Bajaj Auto and UK-based premium motorcycle maker Triumph entered into a global alliance that could challenge Royal Enfield in the global mid-size motorcycle space. Eicher Motors-owned Royal Enfield has already declared its intent to be the No. 1 mid-size motorcycle brand in the world, a segment which is going to form the core of the Bajaj-Triumph partnership that the companies announced.
The two partners believed to have started work on a mid-size motorcycle for India among other global markets. It is expected to be a cruiser bike, which once executed will offer a new entry point for Triumph globally and a product to fill a critical gap in the line-up of the Indian company -managing director Rajiv Bajaj himself has acknowledged the absence of a cruiser bike in its portfolio.
Much like its tie-up with KTM, Bajaj and Triumph will jointly develop the product for emerging markets like India, Thailand and Brazil. It is likely to be manufactured at Bajaj's plant at Chakan in Pune, and exported to those markets. Bajaj is already India's largest exporter of two-wheelers.
The move allows Triumph to grow beyond its annual volume of 60,000-65,000 units and participate in a much larger global pie using Bajaj's distribution network, as in the case of KTM. Bajaj has helped the Austrian motorcycle company build its global volumes from 65,000 units to 2 lakh.
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, Bajaj and Triumph said a joint statement.
Much like Bajaj Auto, Royal Enfield has decided to specialise and focus on the global mid-size motorcycle space (250-750 cc) to grow the brand. In the last four years, Royal Enfield has seen its annual sales grow five-fold -from 1.2 lakh units at the end of fiscal 2013 to 6.5 lakh units.
With incremental volume coming in from overseas markets, Royal Enfield is planning to produce 9 lakh units this fiscal year and it may cross the 1 million market next year.
Interestingly, Triumph almost a year back had pulled out of a planned Rs.850 crore investment in Karnataka for a manufacturing facility.With partnership talks taking a centre stage, it may utilize the facility of Bajaj to manufacture its smaller displacement bike for future.