Bajaj could soon lose stake in KTM: How it’ll affect Bajaj-KTM in India

KTM has expressed interest in buying back the 48 per cent stake that Bajaj currently own, although at this point it is unclear what this means for their partnership in the Indian continent that spans manufacturing, export and sales!

By: | Published: March 22, 2019 12:15 PM

 

In recent years, Bajaj and KTM were one of the most beautifully symbiotic relationships in the two-wheeler industry. In India, KTM found a vast market for their lightweight motorcycles something that arguably brought the company back to a steady place in the global market without having to forgo their focus on motorsport. On the flipside, Bajaj gained a lot from KTM too, for one they gained better engine technology that they have put to use in the RS 200 and the Dominar 400. At present Bajaj Auto owns 48 per cent of KTM AG, the division that deals with the manufacture and sale of KTM Motorcycles, with some motorcycles being produced in India through their association with Bajaj. However, now it appears that KTM AGs parent company, KTM Industries has expressed interest in buying back the 48% that was previously held by Bajaj.

 

KTM Industries AG deals with KTMs other interests like the design and the manufacturer of Electric vehicles. At present, the majority stake in this company, as well as the majority stake in KTM AG (which owns KTM Motorcycles, KTM Components and Husqvarna), is held by the Pierer-Group. If Bajaj does agree to the transaction, this will mean that the Group will effectively have the full controlling stake in the company once again with 99.7 per cent stake in KTM AG. At present, it is unclear what this means for KTM in India although if it does go through it expected to happen over the second quarter of 2019.

 

We have reached out to Bajaj for some more clarity on what this buyback means for KTMs sale and manufacture in India and will post any updates as soon as we hear back. As of now, however, the move lines up with Bajaj’s MO in recent years where they align themselves with a company gain critical R&D and technology, and segment knowledge and then move on. Remember in the background Bajaj does have a tie-up with Triumph Motorcycles to make middle-weight cruise oriented middleweight motorcycles to take on Royal Enfield that is expected to come to fruition in 2020.

 

Prima-Facie, it would seem that if this buyback goes through the Piere Group will effectively gain KTMs 325 showrooms across India, and plans to bring that number to 500. KTM also is at present the foremost manufacturer of premium motorcycles in India with a market share of over 80%. A number that is likely to grow with the launch of the locally manufactured 790 Duke and the Duke 390 Adventure.

 

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