Bajaj Auto, an exporter of motorcycles and three-wheelers is expanding its operations into Brazil by setting up its inaugural manufacturing facility overseas under the name Bajaj Do Brasil. Through this move, Bajaj intends to enhance its market presence, in the Latin America two-wheeler market while also propelling global growth.
Bajaj Auto, India’s top exporter of motorcycles and three-wheelers, is embarking on a significant venture by establishing its inaugural overseas manufacturing plant in Brazil. The move is being executed through its wholly-owned subsidiary, Bajaj Do Brasil.
This strategic decision comes as a means to tap into Brazil’s thriving two-wheeler market, which stands as the largest in Latin America. By gaining a local presence in the region, Bajaj Auto aims to gain invaluable insights into product development and customer behavior, further reinforcing its market position in the area.
Headquartered in Pune, Bajaj Auto has successfully expanded its reach to more than 90 countries, adopting a distribution-led model wherein local operations, including assembly, are managed by distribution partners. The proposed Brazil plant is expected to be situated in the Manaus Special Economic Zone in northern Brazil, with an initial production capacity of 20,000 units per month. The production is anticipated to commence within the next 12 months.
Additionally, besides manufacturing Bajaj models, the facility will also produce motorcycles for KTM AG, an Austrian company in which Bajaj Auto holds a 48% stake.
Notably, Bajaj Auto has formed a strategic global alliance with Triumph, a UK-based motorcycle maker, to collaboratively develop middle-weight motorcycles. Interestingly, Triumph already has its manufacturing presence established in Brazil.
According to Rakesh Sharma, the Executive Director of Bajaj Auto, Brazil presents unique challenges due to its size, complexity, and occasional unpredictability. To navigate these intricacies and ensure a more sustainable approach, Bajaj Auto decided to adopt a different business model and directly undertake business development in the country. The company is currently finalizing the investment plan for the upcoming manufacturing unit in Brazil.
The distributor model, which Bajaj Auto has successfully employed, allowed the company to combine its expertise in product, manufacturing, and brand development with the entrepreneurial energy and local knowledge of its partners. This synergy has been pivotal in enabling Bajaj Auto to achieve a leadership position in the market.
Latin America’s two-wheeler market has exhibited impressive growth, reaching 10.6 million units in 2022, as reported by the market research firm IMARC Group. The market is projected to further expand and touch 23.7 million units by 2028, reflecting a Compound Annual Growth Rate (CAGR) of 14.2%between 2023 and 20288.
