From the biography: When the Vespa scooter became the household name that was Chetak Bajaj

With Piaggio’s exit, Bajaj’s scooter needed a new name. “Once I realised that the government was not going to renew the agreement with Piaggio, I knew I had to drop the brand name Vespa for our scooters and APE for three-wheelers,” says Bajaj. “It was equally clear to me that we should have the ‘Bajaj’ brand name for our vehicles. I discussed it with Kakaji, perhaps mentioned it to the Board, and discussed it with our advertising agency, Lintas, headed by Alyque Padamsee.”

Bajaj finally chose a double-barrel – the Bajaj-Chetak, after the fabled horse of Maharana Pratap Singh who saved his rider in the Battle of Haldighati on 21 June 1576. “The name change was no problem at all because Bajaj scooters and three-wheelers had a ten-year delivery period. Our brand easily replaced the Vespa,” says Bajaj.

“Buying a scooter in the 1970s was complicated,” Abhilash Gaur, a scooter enthusiast blogger, reminds us.

“You had to write an application to a dealer to grant a scooter for personal use. Then you went to a post office, opened a savings account, and put in a security deposit of Rs 250. The post office gave you a passbook, and you pledged this to the scooter dealer as proof of intent to purchase. Then you waited for your turn. On the happy day, the dealer returned the passbook and ‘authorised’ you to withdraw your Rs 250 to make the full payment. If you applied just before your wedding, you had school-going children by the time you got your scooter. This procedure was laid down in a rule called the ‘Scooters (Distribution and Sale) Control Order, 1960’.”

India scuttled its own scooter bazaar. The middle class was growing and wanted wheels. The Planning Commission estimated that 210,000 scooters would be needed in 1973-74. A think tank, the National Council of Applied Economic Research (NCAER), calculated that annual demand would increase to 243,000 scooters by 1979-80. These numbers were far off the mark. The number of pending scooter bookings on 31 March 1970 was already 84,883 for the Lambretta and 1,76,933 for the Vespa, re-badged as the Bajaj-Chetak.

A customer fortunate enough to be allotted one could sell it the next moment at double the price.

A Bajaj scooter became a regular dowry demand among middle-class families. Dealers unofficially charged customers huge premiums to jump the queue. Of course, for those who couldn’t wait, they had only to pay a premium and pick up a Bajaj-Chetak from a flourishing black market.

“A few people could avoid the long queue,” reminds Bajaj. “The government formulated a foreign exchange scheme under which if the customer paid for his Bajaj-Chetak in foreign exchange, he would get early delivery.” The thought also went down well in the head office of Bajaj America, headed by David Jones at the time.

At best, the US response to the Chetak was lukewarm, however. “Consequently, Bajaj introduced a scheme whereby Indians in the US could purchase the Chetak, pay in dollars and re-export them to India to their relatives,” shared Jones. “The recipients of the scooters would avoid the long waiting periods and Bajaj would be able to procure foreign exchange.”

The scheme worked just fine with everyone happy. “400 scooters were re-exported to India,” said Jones. “In spite of the fact that the scooters are manufactured in India and eventually used in India, they still have to make the trip to the United States and back to satisfy bureaucratic formalities. The scooters are unloaded at a Bajaj America warehouse in Columbia, South Carolina, and shipped back without even un-crating. Ship carriers have now accorded us the privilege of special round-robin freight rates.”

Under the Morarji Desai administration, life became breathable for scooter manufacturers when The Scooter (Distribution and Sale) Control Order 1960 was guillotined on 1 January 1978.

“However, in view of the huge backlog of pending orders for ‘Bajaj’ scooters with our dealers and to ensure equitable distribution,” realised Bajaj, “for some time, we had to continue the procedure for distribution of scooters similar to the existing prior to the withdrawal of the order.”

Adds Bajaj, “I was always under pressure from workers, dealers and vendors to raise scooter prices and share the higher margins, but I refused. The shortage regime meant they were making money. The market premium of the quota regime, apart from customers, went to a few dealers and brokers who made a killing by first booking their orders and then selling scooters in the black when their turn came.”

An exceptional case once crossed Bajaj’s table: a personal request from Air Chief Marshal Idris H Latif to grant a priority scooter.

“Very early in the 1970s,” remembers Latif, “I was commanding our fighter and bomber base at Lohegaon, Poona, a base with about 10,000 personnel, including a number of civilians. One of them, Vincent, was a key member of my staff. The air force is always on call, twenty-four hours of the day. With the Bangladesh conflict round the corner, we were on high alert. Vincent lived far from the camp with his family of four, including a severely handicapped daughter. And clearly it was becoming very, very difficult for him to be available round the clock, at short notice. One morning, with great hesitation I could see, he asked me if I could help him purchase a Bajaj scooter on ‘priority’. It was a prized possession in short supply. With great hesitation, with Vincent very much in mind, I agreed to write to Mr Rahul Bajaj, a person I had only heard of, but never met. Explaining at some length the circumstances, I requested ‘if, as a special case...’ Within a week, I had a personal response: of course!’”

Excerpted with permission from Rahul Bajaj: An Extraordinary Life, Gita Piramal, Penguin Business.