Bajaj Auto to set up first overseas manufacturing facility in Brazil

economictimes.indiatimes.com:

Bajaj Auto, India's largest exporter of motorcycles and three-wheelers, is setting up its first overseas manufacturing plant in Brazil through its wholly-owned subsidiary Bajaj Do Brasil. Executive director Rakesh Sharma said local presence in Brazil, Latin America's biggest two-wheeler market, will help Bajaj Auto gain insights into product development and customer behaviour and strengthen its presence in the region. Pune-based Bajaj Auto has 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 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. «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 ET. The company has yet to firm up the investment plan for the upcoming unit, he said. The distributor model has allowed Bajaj Auto to combine its expertise in product, manufacturing and brand development with the local partner's entrepreneurial energy and knowledge, and