Bajaj-Triumph Partnership: New Products To Be Made By Bajaj Auto, Badged Triumph

Bajaj Auto and UK's Triumph announced a non-equity partnership to develop a range of mid-capacity motorcycles benefitting from key strengths on both sides. The new products will be badged Triumph, made by Bajaj, and sold by both companies across their existing global network.

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Highlights

  • The Bajaj-Triumph partnership sees no equity in play
  • The first bike will take two to three years to be developed and launched
  • The products will compete directly with TVS-BMW and Royal Enfield

Triumph and Bajaj were locked in discussions for a little over six months before making the announcement to partner with each other. The target quite simply is to allow Triumph to address a segment it currently does not operate in, while leveraging Bajaj's strengths as a low-cost, high-margins manufacturer. But what does this really entail in terms of products? The partnership sees no equity in play, and very clearly spells out joint development of a range of 'mid-capacity' motorcycles. In the Indian and largely global contexts that is the 250-500cc space, where Triumph currently has no products. It is also where BMW and TVS are focussing their attention when it comes to their partnership - and is the space that most global big bike brands are now eyeing with a view to enhance volumes and marketshare - and most crucially profitability - across the planet.

Also Read: Triumph and Bajaj Announce Partnership

The first bike will take two to three years to be developed and hit the roads. The development will also examine the potential to launch more than one product using similar aggregates. Design and engineering will come from Triumph say sources at the UK-based bikemaker, while Bajaj will play on sourcing and manufacturing strengths at its Chakan location outside Pune. Once the bikes are ready, they will be badged Triumph, and not Bajaj and shipped to customers in India and overseas. While the project will initially see a domestic focus, phase two of this rollout will see an acceleration on the export side. It is unclear whether Bajaj would get access to the jointly-developed platform to launch its own-brand bikes - though sources indicate this is currently not the case. The products will be sold in multiple markets - places where Triumph may or may not currently operate - using their combined network strengths.The products to come out of this partnership will compete directly with BMW-TVS and also Royal Enfield

This also includes using Bajaj Auto's massive network of 625 dealerships across 520 cities in India, to sell these new products. While it is too premature to say whether it will be a showroom-in-showroom concept, it is confirmed that the existing dealers for both brands will come into play. "Triumph will continue selling its more premium current line of products through its existing network, and shall also continue using its Manesar-based assembly operations to facilitate this portfolio." says Vimal Sumbly, Managing Director, Triumph Motorcycles India. He adds, "Triumph will share further details as it progresses with the partnership (with Bajaj)." This means that the current range starting from the 675cc Daytona, the 900cc Street Twin and topping off with the Rocket III with its massive 2.3 litre engine, will not be affected by the new alliance - at least in its current outline. And the bigger bikes will therefore be sold exclusively through Triumph's own network of dealerships - which today is spread across 16 cities. But it must be noted that these dealers will have access to the new mid-capacity range too.

Bajaj has played a key role in seeing KTM's global sales going from 65,000 units/year to over 200,000 now. Speaking to shareholders at the company's Annual General Meeting or AGM on July 19 2017, Rajiv Bajaj, Managing Director, Bajaj Auto had said, "If KTM and Husqvarna can do half a million motorcycles a year, believe me they (+ a new brand - then unnamed as Triumph) can do a million motorcycles together," And that is precisely what Triumph wants. Post the AGM, the company's CFO Kevin D'sa had also said, "There is an alliance around the corner. There is a statement we had made in the AGM that the two partners have by and large agreed on everything else. The lawyers are drafting the agreement. Hopefully there will be a signature on that." That signature has since dried on the partnership contract as we have reported. Rajiv Bajaj has also stated on numerous occasions that the only area Bajaj currently lacks in its global operations is a premium bike brand, since KTM is seen more as a purpose-built, sporty brand, and its Kawasaki partnership is all but done. The partnership with Triumph allows Bajaj access to just such a premium offering to bolster its position in the global motorcycle standings. Earlier this year, Bajaj was said to have been in talks to acquire Italy's Ducati from the Volkswagen group to also address the said gap.

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