Leading two-wheeler manufacturer Bajaj Auto on Thursday increased its stake in KTM Power Sports AG, the second largest sport motorcycle manufacturer in Europe, to 20.89%. The company would raise it further to 25% over the next few months, said Rajiv Bajaj, MD, Bajaj Auto, who has also been inducted on the board of KTM.
The agreement with KTM covers development, technology, vendor-sourcing and distribution of street bikes for both the Indian and overseas markets.
Bajaj has funded the current stake increase from its internal accruals. In November last year, it had taken a 14.5 % stake in KTM for over Rs 300 crore through its 100% Dutch subsidiary Bajaj Auto International Holdings BV.As part of the deal, Bajaj will introduce a range of KTM bikes in the Indian market. The models, the 690 Supermoto, the 690 Duke, the 990 Adventure, the 250 EXC-F and the 990 Superduke, will be sold through Bajaj?s Probiking showrooms in key markets across the country. The two companies will also co-develop and distribute a range of products for both the KTM and Bajaj brands for Southeast Asia and Europe.
The alliance with KTM covers joint development of street bikes for both the Indian and overseas markets. The partnership will also jointly develop a high-performance, water-cooled engine platform for 125 -and 250-cc bikes. Bajaj Auto will also take up distribution of KTM products in South Asia.
Through this cooperation with Bajaj, KTM would extend its product portfolio for the future with a 125-ccm street product line, in addition to the present 1190-ccm, 990-ccm and 690-ccm platforms developed and manufactured in Austria.
Meanwhile, French car maker Renault would take a decision on a possible small-car project with the Bajajs within six weeks, Sylvain Bilaine, MD of Renault India, told reporters at the Auto Expo. At present, the company is conducting a feasibility study on doing business with the Bajajs.