KUALA LUMPUR: India’s Bajaj Auto Ltd (BAL), 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 BAL to provide technology transfer through the installation of an assembly line at a plant in Gurun, Kedah.
Sharma said the assembly hub should 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 BAL had in April entered into a collaboration to supply a selected a 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 BAL’s headquarters in Pune, India last week.
Thirty-five members of Modenas dealers and financial institutions, and 20 members of 19 Malaysian media organisations were in India last week to visit BAL’s plant and get a deeper insight into its operations, as well as to test-ride several Bajaj 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 BAL 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 in Bajaj brand,” he said.
In the region, he said BAL already has 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 BAL-Modenas collaboration has brought in three Bajaj models to Malaysia’s streets since May, namely V15 (café racer styling), Pulsar NS 200 (naked street bike) and Pulsar RS 200 (racer sports), at gross prices of RM5,650, RM8,700 and RM10,700, respectively.
In the early stages, Sharma said BAL wanted to first dominate the motorcycle market in Malaysia, as well as to continuously establish relationship with customers through best product and service offerings.
Sharma described Modenas as an extremely able partner, very open and always strives to improve performance to ensure success between both parties.
He was surprised Modenas was able to sell over 2,000 units of Bajaj current line up of three bikes and drove local market share to hit 35 per cent 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.
BAL motorcycles are already market leaders in their respective segments across 78 countries spanning Latin America, Africa, South Asia, Middle East and Asia Pacific.
For financial year 2017 (ended March 31), BAL’s operating earnings before interest, tax, depreciation and amortization (EBITDA) margin was 21.7 per cent of net sales and other operating income, which continues to remain the highest in the industry. — Bernama