MUMBAI, Nov 26: Bajaj Auto Ltd, India’s second-largest two-wheeler maker, and Japan’s Kawasaki Heavy Industries Ltd are collaborating on a new 125cc bike for the world and domestic markets, a senior Bajaj official said on Monday.

The new bike is expected to be marketed in India by Bajaj and in other countries by Kawasaki, the official, who did not wish to be identified, told Reuters.

“We hope to have something more concrete to announce by early next year,” the Bajaj official said, adding the bike is slated for launch in India by late 2003.

He said that Kawasaki has chosen to develop the new model with Bajaj as it did not want to manufacture such a bike in Japan, where many business costs are higher.

“If you look at wage levels alone, I would say the cost of producing bikes in India would be 20-25 per cent cheaper than Japan,” said Richard D’Souza, analyst at Sunidhi Consultancy SeTrvices. But he added that the difference would narrow if the cost of raising productivity to Japanese levels are considered.

Bajaj exported around 5,000 motorcycles in 2000/01 and hopes to increase that to 15,000-20,000 by March 2002.

Bajaj and Kawasaki have enjoyed a successful partnership since they joined hands in 1984 to sell bikes in India, the world’s second-largest motorcycle market.

Bajaj has raced away since then to become India’s second-largest motorcycle maker with a market share of around 25 per cent in 2000-01 compared to under 14 per cent in 1995-96.

Kawasaki has also gained, with the relationship giving it an opportunity to develop India as an export hub for motorcycles between 50-200cc.—Reuters