Indian bike maker to make Malaysia regional hub

World's third largest motorcycle manufacturer to set up assembly plant in Gurun, Kedah, targeting large Asean market.

KUALA LUMPUR: India’s Bajaj Auto Limited, the world’s third largest motorcycle manufacturer, is keen to make Malaysia its manufacturing base as they seek to make inroads into the Asean market.

Its president of international business, Rakesh Sharma said plans were already in place for Bajaj to provide technology transfer through the installation of an assembly line at a plant in Gurun, Kedah.

Sharma said the assembly hub should be able to start operations in the next six months.

The plant belongs to DRB-Hicom Bhd’s unit, Motosikal dan Enjin Nasional Sdn Bhd (Modenas), where Bajaj had in April entered into a collaboration to supply a selected portfolio of street bikes.

“We are working out a manufacturing plan at Modenas’s excellent facilities. It shares some common similarities with our Aurangabad plant in India in terms of equipment.

“Common lineage (from earlier technology partner Kawasaki Heavy Industries) in manufacturing processes should be able to bring down costs. I would be delighted to start this operations in the next six months,” he told Bernama on the sidelines of a Bajaj-Modenas dealers’ meeting at Bajaj’s headquarters in Pune, India last week.

Thirty-five Modenas dealers and financial institutions, and 20 members of Malaysian media organisations were in India last week to visit Bajaj’s plant and get a deeper insight into its operations, as well as to test-ride several of Bajaj’s latest generation motorcycles.

Sharma said since Modenas already has good facilities, the next facets of collaboration should be in terms of knowledge transfer, component development, training and vendor alliance.

Eventually, Sharma said the Bajaj and Modenas collaboration could take the assembled bikes (in Gurun), as well as locally-manufactured components to the Asean and other international markets in stages.

“Modenas will be our manufacturing assembly hub. As the business opportunity arises, in Asean and other countries, we will get Bajaj motorcycles manufactured by Modenas under the Bajaj brand,” he said.

In the region, he said Bajaj already has a presence in the Philippines and Cambodia and next, it is planning to enter Thailand and Vietnam.

Sharma said the choice of Malaysia as a regional hub was because of its good business ecosystem.

The Bajaj-Modenas collaboration has brought in three Bajaj models to Malaysia’s streets since May, namely V15 (café racer styling), Pulsar NS200 (naked street bike) and Pulsar RS200 (racer sports), at gross prices of RM5,650, RM8,700 and RM10,700, respectively.

In the early stages, Sharma said Bajaj wanted to first dominate the motorcycle market in Malaysia, as well as to continuously establish a relationship with customers through best product and service offerings.

Sharma described Modenas as an extremely able partner, very open and always striving to improve performance to ensure success between both parties.

He was surprised Modenas was able to sell over 2,000 units of Bajaj’s current line-up of three bikes and drove local market share to hit 35% in the sports segment (150cc-250cc) in September, and expressed confidence that the target to achieve sales of more than 6,000 units until year-end could be achieved.

Bajaj motorcycles are already market leaders in their respective segments across 78 countries spanning Latin America, Africa, South Asia, Middle East and the Asia Pacific.

For financial year 2017 (ended March 31), Bajaj’s operating earnings before interest, tax, depreciation and amortization (Ebitda) margin was 21.7% of net sales and other operating income, which continues to remain the highest in the industry. - FMT