Financial Daily from THE HINDU group of publications
Saturday, Oct 09, 2004
Corporate - New Projects
Bajaj vehicles to ride Pakistan roads
Mumbai , Oct. 8
HAMARA Bajaj is readying to cross the Pakistani border, pillion-riding one of that country's biggest business families.
The country's second-largest two-wheeler maker is talking to the Saigol family of Pakistan to set up a manufacturing joint venture that is likely to be the first production base by any Indian firm there.
However, the project is likely to begin as an export venture where Bajaj will send completely knocked down (CKD) kits of two-wheelers and three-wheelers that will be assembled by the Saigol group at its existing plant.
Confirming the development, Mr Rahul Bajaj, Chairman, Bajaj Auto, said: "We are in talks with the Saigol family. But I do not think a manufacturing joint venture is possible now. We will begin with CKD exports, which the Saigol family will assemble at its plant. As political relations with Pakistan improve, we hope to convert it into a full-fledged manufacturing venture."
Currently, the Saigol group operates a motorcycle assembly plant with the Qingqi group of China. The family is expected to buy out the Chinese from the joint venture and phase out their motorcycles completely. Within about a year it will be making only Bajaj vehicles.
Mr Bajaj said the company is expected to sign a memorandum of understanding with the Saigols by January or February 2005.
"Currently there are hardly any three-wheelers in Pakistan. If all goes well, we hope to sell about 20,000-30,000 vehicles in two to three years," he said. He also expected two-wheeler sales to be in the range of about 50,000 to one lakh vehicles in two to three years.
An automobile analyst with a top broking firm here described it as a very positive development. The analyst said even though the exact impact of the move could be gauged only after looking at the financial details and expected sales numbers, the company has definitely scored one with the move.
Pakistan does not have any indigenous vehicle brand. While it does not have any three-wheelers at all, Japan's Honda, the Italian major Vespa and Chinese manufacturers sell two-wheelers.
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