For Triumph, brand connect is key in Bajaj partnership

Steve Sargent is obviously in the midst of a busy schedule at the Triumph Motorcycles pavilion at the EICMA show in Milan but is gracious enough to give me time.

The meeting has fortunately been fixed well in advance since there is little likelihood, otherwise, of getting time with Triumph’s Chief Product Officer, who has a big role to play in his company’s partnership with Bajaj Auto.

It was in August 2017 when the two announced their intent to team up and make mid-capacity motorcycles both for India and other parts of the world. Sargent is no stranger to India or, for that matter, a host of other emerging markets.

The Triumph meeting rooms are packed and as we walk around the pavilion, he tells me that he was Managing Director for Thailand for 10 years and subsequently helped set up the assembly operations in India (Haryana) as well as Brazil.

The partnership with Bajaj Auto is, of course, a different ball-game as this will mark Triumph’s presence in an all-new segment marked by mass production and competitive costs. “With Bajaj, the two teams have been working quite closely for a year now and have been making good progress on the design and development of the bikes,” says Sargent as we zero in on a more comfortable standing area to talk.

He adds that there is also a clear idea of how the partners want to go into this segment of the market and in a way that the offerings can be recognised as belonging to Triumph. After all, reasons Sargent, the brand has a very long and strong history and the time has come to grow beyond the West and “tap fully” into markets like India.

Customer is key

He is also reasonably confident of the road ahead given the growth in income among the middle-class, which has fuelled aspiration for premium motorcycles. “For us, the focus is always on the customer: just not what they want of the product but what they expect from a Triumph product. That is the critical thing from my point of view,” reiterates Sargent.

He is equally categorical that the bikes will need 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,” he says.

This is where Sargent’s stints in Thailand and other emerging markets like Brazil will come in handy for the new India project even while he insists that each region has its own specifications. Hence, it is a “very difficult thing to say” if a product for India will 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,” elaborates Sargent. 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.

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 going on long rides especially during the weekends when they yearn for a break from city traffic.

Bajaj partnership focus

However, the partnership with Bajaj Auto will throw up new challenges even while the potential buyer base could be larger. In its first outing with the completely knocked down (CKD) route some years ago, Triumph “did a piece of work” with a local Indian consultancy firm. Research was done in Tier 1 and 2 cities along with multiple focus groups including owners of big/mid-capacity bikes.

To that extent, it was a broad-based study of buyer preferences across regions as well as what motorcycling meant to people in India. However, the foray with Bajaj Auto is far more focussed in terms of addressing a particular segment of mid-capacity bikes (typically from 350 cc-750 cc).

“What we have been doing more specifically is market research focus on what the product needs to be for the collaboration with Bajaj Auto,” says Sargent. This is a different customer by the end of the day and not broad-based like what it was earlier. The job on hand in this case is to look at where the opportunities lie both in India and other parts of the world.

According to Sargent, growth in motorcycles is almost flat in mature markets in Europe and the western world. This in turn means that it is difficult to see where opportunities lie even while competition continues with other manufacturers in existing segments.

The Asian game

The bigger game clearly is Asia where countries like India and China have huge potential to offer. In ASEAN, Thailand is doing very well while Indonesia and the Philippines also have a lot of potential for mid-capacity bikes. Latin America, likewise, is interesting, which seems to suggest that the sky is the limit for Bajaj Auto’s Chakan plant near Pune, the hub for these bikes.

Where a lot of people make the mistake in emerging markets, says Sargent, is that they think it is about driving the price points. That is never the story; the story 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,” he says.

The “strong positive” with Triumph is that it has, over the years, emerged a well-known brand in India, especially in the premium space that it occupies. Sargent says the team in India has done a great job in getting the brand out and establishing it as a premium player in the market.

“That fact is coming through very strongly now when we go out and research customers. When we ask them about different brands in the market, it is quite clear that we have done a great job in positioning Triumph,” he adds.

The other good thing is that the partners are on the same page when it comes to global focus for their new motorcycle range, which could debut by 2021. “From our first discussions with Bajaj, it has always been much more than being about an India product,” says Sargent.

As he explains, the Indian two-wheeler maker has had “huge success” in exporting its products out of India. “Rajiv (Bajaj) is also very clear that his ambition, as a boss and owner of the company, is to clearly look beyond India and go global,” he says. It is also clear that people’s incomes in western markets are getting stretched “a little bit”, which means that there is an opportunity in this part of the world too.

Introduction to a brand

According to Sargent, there will always be a place for larger bikes but where the mid-size category will play a role is 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 manufacturer’s product portfolio.

The subject then shifts to India’s Bharat Stage VI emission norms, which become mandatory from April 2020. While the partners are working with this in mind for their new range, the bigger challenge is to be constantly updated about what could come after that.

“The time-frame for developing bikes and getting them through to the next stage regulations is getting shorter and you need to understand issues and cope quickly,” cautions Sargent. It is also his belief that while costs could tend to be a little higher initially, component suppliers will start working on reducing costs over time.

Sargent says these are “certainly one of the most uncertain times that have ever been for the motorcycle industry” in the western market with traditionally favourite countries “probably flatlining a little bit”. This is where emerging markets become important.

He also believes manufacturers will 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,” declares Sargent.

COMMENT NOW