Rajiv Bajaj eyes success with Triumph
A century-old motorcycle brand that survived bankruptcy and rebirth to emerge as an icon for biking enthusiasts has a story to tell and an experience to share. Something Rajiv Bajaj hopes to bring home as he enters an association with Triumph Motorcycle Ltd of the UK.
Under their global alliance announced on August 8, Triumph and Bajaj Auto Ltd will design and develop a new motorcycle in the “middle weight” category, to be sold in India as well as abroad. Middle-weight bikes have an engine displacement of 250cc to 650cc. Bajaj, India’s second-largest bike maker, will build them at Chakan, near Pune, where it makes most of its models.
For Bajaj, Triumph is more than about sales and profitability (bigger, costlier bikes are more profitable) but also because it will enable the company to bring the entire Triumph heritage and the story and experience associated with the brand.
In an interview, Rajiv Bajaj, MD of India’s largest exporter of motorcycles, said the latter is critical, as it’s the story and experience that differentiates a product from a brand.
Unlike a Royal Enfield, this has been a missing piece for Bajaj, which makes Pulsar and Discover motorcycles.
“What we are really excited about is not India alone, but markets outside India (as well),” Bajaj said. The fact that Triumph is a well-known brand from the US to Japan, and has the technology, distribution and quality, bodes well for Bajaj and opens up opportunities in India and several others markets, he added.
“If we can sell ₹3,000 crore worth (of motorcycles) in India, we can sell ₹3,000 crore worth outside India. If we can have a bottomline of ₹1,000 crore in India, we can have double or triple of that, outside India. That’s the size of the opportunity,” he said.
According to Bajaj’s rough calculations, when the new bike hits the road in two years, Royal Enfield Ltd, which sells 60,000 motorcycles per month in the middle-weight segment will, in all likelihood, sell a million units every year. Expecting large volumes for its Triumph model, Bajaj is planning to build a dedicated manufacturing unit closer to its Chakan plant. Investments and capacity of the new unit will be finalised in six months.
Bajaj said if the new TriumphBajaj model is priced at ₹1-1.5 lakh ex-showroom and Bajaj captures even 20-30% of the segment, with an Ebitda (earnings before interest, tax, depreciation and amortisation) margin of 20-30%, it makes for a bottomline of ₹1,000 crore a year, with a topline of ₹3,000 crore a year in India alone.
The middle-weight segment, which the duo are targeting, is dominated by Eicher Motors Ltd’s Royal Enfield that makes 350cc and 500cc (and one 535cc) bikes. Bajaj makes one in that category—the 375cc Dominar—and Triumph none.