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Bajaj hopes to replicate KTM success story with Triumph

Murali Gopalan | Updated on January 30, 2020 Published on January 30, 2020

Rakesh Sharma Executive Director, Bajaj Auto

The future could see synergies happening with the trio, though these are early days yet

Rakesh Sharma cites the example of the KTM partnership to drive home the point that the sky is the limit for his company’s alliance with Triumph Motorcycles, too.

“When we first joined hands with KTM, who would have thought that so much could be achieved during these years,” says the Executive Director of Bajaj Auto. Since the time the company first picked up a 14 per cent stake in the Austrian bike maker way back in 2007, the bonding has only strengthened over the years.

Sharma believes that there is no reason why something similar cannot happen in the partnership with this iconic British brand either. “We would like to replicate the KTM story with Triumph,” he says.

For now, Bajaj and Triumph will focus on the development of midsize motorcycles (250-750cc) for emerging markets like India and the ASEAN region with perhaps Latin America to follow in due course of time.

As Sharma says, markets in the West, especially North America and Europe, are saturated. Consequently, all the action is happening in South Asia and ASEAN even while the challenge here is a purchasing power which is not at par with the West. People in these countries also prefer lighter and smaller motorcycles.

Clearly, for the likes of Triumph to access these markets, the need of the hour is a new product portfolio. While the British bike maker has a facility in Thailand, it would still like to reach out to a larger customer base with more accessible modern classic bikes.

According to Sharma, issues like development/understanding of these markets, R&D and regulatory requirements are all critical and need to be addressed. The key is to meet the aspirations of customers and this where two heads are better than one in taking on this task.

With the Bajaj partnership, Triumph can expand its business into more emerging markets and reach out to a larger buyer base with a slew of products. The alliance will also play a big role from the viewpoint of localisation, costing and economies of scale. In the process, the Chakan plant near Pune will become and even stronger production powerhouse for brands like KTM, Husqvarna and Triumph.

It is this point that Sharma stresses upon when asked about the road ahead with Triumph. He refers to the KTM journey, which has grown to include motorcycles in the 125-400cc range that are exported to all parts of the world in addition to being retailed in India. “When we first came together, who would have though of Husqvarna or electric scooters?” asks Sharma. KTM had acquired the Swedish bike brand from BMW Motorrad in 2013 and now Husqvarna will soon be part of the Chakan product lineup. As in the case of KTM, the bikes produced here will be sold in India and other markets.

Likewise, on electric mobility, the next couple of years will see e-scooters sporting the KTM and Husqvarna brands. These will roll out from the same platform that has spawned the recently launched electric Chetak. And while these are early days yet, there is no reason why e-motorcycles will not become a reality either sometime in the near future.

Transparency and trust have been the prime movers of the Bajaj-KTM journey and even while the Indian two-wheeler maker has a sizable 48 per cent stake in the company, it was always been an equal partnership. KTM, for instance, was always kept in the loop on Bajaj Auto’s talks with Triumph and it will now be interesting to see if the Austrian company will also play a part in the partnership.

Sharma says it is too early to predict if there could be potential synergies between the trio. From his point of view, it is first important for Bajaj and Triumph to get to know each other “and we will then go with the flow”.

Host of competencies

Clearly, there are a host of competencies that will come to the table from KTM and Triumph that could translate into some interesting opportunities in the new era of mobility disruption, which will involve electrification, digital, connected bikes and so on.

The bottomline is that as in the car segment where collaborations are now gaining traction, be it Toyota-Suzuki, PSA-FCA or Volkswagen-Ford, it is no different for two-wheeler makers. “It is therefore important to be humble and reach out to those who possess unique strengths,” says Sharma.

By the end of the day, he adds, working in silos will not help take on new challenges. “I see this picking up in two-wheelers too and this is where the KTM-Bajaj partnership has shown the way,” he says.

More recently, Harley signed up with Qianjiang Motorcycle Co of China for midsize motorcycles and is apparently keen on identifying a local player in India for the same objective. The American iconic bike brand had figured out that the bigger play lies in emerging markets though there are challenges in costs and products that will first have to be met.

Likewise, Honda and Yamaha decided to work together solely for sub-50cc scooters in Japan but there is no reason why they will not take the partnership to the next level in areas like connectivity or electrification. Sure, the two were bitter foes at one point in time but realise that in an increasingly unpredictable world, it makes sense to collaborate and pool in investments/competencies. In an interview with this writer during the 2018 EICMA Motorcycle Show in Milan, Steve Sargent, Chief Product Officer of Triumph, had said that “where a lot of people make the mistake in emerging markets is that they think it is about driving the price points”.

That is never the story, he insisted, since it is “really offering customers something that is valuable at a price they can afford”. By the end of the day, nobody wants to think that they bought a cheap version of something else. “What you have to do is give something that they can see as premium and a quality product,” Sargent had said.

During the interview, he also maintained that the motorcycles being developed with Bajaj would have to be in a league of their own and not ‘me too’ products that are already out in the arena. “We need to find our own place in the market somewhere and something distinct that we can own and develop. That is what we must focus on,” Sargent had said.

He clearly knew what he was talking about, since he had had stints in emerging markets like Thailand and Brazil, where the knowledge base would come in handy. Yet, cautioned Sargent, each region had its own specifications and it would be a “very difficult thing to say” if a model for India would be a guaranteed hit in Thailand, Indonesia or the Philippines. “It really does not work like that. Every market has its own different dynamics and DNA,” he elaborated.

This holds true for more mature markets also, which puts in context why manufacturers need a broad range of products to be successful. Brazil, for instance, is very strong on adventure bikes that have a much larger market share compared to classic bikes, which are more dominant in France or the UK.

Success with modern classics

In India, Triumph has had good success with the modern classics early on and, over time, has seen that there is now a move towards adventure bikes. People are more inclined to go on long rides, especially during the weekends, when they yearn for a break from city traffic.

While there would always be a place for larger bikes, Sargent said, the midsize category would play a role in “bringing people into a brand for the first time”. When they trade up, there will be an opportunity to move up to the next level within the same company’ product portfolio. He added that manufacturers would also need to become more agile and nimble in their thinking while being open to different solutions. That is why a whole lot of collaborations are coming out lately. “People have to really focus on new opportunities and think differently in terms of affordability. This means thinking out-of-the-box,” said Sargent.

Published on January 30, 2020
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