The non-equity partnership aims to develop and market a range of midsized motorcycles benefiting from the collective strengths of both motorcycle manufacturers.
08 Aug 2017 | 7618 Views | By Amit Panday
Bajaj Auto’s much-speculated partner is not Ducati but the UK-based Triumph Motorcycles. Earlier today, Bajaj Auto announced on Bombay Stock Exchange (BSE) its global partnership with Triumph Motorcycles.
The two motorcycle manufacturers have entered into a non-equity partnership, which will focus on developing and retailing midsize motorcycles in the ...
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Bajaj Auto’s much-speculated partner is not Ducati but the UK-based Triumph Motorcycles. Earlier today, Bajaj Auto announced on Bombay Stock Exchange (BSE) its global partnership with Triumph Motorcycles.
The two motorcycle manufacturers have entered into a non-equity partnership, which will focus on developing and retailing midsize motorcycles in the near future.
While Bajaj Auto, which owns 48 percent stake in Austrian brand KTM and has an arrangement to make sub-400cc motorcycles, will gain in terms of venturing into the 400cc-750cc space, Triumph will benefit in the form of developing more affordable motorcycles (via Bajaj’s effective pricing strategies) and foray in many emerging markets.
KTM, which is now Europe’s largest selling motorcycle brand surpassing BMW Motorrad, is already reaping benefits on the back of its association with Bajaj Auto. It is clear that chasing KTM and BMW Motorrad, now Triumph Motorcycles is also gunning for new demand for mid-capacity motorcycles in the emerging markets including India.
The announcement from Bajaj Auto quotes, “We hope to bring to bear upon global markets the individual strengths of the partners including brand position and perception, design and development technology, quality and cost competitiveness and worldwide distribution. This new global partnership will enable Triumph to significantly expand its global reach by entering new higher volume market segments, especially within the emerging markets across the world. Bajaj will gain access to the iconic Triumph brand, and its great motorcycles, enabling it to offer a wider range of motorcycles within its domestic market and other international markets.”
Speaking to CNBC-TV 18, Rajiv Bajaj, managing director, Bajaj Auto, said the 250cc-750cc motorcycle segment is the next big opportunity worldwide. His comments are aligned with Royal Enfield chief’s comments in the recent past; Siddhartha Lal had stated that his company is aiming for the pole position in the global midsize (250cc-750cc) motorcycle market.
Bajaj’s plan to aggressive tap the surging demand across the emerging (including India) and developed economies for mid-capacity motorcycles globally puts the company in direct competition with Royal Enfield.
However, industry experts say that this move will benefit the expanding segment and its customers more than jeopardising any rival’s (existing and planned) position in the market.
“For us, the only missing link from the puzzle was a premium brand or an association with a premium brand in the midsize motorcycle segment. Yes we are looking at the lazy-riding or leisure-riding segment. I have known Triumph Motorcycles for the last 10 years and now we both are comfortable enough to come together. To me, the brand value of Triumph Motorcycles ranks higher than Royal Enfield,” Bajaj told the business channel.
He added, “India remains the most important market for us and for Triumph. Bajaj Auto might look after the retail of products (under Bajaj-Triumph) in Africa, Latin America and ASEAN regions while Triumph can expand in advanced markets.”
Semi-Knocked Down Units
Bajaj Auto is already working to expand its production capacity at Chakan. According to the company, the new products under the Bajaj-Triumph partnership will be developed / assembled at its Chakan facility.
“It is going to happen in Chakan, although we are not sure as of now if we can do so in the existing unit or in the upcoming unit next door,” added Bajaj as he spoke to the TV channel.
It is to be noted that the company plans to roll out made-in-India (Chakan unit) Husqvarna motorcycles globally next year. The motorcycles are also planned for retail in India and ASEAN markets via Bajaj Auto’s distribution network.
Interestingly, while speaking – on the engagement of engineering teams at Bajaj and Triumph – to the TV channel, Bajaj also spoke about SKUs under partnership with Triumph Motorcycles.
Although the Bajaj Auto boss refrained from revealing any product plans and product categories, the mention of SKUs, if the company has such plans, clearly mean that the commencement of this new partnership might see semi-knocked-down Triumph motorcycles being assembled by Bajaj Auto at Chakan for retail in India.
However, there is no clarity on the same as of now.
The KTM alliance
Rajiv Bajaj has repeatedly stated that KTM is progressing to become the largest premium motorcycle brand in the world, thanks to the low pricing bandwidth achieved by manufacturing sub-400cc models in India. The Husqvarna models available for retail, expected to be launched in India next year, will be sub-400cc models.
While it is felt that this would make Bajaj Auto focus on the 400cc-750cc categories across many motorcycle formats (including mid-capacity cruisers rivaling Royal Enfield) under its newly formed partnership with the British brand, it remains unclear if the Indian company would do so.