Bajaj Auto has entered into a non-equity deal with Triumph, a UK-based automaker.
Bajaj Auto has inked a strategic deal with the UK based player Triumph. The shares of the company closed at Rs 2,920 up by more than 1% since the previous close. The new deal comes in at an opportune moment, as the Bajaj stocks have had a poor run in the markets this year. The stock is up by 9% in year to date terms. Comparatively, BSE Auto and BSE Sensex are up by more than 20% in the year so far.
“The objective of this non-equity partnership is to deliver a range of outstanding mid-capacity motorcycles benefiting from the collective strengths of both companies,” said a joint press release from the two automakers. The statement went on to say “We hope to bring to bear upon global markets the individual strengths of the partners including brand position and perception, design and development technology, quality and cost competitiveness and worldwide distribution”.
Triumph is a UK based player with 700 dealerships across the world. According to a CNBC TV18 report, the deal will give access to global market for bajaj, and also go up the value chain.
Rajiv Bajaj, the managing director of Bajaj Auto said that they will use the Chakan facility to produce Triumph, and export it to Europe and Africa. The company is also targeting countries in the ASEAN.
For Triumph, the deal will help to expand its global reach by entering new higher volume market segments, especially within the emerging markets across the world. In the luxury segment, Bajaj has KTM, so it will be interesting to note the pricing of Triumph bikes. The new bikes developed from this partnership are expected to be priced competitively, and in the mid-size segment and will target emerging markets like Asia, South East Asia and Africa, apart from developed markets like Europe and the US. As per the statement, Bajaj will gain access to the iconic Triumph brand, and its great motorcycles, enabling it to offer a wider range of motorcycles within its domestic market and other international markets.