Bajaj enters Indonesia bike market

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Jakarta: India's second-largest motorcycle maker, Bajaj Auto Ltd, rode into Indonesia's $6 billion bike market with its flagship model on Thursday, and plans to set up a regional production base in Southeast Asia's largest economy.

Bajaj Auto, which also makes scooters and three-wheeled motorised rickshaws, launched the 180cc Bajaj Pulsar, and said it would invest $50 million in Indonesia, the world's third-largest motorcycle market, over the next three years to set up a production base and distribution network.

"In the first phase, we will focus on customer satisfaction. The second phase would be to set up a local manufacturing facility and the third phase is to make Indonesia the hub for the Southeast Asian market," Executive Director Sanjiv Bajaj said.

He said the company may also expand in other parts of the world, including South America, where it could set up a production base.

K S Grihapathy, president director of Bajaj Auto Indonesia, said the company initially aimed to sell 100,000 motorbikes in Indonesia in two years. Many global motorcycle firms such as Honda Motor Co, Suzuki Motor Corp and Yamaha Motor Co Ltd already have production facilities in Indonesia.

The world's fourth most populous nation offers huge potential as there is currently only one motorbike for every seven Indonesians versus one in four in some neighbouring countries.

Sales have jumped to a record 5.1 million units last year from under 1 million units in 2000, but the industry has been dented this year by high interest rates and inflation. Motorcycle sales fell 20 per cent in January-September, though industry experts predict sales will top 5 million again next year as interest rates are cut and inflation eases.