As the Austrian motorcycle brand KTM struggles to raise capital at home, the 17-year-old Bajaj Auto-KTM partnership in India is unlikely to be affected by this financial turmoil as operations are expected to continue as usual.
Bajaj Auto manufactures and sells two-wheelers for KTM and other brands from its factory near Pune, under an agreement with Pierer Mobility, which owns the troubled company KTM AG.
Notably, KTM filed for judicial restructuring proceedings on Friday with self-administration, as its management does not expect to be able to secure the necessary ‘high three-digit’ million figure funding.
“Indeed, this is an exercise to address the issue of expanded debt and liquidity. KTM AG has always been run as an independent company, though Bajaj is, of course, supportive. Various options will be developed by them over the next 90 days,” said a source privy to the matter, declining to be identified.
“The local India business of KTM, managed by Bajaj Auto, of products made and sold here is not affected and carries on as usual,” added the source.
The aim of the judicial restructuring proceedings kick-started by Pierer Mobility is to agree on a reorganisation plan with the creditors within 90 days. A redimensioning is intended to sustainably secure the existence of the KTM Group, the company stated.
A mail sent to Pierer Mobility remained unanswered at the time of going to press.
Bajaj Auto International Holdings BV (BAIH), the 100% subsidiary of Bajaj Auto, is the holding company for the equity stake held in Pierer Mobility. In FY24, BAIH, the biggest subsidiary of Bajaj Auto, contributed 3.68% to the consolidated net profit of Bajaj Auto of Rs 7708 crore.
Bajaj Auto has a capacity of 145,000 units per year at its Chakan factory, which is the second largest in the world and the biggest outside Austria.
During FY24, nearly 65,000 units of KTM motorcycles were sold in India and an unspecified number were exported to markets like the US, Europe, and the UK, in addition to the developing markets in Latin America.
KTM motorcycles, having engines ranging between 125cc to 390 cc compete in the premium, performance category, where the market leader is Royal Enfield. KTM is one of the largest brands in this segment in India. Its bikes are sold through a separate network channel set up by Bajaj Auto, where it also sells Triumph branded bikes.
