Bajaj seeks nod for plant in Pakistan

Bajaj Auto, the country's second largest auto maker, has sought Pakistan's permission to set up a production facility for motor cycles and three-wheelers in the country.

The application was made through Bajaj Auto's partner in the proposed venture, the Saigal family.

Sanjiv Bajaj, executive director, Bajaj International, confirmed the development. "We have applied to the Pakistan government through the Saigal family," he told Business Standard, adding that government clearance is expected within a month. Bajaj International is a part of the Bajaj group. Bajaj is spearheading the company's entry in Pakistan, which has no indigenous motor cycle as well as three-wheeler brands.

Although Bajaj declined to disclose the details of the proposed foray on the plea that "the Pakistan government's approval is pending", it is gathered that the production facility in Pakistan will make most of the components of motorcycles and three-wheelers while some minor components might be exported from India.

The project will be the first production base of any Indian company in Pakistan. At the same time, it will offer the Saigal family, which has wide business interests, ranging from banking to automobiles, to renew its relationship with India. The Saigal family left India during Partition. The youngest brother, who left last, had a rubber company in Calcutta till the early 1950s.

Sources close to the development said the Saigal family has a joint venture for motor cycle production with a Chinese firm, Qingqi. The family will buy out the Chinese interest in the firm and use the facility to produce Bajaj vehicles.

Pakistan has a small two wheeler market-in 2004 so far, 3.8 lakh two wheelers have been sold. Vespa of Italy and Honda of Japan sell two-wheelers in Pakistan. There is no three-wheeler maker. The Bajaj venture is expected to sell nearly 25,000 three-wheelers and 75,000 motor cycles in two-three years of operations.

Bajaj Auto has distribution network in 50 countries. It has a dominant presence in Sri Lanka, Mexico, Bangladesh, Columbia, Guatemala, Peru, Egypt, Iran and Indonesia.

In India, the company increased its market share in the first half of the current year from 23 per cent to 27 per cent. It recently launched the indigenously designed 125-cc Bajaj Discover mobike and plans to launch two gearless bikes.