Bajaj sets high hopes for Southeast Asia with Modenas partnership

KUALA LUMPUR, 2 Oct 2017: 

India’s Bajaj Auto Ltd – the world’s third largest motorcycle manufacturer – is keen to make Malaysia its manufacturing base as the firm seeks to make inroads into the Asean market.

President of International Business, Rakesh Sharma, said plans were already in place for Bajaj 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 Bajaj 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 said at the sidelines of a Bajaj-Modenas dealers’ meeting at Bajaj 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 Bajaj’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 Bajaj 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.”

In the region, he said Bajaj 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 Bajaj-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 Bajaj 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% 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.

Bajaj motorcycles are already market leaders in their respective segments across 78 countries spanning Latin America, Africa, South Asia, Middle East and Asia Pacific.

Meanwhile, Modenas plans to introduce two more models from its collaboration with Bajaj in the first quarter of next year.

Chief executive officer Amirudin Abd Kadir said while the sports tourer Dominar 400cc has been almost confirmed as one of the models, Modenas also mulls a utility bike – the Boxer 150cc for the Malaysian market.

“The street bike fresh segment is expected to enhance Modenas sales and market share moving forward.”

Based on overall Malaysia’s two-wheeler total industry volume (TIV) circa average 450,000 units, he said Modenas might ended up this year with a market share of 9% or more than 51,000 units from the moped, scooter and the new street bike segment sales.

He said Modenas aimed to capture 13-14% market share of the TIV next year, which might be equivalent to about 70,000 units, including sales from Bajaj bikes.

The moped segment had all this while contributed the biggest chunk of Modenas market share to the TIV, he said, adding that a survey showed that Malaysian riders who purchased moped preferred having a carrier/basket on their bike for convenience’s sake.

“But we’ve got to drop three of our moped models this year due to the Euro 3 regulation. We hope with the new street bikes models that Modenas brought in, they can change the mindset of Malaysians from moped to street bikes. That is a challenge for us.”

– Bernama

Leave a Reply