With a new range of global bikes being readied under its premium bouquet of KTM, Husqvarna, Triumph portfolio, the maker of Pulsar and Dominar is adding 1 million units of fresh capacity with a new investment of Rs 650 crore. This will take up the total capacity to 2.2 million units.
With new models and ample capacity, the company is confident of sustaining this double-digit growth momentum in the coming years.
The company’s high-end two-wheeler sales under the KTM, Husqvarna, Chetak and the Dominar brands grew by 24% so far during this financial year against a decline of 21% in the overall two-wheeler market, Rakesh Sharma, executive director at Bajaj Auto told ET.
“If you see the resilience of this end of the portfolio, even during Covid-19 it continued to grow. We believe premium motorcycles sales will continue to outpace non-premium sales, both in the domestic market and overseas,” Sharma said. “We are making a plant with a million units capacity, that shows our intent.”
To be sure, already a third of its total volumes come from premium motorcycles with an engine capacity of 150 cc and above. The higher share of big bikes and exports would only add to the company’s bottom line which has come off its peak of 20% EBIDTA in the last couple of years.
The new plant will manufacture KTM, Husqvarna and Triumph motorcycles as well as electric vehicles. Bajaj Auto has high expectations of its 250cc engine-capacity motorcycles across these brands and expects Triumph-branded motorcycles to add significant volumes once launched in 2023, Sharma said.
The Pune-based automaker has a technical collaboration with UK’s Triumph Motorcycles to develop and manufacture mid-size premium motorcycles for India and overseas markets.
On the electric end of the portfolio, Bajaj currently sells the Chetak electric scooter, the production of which will shift to the new plant. The company is also readying electric motorcycles with 4 to 8 watt and is in advanced discussions with KTM to manufacture EVs under the KTM brand.
“In a couple of years battery costs will come down and we will see a substantial market for Chetak in India as well as overseas,” Sharma said.
Once the new Chakan plant commences production, the company will have a total manufacturing capacity of 7.5 million units, of which 2.2 million in Chakan would be kept for the higher-end models including EVs.