A new motorcycle is in the offing to be crafted by KTM Power Sports AG of Austria. The bike will be shaped by Bajaj Auto to be in the shield of nearly four times better than the net range dealt by KTM. According to KTM’s Chief Financial Officer, this bike in 125cc range also to be accorded the status of X-Street, is likely to hit the roads by next year end at 40K units per annum. The marketing venues will include potential areas like Brazil, he added.
But the Indian scenario for this KTM is exorbitant at an annual yield of 1lakh – 2 lakhs, said Bajaj information. This sale will cover lands of India, Pakistan and majority of Asia only to share the royalty with KTM. The FY 2009 (till August) was a solid phase for KTM with a sale of 30-plus model machines along with other street bikes fetched 62000 units. This compensated well to the previous year’s dip of 30%. X-Street will come to please the youth blending KTM’s design and quality as carried out by Bajaj. The pricing will be competitive in Europe(4000 Euro) on par with the Japanese counterparts. However, the bike is in slow pedal in Europe, compared to Asia and Latin America.
KTM believes that the sale will boost with the entry level machine and 250cc version since there has been no sign of growth in the existing ranges, acknowledges KTM. Hence its bid to enter into tie-up with Bajaj in India and nod for new models. This could end up with Bajaj claiming its share, in the event of rights issue, to 36% from the current 31.72%.
The media claims of Bajaj taking over the KTM is entirely refuted by both the companies since Bajaj knows what KTM has up in its sleeves. Further, KTM is not in a hurry to shell out its identity to the Indian company. KTM just wanted to revive its critical stature, arose out of financial downfall- a debt mounting to 320 million Euro in February 2009. As of now the company has reduced it to 240million Euro.
It is quite strange to know that KTM is evoking remedial measures by employing manual make of many parts in its unit in Austria. This was effected as a result of lay off of employees from 2200 to 1600. The company is slowly recovering its crisis and the performance in the Q1 of FY 2009-10 was totally a gruesome phase. Still, the revival measures yielded good show with sale profit of 3.6million Euro against the previous year’s loss of 27.9 million Euro. KTM seeks the fuel of Indian company Bajaj to run long roads in its journey.