Ba­jaj Auto Joins Tri­umph for Global Ride, may Pose Chal­lenge to En­field

Cos to develop mid-size bikes for global mar­ket, which are likely to be made at Pune plant

The Economic Times - - Brands: Creating Desire - Our Bureau

Mum­bai: Ba­jaj Auto and UK-based pre­mium mo­tor­cy­cle maker Tri­umph en­tered into a global al­liance that could chal­lenge Royal En­field in the global mid-size mo­tor­cy­cle space.

Eicher Mo­tors-owned Royal En­field has al­ready de­clared its in­tent to be the No. 1 mid-size mo­tor­cy­cle brand in the world, a seg­ment which is go­ing to form the core of the Ba­ja­jTri­umph part­ner­ship that the com­pa­nies an­nounced on Tues­day.

The two part­ners be­lieved to have started work on a mid-size mo­tor­cy­cle for In­dia among other global mar­kets. It is ex­pected to be a cruiser bike, which once ex­e­cuted will of­fer a new en­try point for Tri­umph glob­ally and a prod­uct to fill a crit­i­cal gap in the line-up of the In­dian com­pany — ma- nag­ing di­rec­tor Ra­jiv Ba­jaj him­self has ac­knowl­edged the ab­sence of a cruiser bike in its port­fo­lio.

Much like its tie-up with KTM, Ba­jaj and Tri­umph will jointly develop the prod­uct for emerg­ing mar­kets like In­dia, Thai­land and Brazil. It is likely to be man­u­fac­tured at Ba­jaj’s plant at Chakan in Pune, and ex­ported to those mar­kets. Ba­jaj is al­ready In­dia’s largest ex­porter of two-wheel­ers. The move al­lows Tri­umph to grow beyond its an­nual vol­ume of 60,00065,000 units and par­tic­i­pate in a much larger global pie us­ing Ba­jaj’s dis­tri­bu­tion net­work, as in the case of KTM. Ba­jaj has helped the Aus­trian mo­tor­cy­cle com­pany build its global vol­umes from 65,000 units to 2 lakh.

The ob­jec­tive of this non-eq­uity part­ner­ship is to de­liver a range of out­stand­ing mid-ca­pac­ity mo­tor­cy­cles ben­e­fit­ing from the col­lec­tive strengths of both com­pa­nies, Ba­jaj and Tri­umph said a joint state­ment. “This new global part­ner­ship will en­able Tri­umph to sig­nif­i­cantly ex­pand its global reach by ente- ring 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 do- mes­tic mar­ket and other in­ter­na­tional mar­kets,” it said.

Much like Ba­jaj Auto, Royal En­field has de­cided to spe­cialise and fo­cus on the global mid-size mo­tor­cy­cle space (250-750 cc) to grow the brand. In the last four years, Royal En­field has seen its an­nual sales grow five­fold — from 1.2 lakh units at the end of fis­cal 2013 to 6.5 lakh units. With in­cre­men­tal vol­ume com­ing in from over­seas mar­kets, Royal En­field is plan­ning to pro­duce 9 lakh units this fis­cal year and it may cross the 1 mil­lion mar­ket next year.

In­ter­est­ingly, Tri­umph al­most a year back had pulled out of a planned ₹ 850 crore in­vest­ment in Kar­nataka for a man­u­fac­tur­ing fa­cil­ity. With part­ner­ship talks tak­ing a cen­tre stage, it may uti­lize the fa­cil­ity of Ba­jaj to man­u­fac­ture its smaller dis­place­ment bike for fu­ture.

Both com­pa­nies will look at lever­ag­ing in­di­vid­ual strengths of the part­ners in­clud­ing brand po­si­tion and per­cep­tion, de­vel­op­ment tech­nol­ogy, qual­ity & cost com­pet­i­tive­ness and world­wide dis­tri­bu­tion, the state­ment said. When Tri­umph en­tered In­dia in 2013, it de­sired to make a hub to ex­port to emerg­ing mar­kets.

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