Bajaj Auto may set up assembly plant in Brazil

Bajaj Auto is planning to set up an assembly plant in a free trade zone in Manaus in Brazil next financial year.

“We are looking at setting up an assembly plant at a place called Manaus in Brazil in FY11. It is a Free Trade Zone,” Bajaj Auto Ltd’s Vice-Chairman, Madhur Bajaj, told reporters here today.

The company is in the process of studying the site and working out financial details, Bajaj said. He did not specify if the auto major was seeking a partner.

The country’s second-largest two-wheeler maker operates an assembly plant in Indonesia.

It has been mulling setting up of its plant in Brazil for over six-years now. Bajaj said, “One of our distributors has already set up a plant in Egypt. They are also looking to set up plants in Nigeria, Iran and Colombia.”

The company may also take up expansion of its facility at Waluj near Aurangabad, where it manufactures the Kawasaki range of motorcycles and three-wheelers.

“We have a lot of land in Aurangabad, which has scope for very major expansion. It is likely that (production of) commercial vehicles would go there,” Bajaj said.

Bajaj said expansion and upgradation, however, depended on how demand shaped up. “Demand has been going up but a lot also depends on government policies and whether banks ease the norms for two-wheeler financing,” he said.

Bajaj Auto had reported a 14.62 per cent increase in its motorcycle sales at 249,133 units in September. The company had sold 217,365 units in September last year.

This is significant as the auto major’s cumulative motorcycle sales during the first six months of this fiscal were down by 3.37 per cent at 10,82,368 units.

The company currently exports to over 30 countries in Latin America, Africa, the West Asia, South and South-East Asia. Exports account for one-third of the company’s total production, Bajaj said.