Bajaj likely to build a new manufacturing plant for Triumph model

Bajaj Motorcycles is planning to setup a new manufacturing plant that will produce the motorcycle that will come out of the Bajaj-Triumph alliance. 

This facility is expected to come up in the vicinity of Bajaj’s Chakan plant. The company feels that the current plant won’t be able to handle volumes in the future. The production of smaller Husqvarnas will also be moved from Austria to this plant. As a part of the groundwork for this transition, Bajaj has already acquired a land for this facility. The company is yet to decide on the investments and the capacity of this new facility, but it is likely to be public in the next six months. Bajaj has most of its suppliers around its Chakan facility, which cuts down the transportation time and also helps in overall supply chain efficiency. 

The Pune-based manufacturer will likely launch it in the next two to three years. It aims to generate enough volumes to give a tough competition to current segment leader, Royal Enfield. In order to cater to the domestic and export demand, it made sense for Bajaj to invest in a new plant. Currently, Chakan plant manufactures all KTM bikes and some of the Pulsar and Avenger products, thanks to its six production lines. While KTM has two dedicated assembly lines, the rest are flexible and can be interchanged with other products depending on the demand. Another major reason Bajaj chose Chakan is because of its proximity to Nhava Sheva port in Navi Mumbai. This new model will be exported worldwide and being close to a port is very important. 

While we understand that investing in a new plant is a big step, it is likely that Bajaj-Triumph alliance will have more than one motorcycle in the future. The cost of investment needs to be justified and that will only come from volumes. So have one platform, built different bikes around it and take advantage of component sharing. Bajaj clearly knows this mantra. 

Source : Livemint & CNBC TV 18