Bajaj may set up manufacturing unit in Brazil

Bajaj Auto has zeroed in on Brazil for its second manufacturing facility outside India. The company's only other unit abroad is in Indonesia and will be operational by the end of this year.

Sanjiv Bajaj, executive director, Bajaj Auto, confirmed the company's plans to set up a manufacturing unit in Brazil. "Bajaj Auto plans to set up an integrated manufacturing facility in Brazil to cater to the South American markets," he told Business Standard.

However, this venture may not get moving immediately as the company first wants to strengthen its presence in Indonesia and the neighbouring markets.

Bajaj pointed out that the exact mode of entry - whether Bajaj Auto would go it alone or with a local partner - had not been worked out yet.

Though he declined to comment on the investment required, industry sources said the company would need to invest at least Rs 300 crore (Rs 3 billion) initially to set up a manufacturing base in Brazil.

At present, Bajaj Auto has a marginal presence in Brazil, which has a market for one million two-wheelers.

The company, however, exported more than 70,000 two and three-wheelers to other South American markets including Colombia, Guatemala and Peru last year.

Industry sources said the company might also set up assembly units in Argentina, Thailand and Malaysia. However, Bajaj said nothing had been finalised yet.

Incidentally, Bajaj's domestic rival TVS is also in talks to enter Brazil through a joint-venture assembly unit. It has already finalised setting up of an assembly joint venture in Colombia.