The news of Bajaj Auto forging a partnership with Triumph came across as a surprise to most of us. Bajaj MD Rajiv Bajaj, a few days back had officially stated that the company was looking at options, and may come up with an announcement amounting to something big. Now, to think that it was only the partnership with Triumph that he was talking about would be wrong. The big man at Bajaj has clarified that his company, along with KTM was indeed pursuing a possibility of buying Ducati from the Volkswagen Group. However, the deal didn’t fall through as firstly, they figured that the Italian brand had too much of an overlap with KTM. Secondly, the valuation for Ducati was very high, which according to Mr Bajaj, was ‘beyond’ their ‘limited comprehension’. Apparently, Bajaj may have looked more seriously at Ducati if the brand was available for a ‘bargain’, though it was sufficiently clarified by the VW Group that Ducati was a premium brand with premium pricing and they were not looking for buyers who were hunting for a bargain.
In any case, what we have ahead of us is a very exciting prospect of seeing some low-cost, yet very well made Triumph motorcycles. Here’s most of the stuff you need to know about the newly formed Bajaj-Triumph relationship, summarized in 10 crisp points.
1. The broad outline of the new motorcycles to be developed is defined as a ‘premium, easy riding brand’ by the Bajaj MD. To break it down, that statement has Royal Enfield within its crosshairs with some Bonneville inspired styling and stance, and Bajaj inspired pricing.
2. Bajaj is looking keenly at the 300-500cc segment, which according to Mr Bajaj will see tremendous action by 2020 owing to new regulations which will mandate tech such as FI and ABS on every motorcycle. The industry pricing for the category, according to Mr Bajaj’s vision will be recalibrated and will leave a very little pricing gap between current and new players. The growth prospects for the segment, along with synergies between existing and new players, together create the big opportunity that the two companies aim to capitalize on.
3. While there’s currently no equity component in the deal with Triumph, the possibility of such an arrangement happening in future cannot be denied. Bajaj Auto is open to investment in Triumph, but that’s ‘not a prerequisite’ for the partnership, according to Mr Bajaj
4. Having pushed the sales numbers for KTM from a meagre 40,000 per year to over 200,000 in a few years, Bajaj is looking optimistically at the possibilities with Triumph. While they won’t spell any numbers, long term targets could be close to a million annual units for the new motorcycles, taking into consideration all markets.
5. The Dominar 400, despite being a premium offering from the Bajaj stable, would still be positioned low relatively. Bajaj products will continue to represent a very accessible price point, while the new products will straddle the gap between affordable and premium products, represented by the two brands.
6. The new products will likely be branded Triumph, will be made by Bajaj Auto and will sell in the dealerships of both Triumph and Bajaj, although there would likely be separate sections within the showrooms for the display of these.
7. The price points for the new motorcycles would ideally be between INR 3 to 5 lakh, wherein the products exist in a segment unrepresented by both the brands
8. Don’t expect aggressively styled, edgy products here. Retro themed machines with basic, but robust technology, is the brief here. Remember the words ‘premium and easy-riding’ – that means classic styling, coast-effectiveness and as little modern tech as possible.
9. Bajaj typically has a good turnaround time for its new products. It wouldn’t be too optimistic expect the first products to emerge by early 2020.
10. Mr Bajaj likes to think that an easy-riding, premium brand is the only missing position from their global motorcycle portfolio. We would like to think otherwise, though. Taken together, Bajaj, KTM and Husqvarna do represent a few segments, but there’s a lot missing there and the proposed motorcycles most definitely won’t make Bajaj a maker of all varieties of motorcycles.
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With inputs from ETAuto