Exclusive! Bajaj Auto eyes China market

Mumbai, January 3, 2014: Any OEM which harbours dreams to have a global presence should necessarily include China in its business plans. Bajaj Auto, which wants to play the global game, is likely to enter China – the world’s largest two-wheeler market – sooner rather than later. The company could enter China through a partnership with either Kawasaki or KTM. KTM, incidentally, is close to making a foray into China.

In an exclusive interview with Autocar Professional, Rajiv Bajaj, MD, Bajaj Auto, said: “Tomorrow, if KTM and/or Kawasaki establish a successful base there, the chances they can do that, especially KTM, are very high compared to Bajaj doing it because again KTM is very specialised. So automatically they will get some traction in the marketplace and when that happens, could we then follow in their slipstream and take advantage of that? Possibly, yes.” He added that definitely Bajaj Auto “would like to be present in China”.

China is a market that’s attractive in terms of sheer size. During January to November 2013, both production and sales of motorcycles in China exceeded 20 million units. That’s nearly double the Indian market’s sales volume of 10.08 million units during 2012-13.

The partnership strategy in international markets seems to be working for Bajaj Auto. After achieving success in the Philippines, the company is replicating the partnership with Kawasaki for Indonesia. Such a gameplan benefits both partners. While it facilitates a swift entry into a new market with less investment risk for Bajaj Auto, for Kawasaki the benefits come in the form of better footfalls in showrooms and better utilisation of production capacity where there is a manufacturing/assembly plant.

Bajaj is also clear that whether it is China, or any other new market, the business should be viable right from the start. “I don’t believe that you have to go to a new market and lose money for 5 years, 10 years and then make money,” said Bajaj. Before entering China, Bajaj Auto will enter Mongolia.

SUMANTRA B BAROOAH