Triumph and Bajaj enter into a global partnership
Both the companies will be keen to capitalize on each other’s offerings in their respective operations.by Sagar, on
A few days ago, Rajiv Bajaj, MD of Bajaj Auto said, "We are very close to finalising a very promising alliance, it’s not certain, that it will happen, but if it happens, it will open up enormous possibilities for the company."
Today, however, a press release cleared the air and has managed to lift up all eyebrows. The alliance Bajaj was talking about was a global partnership with the British legendary motorcycle manufacturer, Triumph.
Bajaj is one of the world’s largest motorcycle manufacturer based in India. We all know how well KTM has partnered with Bajaj to handle most of the Austrian brand’s operation now, including manufacturing all the KTM bikes at its Chakan facility in Pune and selling them all over the globe. Bajaj-KTM has also now secured a similar takeout with the Husqvarna brand because of KTM’s acquisition of the Husky in 2013.
With the head of Bajaj teasing us with another alliance, it was intriguing about the thought of the Indian company buying out Ducati from Volkswagen. But with Volkswagen shutting doors for all possible buyouts of the Italian brand, that comment just got its voodoo back up again. Until now.
Both the companies have officially released a press stat that confirms the collaboration between Bajaj Auto and Triumph Motorcycle. Focussing on the middle-weight segment, both the companies are looking out to handle operations together and bring in sophisticated motorcycles with a low cost of production.
Being one of the oldest manufacturers of two-wheels, Triumph Motorcycles have been the epitome of British engineering and design, and they entered the Indian market half a decade ago with having 6.2% market share in the +500cc sector.
Now, running a similar business model as BMW-TVS, both Triumph and Bajaj will be sharing and developing 400cc – 800cc platforms together to distribute products locally and at the global stage. This joint venture will benefit Bajaj by bringing in investments and expertise to further broaden their R&D capability to improve on existing projects and bring in innovations across their product lineup.
Previously, all the Triumphs were got into the country through the CKD (Completely Knocked Down kit) and the FTA route (Free Trade Agreement) via the Thailand factory and UK. The CKD route constituted 20% of the bikes which were then assembled at the brand’s Manesar plant in India. Starting with the brand new Street Triple, Triumph is looking at expanding their CKD products from 20% to 90% in the coming year, all of which will be assembled at Manesar. The Street Triple will be the first model of the British brand to have the Make In India tag on it.
With this alliance, Triumph is also now under the guidance of Bajaj to help them expand within the emerging economic powerhouses like India and all countries Bajaj cater to; Nigeria, Columbia, Bangladesh, Philippines, Sri Lanka, Uganda, Central America, Egypt and Peru. Moreover, its Chakan plant can also become a base for the Britain to manufacture and export mid-weight motorcycles.
Although nothing can be said with pin point accuracy, for now, we know for sure that this collaboration will bring out a new breed of motorcycles that beam of engineering accuracy and at the same time be economically viable to reach maximum customer base. Speculating a sub 600cc-800cc motorcycle falling under the $4,000 - $7,000 category that either of the brands has a presence in is not far from accurate.
If this hypothesis is anywhere close to that, Bajaj Auto is on a path to become a niche brand since Bajaj will have its hand into making motorcycles for the entire range of capacities. Sub 250cc, Bajaj itself takes up all operations, KTM and Husqvarna will cater to the 250cc – 400cc category and Triumph will swoop in for the 400cc – 800cc segment of motorcycles. Possibly into making a motorcycle that gives an easy, lazy riding experience on a cruiser.
There has been no official word about the financial elements of this collaboration or what are the direct objectives that are going to emerge out advantageous to each of the companies involved.
Rajiv Bajaj had also commented on the alliance saying “That is why we keep our money (cash on books) with us, so, once in a while, when an opportunity comes along, we are ready."
For the record, Bajaj Auto as on date held free cash of about $ 210 million.