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Bajaj Auto to invest Rs 650 crore to set up new plant in Maharashtra

The facility is expected to commence production in 2023.

December 22, 2020 / 08:20 PM IST
Rajiv Bajaj (REUTERS/Anindito Mukherjee)

Rajiv Bajaj (REUTERS/Anindito Mukherjee)

 
 
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Bajaj Auto, the country’s third-largest two-wheeler manufacturer, has announced the signing of a memorandum of understanding with the Maharashtra government for setting up a factory that will make the Chetak and KTM, Husqvarna and Triumph motorcycles.

The proposed investment for this new facility, which will come up next to Bajaj’s existing facility at Chakan near Pune, will be Rs 650 crore. The unit is expected to commence production in 2023.

The announcement by Bajaj Auto comes at a time when its rivals like Honda Motorcycle and Scooter India and Suzuki Motorcycle have adopted a ‘go-slow’ approach as far as new investments are concerned. Market leader Hero MotoCorp, however, had announced a Rs 10,000 crore investment over 5-7 years towards new products and manufacturing facilities.

“Under the arrangement, the Government of Maharashtra will facilitate Bajaj Auto in obtaining necessary permissions/ registrations/ approvals/ clearances/ fiscal incentives etc. from the concerned departments of the state, as per the existing policies/ rules and regulations,” said Bajaj Auto in a statement.

The existing Chakan facility produces the same brand of two-wheelers except the proposed motorcycles under the Triumph brand. Bajaj Auto and Triumph Motorcycles are working together on a range of mid-capacity bikes the first of which will debut in 2022.

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The Indo-British collaboration will explore the 200-750cc bike category to offer multiple product options across different segments. The starting price range of these bikes could be below Rs 2 lakh.

KTM partnership

Bajaj Auto holds around 48 percent stake in Austrian bike making company KTM. The 13-year-old partnership has made the Austrian company the world's biggest premium bike manufacturer, beating US heavyweight Harley-Davidson (in volumes) in 2018 and 2019.

From worldwide volumes of 280,099 units clocked in 2019, KTM is expecting to sell around 400,000 two-wheelers in 2022. This will include nearly doubling of production at Bajaj Auto’s Chakan plant to 200,000 units, from around 108,000 units at present. This will include a mix of joint products (of KTM and Husqvarna bands) and KTM products distributed by Bajaj on a licence fee model.

The two companies have also started work on electric two-wheelers. The first of such e-bikes having power range between 3 and 10 kW (48 volts) will roll off the Chakan production line. The platform will support various product variants under the brand of both the partners.

KTM is developing a 4kW electric scooter under the Husqvarna brand whose market launch is expected to take place in 2021. This will be followed by the launch of Husqvarna E-Pilen, a 4kW/10kW, fully electric motorcycle with a modular battery system. The Husqvarna E-Pilen is expected to be launch-ready in 2022.
Moneycontrol News
first published: Dec 22, 2020 08:20 pm

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