India’s leading exporter of motorcycles and three-wheelers, Bajaj Auto is launching its first overseas manufacturing center in Brazil as a stepping stone towards global expansion.
Rakesh Sharma, the Executive Director, elucidates that establishing a local foothold within Brazil’s borders provides a gateway to a trove of insights on product evolution and customer tendencies. This strategic venture aims to solidify Bajaj Auto’s presence throughout Latin America, fostering growth and fueling innovation.
With operations spread across over 90 countries, Bajaj Auto has remained a firm believer in the distribution-led model, entrusting local operations and assembly to distribution partners. Despite this, the labyrinthine market dynamics of Brazil necessitate a divergent approach.
“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 to ET.
Marked to grace the Manaus Special Economic Zone in northern Brazil, the forthcoming facility is anticipated to start churning out up to 20,000 units per month within a year. Alongside Bajaj’s models, the facility will also roll out motorcycles for Austrian company KTM AG, where Bajaj Auto is a significant stakeholder with a 48% share.
The company’s transcontinental alliance with the UK-based motorcycle producer, Triumph, is set to benefit from this overseas expansion. Co-developing middle-weight motorcycles stands as their joint venture, which could leverage Triumph’s pre-existing manufacturing infrastructure within Brazil.
According to an IMARC Group study, Latin America’s two-wheeler market swelled to 10.6 million units in 2022. Projections highlight a promising Compound Annual Growth Rate (CAGR) of 14.2% from 2023 through 2028, scaling the market to a staggering 23.7 million units by 2028.
In light of this burgeoning market, Bajaj Auto’s investment in a Brazilian manufacturing facility showcases a strategic commitment towards global expansion and a keen foresight to seize opportunities within high-growth markets. This initiative reinforces Bajaj Auto’s relentless pursuit of global dominance and its faith in the ascendant two-wheeler market.
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