Triumph motorcycles and Bajaj announce their global partnership may turn into a manufacturing and export base for the UK brand. The objective of this non-equity partnership is to deliver a range of outstanding mid-capacity motorcycles benefiting from the collective strengths of both companies. The tie-up is likely to play a significant role in expanding the brand in emerging markets. As with KTM and Husqvarna, Bajaj Auto's plant in Chakan in Pune may turn into a manufacturing and export base for the UK brand.
Triumph Motorcycles pulled out of its planned investment of Rs 850 crore in Karnataka for a manufacturing facility about a year ago. With partnership talks taking centre stage, Triumph may utilise the facility of Bajaj Auto to manufacture its smaller displacement bikes in the future.
Triumph may be seeking to follow the Bajaj-KTM model. Bajaj helped KTM increase its global volume to 200,000 units from 65,000. When Triumph entered India in 2013, it had expressed a desire to make India an export hub for emerging markets. It had plans of entering the sub-500 cc space but then dropped that idea. With the forging of a new alliance with Bajaj, lower-displacement bikes are again likely to be part of the future expansion of the Triumph brand globally.
Bajaj Auto had been in the race to pick up a stake in Volkswagen Group-owned Ducati along with the promoter of KTM, Stefan Pierer. It has also been in discussions with Triumph for six-nine months, said people with knowledge of this.
“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,” Bajaj Auto Managing Director Rajiv Bajaj told shareholders at the company’s 10th annual general meeting recently. “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.” Bajaj Auto holds free cash of about Rs 13,250 crore.
Underlining the future potential, Bajaj had highlighted to shareholders that if KTM and Husqvarna can do half a million motorcycles a year, “Believe me they (with a new brand) can do a million motorcycles together,” added Bajaj.
Without sharing specifics, Bajaj explained the logic of adding another brand. He said KTM operated in the world of hard or sporty riding, which is meant for racing, but there are genres in the portfolio that were missing.
“There is also a world of easy riding or lazy riding. It is a world of Harley Davidson, the Indian motorcycle brand owned by Polaris, the world of Triumph--this segment so far has been missing from our puzzle. The only missing puzzle is the premium brand in this space,” added Bajaj.