‘This has been a wonderful year for Bajaj’

When Rajiv Bajaj tells you that 600 units of the Dominar 400 were sold in Mexico last month, it may not seem an impressive statistic initially. After all, this kind of tally is minuscule back home in India where monthly two-wheeler sales average over 1.5 million units.

The Managing Director of Bajaj Auto, however, is making a more important point. Here is a recently launched India-branded motorcycle that is gradually notching up numbers in a market thousands of miles away. It also fits in with the company’s strategy of being a truly global bike manufacturer keen on spreading its footprint far and wide. “By the end of the day, it is important to focus on one thing and do it well, which explains why we will stick to our core competence in motorcycles and steer clear of scooters,” says Bajaj.

Global hub for motorcycles

At present, nearly 40 per cent of its output is exported and this component could grow in the coming months thanks to the company’s strong alliance with Austria’s KTM and the new one underway with Triumph of the UK.

In the process, Bajaj Auto is keen on growing the manufacturing strengths of its Chakan plant near Pune, which is quickly on its way to becoming a global hub for motorcycles. It is from here that the KTM range with engine displacements of 125cc-400cc heads out to both developed and emerging markets.

By the end of this decade, at least a couple of brands from Husqvarna (the Swedish bike brand, which KTM acquired in 2013) will become part of the Chakan lineup. These will also be shipped out to a host of countries even while satiating the demand of Indian customers. The year 2020 will also hopefully see the first lot of the made-in-India Triumph range exported across the world.

Perhaps, the significant difference in the KTM and Triumph partnerships is the absence of equity in the latter. To a section of industry watchers, this could mean that Bajaj Auto will only end up being a contract manufacturer for Triumph.

Its MD, however, retorts that nothing could be farther from the truth. He points out to the successful 10-year partnership with KTM, which began with a 14 per cent stake that has since grown to 48 per cent. Yet, it is not as if this has translated into greater control when, to the contrary, the real reason for the success story has been the trust between the partners.

As Bajaj reiterates, too much is being made of equity in an alliance when it is really not such a big deal by the end of the day. “This is an overhyped view and boils down to a fundamental desire to own and control, which is really not the case here with either Triumph or KTM,” he says.

Both Bajaj and Triumph have known each other for a decade now though it was only in late-2016 when alliance talks actually began. To that extent, things have been “very upfront” and the deal was sealed this year. The fact that KTM was constantly kept in the loop at every stage only reflected the comfortable bonding it has with its Indian ally. It now remains to be seen if a mega Bajaj-KTM-Triumph alliance eventually emerges, which could then see a range of bikes both produced at Chakan for India and the world.

A memorable year

From Rajiv Bajaj’s point of view, “2017 has been a wonderful year” for his company, which saw the new pact sealed with Triumph in addition to the decision to bring the Husqvarna range to India. There was also encouraging news back home where the company’s core business of motorcycles has been under some pressure.

“I do believe domestic motorcycles have turned the corner with the new CT, Platina and Pulsar NS doing well,” he says. “Three-wheeler sales are also booming.” Additionally, it looks as if the break for the Qute quadricycle has finally come through (with the draft notification from the Ministry of Road Transport and Highways) and it will hopefully be launched by the end of this fiscal.

On exports, there is far more stability in markets such as Nigeria that went through a rollercoaster ride last year and there was uncertainty all around. Bangladesh and Egypt have been “good too” with the next big focus area being the ASEAN region. KTM is already eyeing this new frontier aggressively and the coming years could also see Triumph making a foray here.

“I am happy that our market share in motorcycles is close to 20 per cent. There will be some impactful launches by January, which goes in line with each and every move of ours,” says Bajaj. “By March, we will hopefully have a 23 per cent share.”

New challenges

One of the new launches that could make the difference is the Avenger where the idea is to achieve the results as the Pulsar 160 and 200 NS. Ideally, from the company’s point of view, every product needs to make an impact both here and overseas but this is easier said than done.

For instance, the Dominar 400 has got off to a stronger start overseas than in India where it is still doing only a couple of thousand units every month. “It has been slow and steady like every new product and we need to give that leeway to the Dominar 400,” says Bajaj. Perhaps, one reason is that it has been pitched as an alternative to Royal Enfield, which is a far more established brand and customers will take time getting used to the Dominar 400.

Likewise, the much touted 150cc ‘V’ with the INS Vikrant association caught the fancy of customers in a big way when it was launched early last year. However, the momentum has not quite sustained in the months that followed. “Of course, we would have liked larger volumes for ‘V’ and will do something about it,” says Bajaj.

While things are getting back on track in 2017, the bigger challenge is three years from now when Bharat Stage VI emission norms become mandatory from April 2020. Two-wheeler makers admit that they have their work cut out thanks to investments on fuel injection and balancing these out in a price-sensitive market such as India.

“I agree that 2020 is an important milestone both for electric and BS VI. However, I personally do not see too much happening with electric (in 2020),” says Bajaj. This means the conventional engine will persist without any dramatic change in equation though things could change in subsequent years as electric gain momentum and manufacturers get ready for disruptions across the supply chain.

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