Bajaj Auto has inked an alliance with Kawasaki Heavy Industries, under which Bajaj motorcycles will be assembled and sold in Indonesia through the latter’s distribution network as co-branded products.
The BAL board accorded its approval to the deal this morning, while the KHI had approved it on September 12.
The first product under this alliance will be the newly launched Bajaj Pulsar 200 NS and shipments to Indonesia will begin in the middle of 2013, Rajiv Bajaj, Managing Director, BAL said. The bikes will be made in India and assembled overseas from SKD units.
Bajaj already exports variants of the Pulsar to Indonesia and has sold nearly 50,000 units here over the years. But given that the big four Japanese bike makers have a virtual stronghold over this 0.5 million units per annum market, the company required an entry strategy that was sustainable, Bajaj explained, adding “otherwise you can make a lot of losses.”
Bajaj and Kawasaki have had a similar partnership in the Philippines since 2004, and together command 45 per cent market share here. After Indonesia, the Indian company hopes to extend such a marketing arrangement to another six to seven markets globally, including Brazil, in the next 3-5 years’ time.
Elaborating on BAL’s strategy, Bajaj said it was clearly to stay specialised. “We have decided to be a global company and sell motorcycles all over the world. We want to stay in a narrow band as far as products are concerned,” he said.
Speaking at the company’s AGM here in July, Bajaj had told shareholders that the company wanted to achieve 10 million units in annual sales by 2016 and estimated that 50 per cent or more of this would come from exports.
Last year, Bajaj Auto sold 1.2 million motorbikes in overseas markets, representing 70 per cent of total motorcycle exported from India. In every market where sales exceed 10,000 units, the company sets up assembly units, Rakesh Sharma, President, International Business said, adding that the company has 14 such units so far in Africa, South Asia and Latin America. It is in the process of setting up six more in Kenya, Tanzania, Ethiopia, Egypt, and two more in West Africa.