After days of speculations surrounding the sale of Ducati and Bajaj being the one to buy it, a big announcement came through today. Bajaj Auto entered into a non-equity tie-up with Triumph Motorcycles of UK to make mid-range motorcycles. Now before we dive further into the details of this, let me make it clear that Bajaj is still not out of the race to buy Ducati and the deal with Triumph is independent of it. So we could still see Bajaj being the proud owner of the iconic Ducati brand. That said, let's get straight to the details of the tie-up with Triumph, which came out of nowhere. Rajiv Bajaj had stated an interesting alliance to be announced but no one expected Triumph to be the other partner. Now that we know they are going to co-develop and sell motorcycles, let us analyze what is it that you as a buyer can expect to buy in the next few years.
'Mid-range' is the keyword in the company release and while both brands have not disclosed anything else about the type of motorcycles they'll make, it's not a very hard guess and here's why. The new range of motorcycles will in all likelihood be manufactured at Bajaj's plant in Chakan, Maharashtra. Benefiting from Bajaj's well-established network of suppliers and scale of manufacturing, it'll be possible to maintain competitive pricing. Triumph, on the other hand, will provide technology and design inputs for the new motorcycles.
What type of motorcycle to expect?
Now, what type of motorcycles are we talking about? Sports segment is out of the question as Bajaj already makes KTM at its Chakan plant and considering the stellar sales performance of KTM in India, there's no reason why Bajaj would want to overlay similar products and confuse the buyers. In addition, there's Husqvarna as well, which will soon come to India. So what does that leave us with? In case you just murmured Royal Enfield or Bullet, give yourselves a pat on the back.
Royal Enfield's runaway success did leave most companies awestruck globally but there wasn't much they could do as they simply didn't have a product to take on the legendary Bullet. Soon though, companies realised that the number of buyers in this space kept growing at a phenomenal pace and Honda was the first global company to openly declare a motorcycle aimed at competing with Royal Enfield. Triumph and Bajaj too will most likely make motorcycles displacing between 300 to 600 cc, which is the stronghold of Royal Enfield right now.
So what you should expect from this tie-up is a mini Bonneville kind of motorcycle that will most likely be powered by a range of single-cylinder engines to keep cost in check. Expect the 'Bonneville' brand to be used on the new range as it is important to have a brand with the legacy to take on the Bullet. Considering Bajaj's ability to price KTMs way below expectations, it'll be safe to expect the new Bajaj Triumph bikes to be priced aggressively and not too far away from the Royal Enfield prices. However, do not expect these bikes to undercut Royal Enfield prices like KTM, which mainly went up against the locally-assembled competition. In this case, though, it's local manufacturing on both ends so the chances of a significant gap in prices are slim.
What's in it for the companies?
Quite simply, more sales and more money but for Bajaj specifically it'll be a big development as Rajiv Bajaj has had his eyes on the Royal Enfield segment for a while now and he was quite vocal about it at the launch of the Dominar 400 also. Over the last few years, Bajaj has pursued higher profitability instead of volumes and a strong presence in the 300-600 cc cruiser market will be in line with the company's approach.
For Triumph, this development will mean introduction into an all-new low-displacement segment, which in turn will allow the British brand to grow significantly in terms of volumes, similar to the growth KTM witnessed after Bajaj bought a stake in it.
What about Royal Enfield then? First, the company should be glad that it dominates a segment that global brands are now waking up to in pursuit of growth. At the same time, the Chennai-based company should also be worried as no competition till now meant they could get away with quality and technology issues. With the Bajaj and Triumph tie-up and Honda now in the picture, things could be quite different as all three companies are well-respected for their technical capability in their respective segments of operation. Royal Enfield will also need to look at a faster pace of introducing new models in order to keep new competitors in check.
The middle-weight cruiser category is all set to witness tremendous action over the next few years and the single-largest winner is going to the consumer. Consumers presently lack choices in this segment but soon, you might have multiple global products to choose from, which won't necessarily burn a hole in your pocket. Whether or which company becomes successful or not will take a few years to be known as we expect Bajaj and Triumph to be ready with their new bike in the next two to three years and Honda too will be ready only by 2020. However, what I can assure you of is temperatures soaring in the Indian premium cruiser motorcycle segment and for a rider that only means better and well-priced motorcycles to ride.