Bajaj Auto plans to launch more models of its commuter sports bike Pulsar in Indonesia and also use the KTM platform to make higher powered motorbikes for the upper end of the Indian market.
In Indonesia, a largely step-through market, Bajaj Auto assembles the Pulsar 135. The company's sales jumped 81 per cent to 21,586 motorcycles in 2010-11 from 11,954 in the previous year. The loss was marginally down to Rs 11.2 crore from Rs 15.9 crore in 2010-10.
According to Bajaj Auto's 2010-11 annual report, the growth in sales was due to the Light Sports Pulsar 135. The product portfolio will be expanded with the Pulsar 220 in the first quarter of 2011-12.
Localisation of sub-assemblies
The Indonesian subsidiary has localised some of the assembly operations and would continue to pursue localisation of sub-assemblies this year. Custom duty rates for semi-knocked down (SKD) and completely-knocked down (CKD) operations have been reduced by five per cent from December 2010.
“With the addition of Pulsar 135 and Pulsar 220 to the model line up and with increased local sub-assembly operations, the subsidiary would be in a position to reduce its losses in 2011-12,” the annual report said.
Investments
However, the company has assessed the carrying value of investments made in the Indonesian subsidiary and made a provision for Rs 102.27 crore as the diminution in the value of investment. Bajaj Auto has so far invested Rs 137.82 crore in the Indonesian subsidiary PT Bajaj Indonesia.
On the alliance with KTM Power Sports AG of Austria, in which Bajaj Auto has invested €154 million for a 39.71 per cent stake, the annual report says it makes sense for the two companies to work together to produce common platforms for both KTM and Pulsar bikes for key emerging markets.
Platform KTM
KTM is Europe's second largest sport motorcycle manufacturer. “KTM is an outstanding brand whose products use top class technology and have been the world's off-road racing champions for the last eight years. The brands also have tremendous pricing power.”
Bajaj Auto's R&D team developed the first platform – KTM Duke 125 – and the product was manufactured at Bajaj Auto's plant in Chakan, Pune. The first consignment was shipped in March and has been well received. Bajaj will supply the bike for KTM world-wide in FY2012. The same platform will be leveraged to make higher powered motorbikes for the upper end of the Indian market. This is expected towards the end of FY12.