In August 2017, Triumph and Bajaj entered into a partnership to jointly establish a presence in medium-displacement motorcycle segment which is dominated by Royal Enfield. While details of the Indo-British agreement is still being finalized, new information has surfaced.
As expected, Triumph Motorcycles will lead the charge in terms of design, research and development while Bajaj Auto will pitch in with its well established vendor base to keep the production costs very competitive.
Talking to Livemint, Shoeb Farooq, General Manager, Triumph India, has confirmed the alliance will develop mid-capacity motorcycles. He added that the final touches to the commercial agreement between the two entities are currently being made. The process is expected to be finalized in the next few months.
Farooq also stated that things are progressing well on the product side. Once the commercial agreement is finalized, work on distribution side of the business will begin. He also said that apart from India, the scope of the partnership would extent to right markets across the world. The official believes that the mid-capacity motorcycle segment holds promise in Latin America, South East Asia and Africa. It’s to be noted that Royal Enfield also has presence in these markets.
For almost two decades, Royal Enfield has been posting impressive growth rate in the Indian medium displacement segment and has established a near-monopoly. Even though the Indian retro-classic brand is currently experiencing a slowdown in growth, it enjoys an envious profit margin. Naturally, RE’s stellar performance has attracted both local and international brands to explore this segment.
The recently introduced Jawa Motorcycles (powered by Mahindra & Mahindra) has managed to get off to a strong start. Harley Davidson has also announced that it will be developing medium displacement motorcycles with an Asian partner in the coming years. The Triumph-Bajaj venture will also be focusing on this lucrative space.
In a recent interview, Siddhartha Lal, MD and CEO of Eicher Motors (parent company of RE) said that he is not too worried about the incoming competition since they have to work a lot harder to take away the pie from Royal Enfield. Front the customers’ point of view, competition between the big brands can only be good.