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Business

India's Bajaj Auto ties up with U.K.'s Triumph to develop new motorcycle range

NEW DELHI (NewsRise) - India's Bajaj Auto on Tuesday unveiled a technology partnership with U.K.'s Triumph Motorcycles to develop a new range of motorcycles even as it scrapped plans to bid for Italian motorcycle maker Ducati.

India's third-largest motorcycle maker will make the Triumph brand of "mid-capacity motorcycles" that will be sold primarily in India as well as in Southeast Asia, Africa and Latin America, said Rajiv Bajaj, Bajaj's managing director. Triumph would offer the products in developed markets, he said.

The motorcycles would be manufactured at Bajaj's factory complex at Chakan in western India, Bajaj told a local television channel. He didn't elaborate on the product range.

"This should obviously be the most rewarding market for this relationship between Bajaj Auto and Triumph," he said, referring to the more than 11-million-motorcycle-a-year Indian market.

The alliance with Triumph, maker of the iconic Bonneville and Street Triple models, will help Bajaj gain access to the latest technology and knowhow for producing premium motorcycles.

Sales of high-end motorcycles are growing in India thanks to rising disposable incomes and introduction of models by companies such as Harley-Davidson, Suzuki, Yamaha, BMW, Aprilia and Honda.

Triumph, on the other hand, would be able to tap into the low-cost production capabilities of Bajaj to boost its sales in emerging markets, the companies said in a joint statement. Triumph sells about 65,000 motorcycles each year, compared with Bajaj Auto's 1.9 million motorcycles.

Bajaj produces motorcycles starting from the entry-level CT100 that has a 100-cubic centimeter capacity engine to the range-topping 373cc Dominar. Triumph entered the Indian market in 2013 and has an assembly plant at Manesar in northern India. It also has an assembly plant in Brazil, as well as manufacturing facilities in Thailand and the U.K.

The alliance between Bajaj and Triumph isn't the only one in India. TVS Motor and BMW are working on jointly developing motorcycles with less than 500cc engines. Hero MotoCorp, the country's top motorcycle company, has also announced plans to develop high-end motorcycles for the local market and overseas, while Royal Enfield has been producing mid-capacity motorcycles that are also exported to various countries.

Bajaj said "more than one" Triumph motorcycle would be produced at Chakan either at its existing factory or at a new plant. Bajaj is also producing motorcycles under the KTM brand at Chakan, which would be expanded with the addition of Husqvarna brand from next year.

Meanwhile, Bajaj, which owns a 49% stake in KTM of Austria, has dropped plans to pursue the acquisition of Ducati, the maker of the Monster and Panigale models. Volkswagen AG, which owns Ducati, has put the motorcycle maker on sale, drawing interest from major companies worldwide.

Bajaj said the company along with KTM had earlier expressed an interest in Ducati, but subsequently decided to pull out of the race as Ducati products had a close overlap with those of KTM. Also, the "money being talked about (for a potential transaction) was not logically justifiable."

According to recent media reports, five bidders have been shortlisted to buy Ducati, which includes Harley-Davidson and Italy's Benetton family.

--Santanu Choudhury

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