EXCLUSIVE: Bajaj Auto-KTM alliance readies adventure-touring bike to take on Royal Enfield

Bajaj Auto, one of the leading manufacturers and the largest exporter of motorcycles in India, along with its Austrian partner, KTM, has readied adventure-touring models for India and export markets.

The company, which kick-started a trend of street models in India with the Pulsar and took it a notch higher with KTM’s 200 and 390 Duke models, is now all set to popularise the upcoming adventure-tourer category in the midsize motorcycle segment.

With the upcoming KTM models, the company will take on Royal Enfield’s recently revealed, single-cylinder, 411cc Himalayan which is to be commercially launched on March 16, 2016.

Industry sources have confirmed the development of an all-new motorcycle platform, which is an adventure touring model under the Bajaj Auto – KTM alliance.

Autocar Professional learns that the company has developed the adventure model based on two engine options, which could be the single-cylinder, 375cc and the single-cylinder, 200cc engines that already power other KTM motorcycles on sale in India and other export markets.

“Bajaj Auto has developed a new, adventure bike platform under the KTM umbrella. The new model could come with two engine options. These are the ones that it manufactures locally at Chakan,” informed a source.

Reports suggest that KTM had started working on its adventure-touring project in entry level, small engine segments in 2011. It can be recalled that while talking to a leading Indian business news channel in 2012, Stefan Pierer, CEO and chairman of the executive board of KTM AG, had hinted at the development of a model for ‘tour-purpose’ for India.

“The 390 (390 Duke) is coming, fully faired versions (RC 200 and RC 390) and the so-called tour-purpose model are also coming. We will have the full model range that can settle in the Asian markets. We will focus more on the higher end, keeping the prime content of KTM very sharp, its ready-to-race attributes, its best performing engine, unique design different from others,” Pierer had commented then.

Another source pointed out that “the KTM adventure bikes are almost ready. Although it is not sure which engine option will come first, the model(s) could be commercially rolled out as early as April-May 2016.”

Bajaj Auto is known to introduce market disrupting products and creating its own niche by offering premium features at a more accessible price range. The launch of the 150cc Avenger and Pulsar RS 200 can be seen as examples of its aggressive product strategy.

That said, it is expected that the company will compete with Royal Enfield’s Himalayan with its KTM 390 Adventure and may find premium buyers initially. However, sources say that the company could roll out the 200cc version of the KTM Adventure to undercut the competition from its immediate rival to make this league of motorcycles more accessible with affordable pricing as well.

Additionally, the production of adventure models at Chakan also boosts the export prospects for Bajaj Auto, which has witnessed a decline due to a drop in demand from key markets such as Nigeria and Egypt to more mature markets. It is understood that the bulk of these current key export markets rely on revenues from the global oil industry.

The US, which is one of the largest markets for adventure motorcycles, could be one such lucrative export destination for Bajaj Auto in the near future..

Talking to Autocar Professional in the context of Bajaj Auto’s aggressive product strategy at the premium end, VG Ramakrishnan, managing director, Avanteum Advisors LLP, says: “That’s an area where it has worked hard and it makes sense if the company wants to protect its hold on it. The focus on the premium segment allows it to focus on profitability and the consumer shift towards the higher segment. Further, with manufacturing of new KTM models, its exports are also expected to pick up. However, these markets are very different, and we will have to see how this pans out in the near future.”

Giving his perspective on the company, Abdul Majeed, partner, Automotive, Price Waterhouse (PwC India), said: “For Bajaj Auto, which has its distribution network in place and has the knowledge of Indian consumers, the right products with the right pricing will define its prospects in 2016 and 2017. The company is not into scooters, so obviously it needs to be aggressive with motorcycles whether it is the 110cc, 125cc, 150cc or 250cc class onwards. The company will have to very clearly understand the changing customer preferences in order to continue tapping growth.”

“To unsettle Royal Enfield, you need to have a very strong product with a very good pricing. People buy RE bikes because they can be used for pleasure riding as well as daily commutes. Any upcoming product(s) has to be better than what is already there in the market. Therefore, bringing the right product to the market would be the key. The company should be able to put a good fight in the market in 2016-17 against potential rivals,” Majeed added.

Royal Enfield and Bajaj Auto together are expected to jointly create a new value addition in the motorcycle industry in the form of an adventure-touring category, which comes with a new set of attributes suitable for long-distance riding. Entry level engines such as 250cc to 500cc of displacement within the midsize category (250cc-800cc) powering the enduro (adventure-touring) platform could emerge as a popular option due to its multi-utility applications of long distance and city riding while delivering decent fuel economy.