Bajaj Auto to establish up first overseas manufacturing facility in Brazil
Monday, 31 July 2023, 10:34 IST
Bajaj Auto, India's biggest exporter of motorcycles and three-wheelers, is establishing up its initial overseas manufacturing facility in Brazil through its wholly-owned subsidiary Bajaj Do Brasil. Executive director Rakesh Sharma declared the local presence in Brazil, Latin America's biggest two-wheeler market, will help Bajaj Auto gain insights into developing products and customer behavior and strengthen its presence in the region.
Pune-based Bajaj Auto has a presence in more than 90 countries, where it follows a distribution-led model - the company's distribution partners manage local operations, including assembly. The initial capacity of the proposed Brazil plant, which is likely to come up in the Manaus Special Economic Zone in northern Brazil, will be 20,000 units per month, Sharma said, adding that the unit is likely to commence production in the next 12 months.
In addition to Bajaj models, the proposed Brazil facility will also produce the motorcycles of Austrian company KTM AG, in which Bajaj Auto has 48% stake. Bajaj Auto also has a global alliance with UK-based motorcycle maker Triumph for co-developing middle-weight motorcycles. The latter already has a manufacturing presence in Brazil.
Bajaj Auto to Set Up First Overseas Manufacturing Facility in Brazil
"Brazil is an exception due to its size, complexity, and sometimes unpredictability. It requires a longer-term staying power. So, keeping these factors in mind, we thought it was best to have a different business model and undertake the business development directly," Sharma told. The company has yet to firm up the investment plan for the coming unit, he said. The distributor model has enabled Bajaj Auto to merge its expertise in product, manufacturing, and brand development with the local partner's entrepreneurial energy and knowledge, and has worked well for Bajaj by allowing it to achieve a leadership position, said Sharma. Latin America's two-wheeler market reached 10.6 million units in 2022, according to market research firm IMARC Group. It has projected that the market will touch 23.7 million units by 2028, exhibiting a growth rate (CAGR) of 14.2% during 2023-2028.
Pune-based Bajaj Auto has a presence in more than 90 countries, where it follows a distribution-led model - the company's distribution partners manage local operations, including assembly. The initial capacity of the proposed Brazil plant, which is likely to come up in the Manaus Special Economic Zone in northern Brazil, will be 20,000 units per month, Sharma said, adding that the unit is likely to commence production in the next 12 months.
In addition to Bajaj models, the proposed Brazil facility will also produce the motorcycles of Austrian company KTM AG, in which Bajaj Auto has 48% stake. Bajaj Auto also has a global alliance with UK-based motorcycle maker Triumph for co-developing middle-weight motorcycles. The latter already has a manufacturing presence in Brazil.
Bajaj Auto to Set Up First Overseas Manufacturing Facility in Brazil
"Brazil is an exception due to its size, complexity, and sometimes unpredictability. It requires a longer-term staying power. So, keeping these factors in mind, we thought it was best to have a different business model and undertake the business development directly," Sharma told. The company has yet to firm up the investment plan for the coming unit, he said. The distributor model has enabled Bajaj Auto to merge its expertise in product, manufacturing, and brand development with the local partner's entrepreneurial energy and knowledge, and has worked well for Bajaj by allowing it to achieve a leadership position, said Sharma. Latin America's two-wheeler market reached 10.6 million units in 2022, according to market research firm IMARC Group. It has projected that the market will touch 23.7 million units by 2028, exhibiting a growth rate (CAGR) of 14.2% during 2023-2028.
