his competitors at the Expo.

But, then, are giant exhibitions such as the Delhi Auto Expo really a waste of money? Notably, even Royal Enfield, Harley Davidson and Daimler have kept away from the Expo this year.

Milan’s experience

The Expo 2015 in Milan, was one of the grandest of fairs ever held, coming as it did after the extravaganza of the previous edition in Shanghai in 2010. There were huge protests in the European city over the giant event, with critics highlighting the overrun budget of €13 billion. The event was also plagued by corruption charges. Few are convinced that the Expo will have a positive, long-term impact on Milan’s economy.

Even in Shanghai, nothing much is left of the $50-billion spectacle. Reports say that most of the pavilions have come down, except for China’s, which has been turned into a museum. The next Expo is slated to be held in Dubai, in 2020.

It is not just the giant exhibitions. Almost each edition of the Olympics has been afflicted by similar tales of deserted stadiums, corruption and unfilled promises of employment.

Compared to these events though, the Delhi Auto Expo is better placed as the infrastructure created is assured of being used at least once in two years.

A launchpad

The Delhi Auto Expo has had its moments. The whole world seemed to have assembled at the Pragati Maidan in 2008, as Ratan Tata drove in the Nano. Even Bajaj has used the platform to make grand announcements. In 1998, the Bajaj scion told journalists that he was going to transform his father’s company from a scooter producing one to a motorcycle-maker.

Almost two decades later, Bajaj claims his company is a known brand in India’s motorcycle market and doesn’t need to waste resources in making ‘expensive concepts.’

While Bajaj’s finance head would be happy with the boss’ view, I wonder what his marketing guy is thinking. The Auto Expo, and similar exhibitions, are used by companies for several reasons, but the biggest of all is to ensure brand loyalty and draw in more customers. A young India is high on technology, and the concepts (even if not all of them make it to the road) create awe, admiration and a fan following.

It is also about making a statement. Maruti Suzuki, the country’s biggest carmaker, laid out its wares, continuing on the buzz that its new-look Baleno and the Nexa outlets for premium brands have created in the market. For other global auto players, the Expo is an opportunity for them to be seen and heard in a market that is probably the fastest growing in the world.

Bajaj surely made a noise, but he was soon drowned out. At the same time, if his company emerges as the industry beater by the end of the year, everyone would want a byte from him.