The Hindu Business Line : Bajaj to increase stake in KTM to over 25%

New Delhi, Jan. 10 Bajaj Auto Ltd (BAL) on Thursday said that it would be increasing its stake in Europe’s second largest power sports bike maker KTM to over the 25 per cent they are in the process of acquiring.

“We are in the process of acquiring 25 per cent in KTM after which the discussions for a further increase in stake would take place,” said Mr Rajiv Bajaj, Managing Director, Bajaj Auto, while announcing the company’s plans with the Austrian bike maker. Mr Bajaj, however, refused to disclose by how much BAL was planning to increase its stake.

Elaborating on the joint venture plans of the two companies, Mr Stefan Pierer, CEO, KTM, said, “Till now, we were in the off-the-road bikes segment. But with Bajaj, we are looking to jointly develop a high performance, water-cooled engine platform for 125 cc and 250 cc bikes.”

KTM has 38 per cent market share in off-the-road motorcycles in the US and 44 per cent in Europe. The company said that it was keen to introduce entry level bikes in association with Bajaj for the European market where the driving licence norms were undergoing a change and the market would soon open for youngsters above 17 years.

Bajaj would be rolling out two high-powered KTM bikes by the middle of the year. The joint venture products that the two companies plan to roll out would be on two platforms — 125 cc-180 cc and 250-400 cc, said Mr Pierer.

The jointly developed on-the-street entry level bikes would be primarily produced at Bajaj’s existing facilities without any additional investments or capacity expansion.

“We are looking at selling 200,000 bikes that would be jointly developed. Initially, we are targeting the domestic market and later will go in for exports,” said Mr Bajaj.

The €390-million Austrian company KTM plans to sell around 12,000 of these entry level bikes in Europe, and is targeting a slightly lesser number in Australia and Japan.

Bajaj-KTM bikes would be rolled out by 2010.

With regard to the sharing of the dealership network, Bajaj said that the company would be showcasing KTM bikes only at its company owned pro-biking showrooms. Currently, its bikes will not be retailed at KTM’s dealerships globally. But for the joint products that would be rolled out, there was likely to be a sharing of the marketing network.

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