Bajaj Auto eyeing Brazil and ASEAN nations to expand its Kawasaki venture

Wednesday 19 September 2012, 11:28 AM by

Banking on its successful tie-up with Japanese partner Kawasaki in Philippines, Bajaj Auto is looking ahead to introduce the business model in Brazil and other ASEAN countries. The regulating authorities of both the auto companies have approved the proposed venture in the third week of September 2012.

In Philippines, together Bajaj and Kawasaki kicked off their operations in 2004 and have grabbed a market share of 45 per cent till now. The Managing Director of Bajaj Auto, quoted, “Between the developed and developing markets, there are these smaller markets where our bikes are extremely relevant. We believe Bajaj and Kawasaki have reached a right (business) model in the Philippines.”

The model introduced in Philippines will be now showcased in Indonesia by mid 2013. Under this programme, Bajaj designs and develop motorcycles in the Indian Territory and then delivers them to Kawasaki, which further configures them according to the local regulations. The motorcycles are then introduced in the markets under the moniker of Kawasaki-Bajaj.

On a broader level, the move results in a decent capacity utilisation for both auto companies. On the part of Bajaj, the company fully utilises its production capacity, whereas for Kawasaki it is an utilisation of distribution capacity. In 2011, the domestic player shipped around 1.2 million bikes and the auto maker has a production potential to manufacturer four million units yearly. The exports revenues of the company account nearly for one third of its total revenues.

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