Bajaj Auto all set to enter Brazil: Aims to expand global footprint

Bajaj Auto will compete with the Japanese automotive giants in the Brazilian market. The country's largest two-wheeler exporter already ships motorcycles to Latin America and the region accounted for around 15% of total export volumes in 2019-20. The markets include Argentina, Ecuador, Mexico, Peru, Colombia, Bolivia, Uruguay, Guatemala, Honduras and Nicaragua.

By:Published: June 6, 2020 1:33 PM
An entry into Brazil will expand the company's presence and diversify its global footprint. Bajaj will be competing with the Japanese automotive giants in the Brazilian market.An entry into Brazil will expand the company’s presence and diversify its global footprint. Bajaj will be competing with the Japanese automotive giants in the Brazilian market.

Bajaj Auto is all geared up to enter Brazil, the largest two-wheeler (2W) market in Latin America and the eighth-largest in the world. The company plans to have assembly operations, distribution, servicing and financing support in Brazil. With domestic market facing challenges, exports are expected to contribute more to Bajaj Auto’s recovery as some global markets have been relatively less impacted by the pandemic and lockdowns. An entry into Brazil will expand the company’s presence and diversify its global footprint. Bajaj will be competing with the Japanese automotive giants in the Brazilian market. The country’s largest exporter, Bajaj Auto, already ships its motorcycles to Latin America and the region accounted for around 15% of total export volumes in 2019-20. The markets include Argentina, Colombia, Ecuador, Mexico, Peru, Bolivia, Uruguay, Guatemala, Honduras and Nicaragua.

“We are constantly seeking to expand our global footprint in a meaningful way, and at the right time for us as we would like to keep strengthening our global business,” Rakesh Sharma, executive director (ED), Bajaj Auto said. Bajaj aims to develop a complete business in Brazil, encompassing assembly operations in compliance with local laws, a distribution network for sales, servicing operations, spare parts and retail financing support as well as customer engagement, Sharma said. The company’s plans are in the early stages and details are being worked out, he said.

The company has not directly exported to Brazil yet, but its vehicles made in Chakan, Pune, under the KTM brand, have been sold to Brazil through its strategic partner, KTM Austria, the ED said. According to Sharma, the Brazilian market for motorcycles is around one million units per annum. Bajaj will have some tough competition in the Brazilian market. Japanese majors, particularly Honda, have for long held a very strong position there, Sharma said.

Honda has been in Brazil for over four decades and has a market share of 80%, followed by Yamaha, Suzuki. Premium bike makers BMW, Ducati, Harley Davidson and Triumph also have presence in the market. Bajaj Auto’s motorcycles have been exported to emerging markets, based on oil- or agri-commodities and the company plans to increase market share at the global-level with its depth of experience and understanding of the global markets.

The company exported 2.17 million units to 79 countries in FY20. In FY19 total exports stood at 2 million units. In the first two months of FY21, exports were at 1.24 lakh units of the total sales of 1.65 lakh units. Exports are expected to exceed domestic sales for most part of this year. Around 47% of Bajaj’s exports were to Africa, 28% to South Asia and Middle East and around 14% to ASEAN. The company has plans to strengthen its presence in ASEAN. It has achieved the number one position in Philippines and is going to launch in Thailand soon.

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