Betting big on the European market, the country’s second largest two-wheeler maker, Bajaj Auto Ltd (BAL) is planning to pick up majority stake in KTM, Europe?s second largest sport motorcycle maker. Last month, BAL had picked up 14.5% stake in KTM via its 100% Dutch subsidiary for around Rs 300-350 crore as part of a ?wide-ranging co-operation? arrangement. Subsequently Bajaj raised its stake to around 18%.
?We may consider picking up a majority stake in KTM Power Sports if the company’s promoters are willing to offload it as it would give Bajaj greater access to regulated markets of Europe where the company is yet to foray,? Rahul Bajaj, chairman, Bajaj Auto, said on the sidelines of India Economic Summit.
With around Rs 1,500 crore as reserve for expansion, Bajaj Auto is also looking at other possible buyouts. ?The company is eyeing other overseas acquisitions and is in talks with various firms for a possible takeover,? he said without divulging any details.
With the domestic motorcycles industry witnessing a slump in sales over the last few months and with no signs of recovery in the near future, Bajaj?s rapid expansion plans for the overseas market will help the company to compensate for the fall in numbers in the Indian market.
The alliance with KTM covers joint development of street bikes for both Indian and overseas markets. It will jointly develop a high-performance, water-cooled engine platform for 125 and 250 cc bikes. The engine platform will spawn several models ?? KTM will make KTM models and Bajaj will create Bajaj motorcycles.
The cooperation will help both Bajaj and KTM to access each other?s markets including South Asian and South East Asian countries. Not just this Bajaj will also undertake distribution of KTM products in India and South East Asia.
Interestingly, the cooperation between the two auto giants will also include product development, technology, vendor sourcing and distribution.