Bajaj Auto's First Overseas Facility To Start Production Within 12 Months
The Brazil plant, which can produce up to 20,000 units, will account for 4% of its overall motorcycle manufacturing capacity.
Bajaj Auto Ltd.'s first overseas manufacturing facility to be set up in Brazil will commence operations within the next 12 months.
The manufacturing facility, with a reported monthly capacity of 20,000 units, will account for 4% of the company's overall motorcycle manufacturing capacity.
"Our expansion and retail (in Brazil) have been constrained by supplies, for which we depend on contract manufacturing, a model adopted by most new entrants," Rakesh Sharma, executive director at Bajaj Auto, told investors in the June quarter earnings call.
"We believe removal of this supply constraint is key to our high level of performance in this important market, and taking note of this, the board has today approved the setting up of manufacturing by Bajaj Brasil in Manaus Special Economic Zone. We expect this capacity to come on stream in 12 months' time," he said.
The Pulsar-maker is facing headwinds on the export front due to various reasons in key markets.
The company's total exports fell 27% in the year ended March, with sales of motorcycles seeing a decline of 25%, while three-wheeler sales tumbled 41% in the overseas markets.
In the quarter ended June, total exports fell 34%, with a similar decline in motorcycle sales overseas.
Exports accounted for nearly half of the company's sales in the fiscal year ended March 31.
