Bajaj Auto Ltd said it has bought a 14.5 pct stake in Europe’s second-largest sports motorcycle maker KTM Power Sports AG for a sum of Rs300 crores. Bajaj acquired the KTM stake through its wholly owned Dutch unit, Bajaj Auto International Holdings BV. Bajaj and KTM also signed a cooperation deal. Under this deal, the two companies will jointly develop engines and share each other’s dealer network. Under this agreement, KTM will provide the know-how for joint development of the water-cooled 4 stroke 125 and 250 cc engines, and Bajaj will take over the distribution of KTM products in India and some other Southeast Asian nations. These engines will be used by the KTM for the future with a 125-ccm street product The joint developments will also be available as basis for Bajaj products. Also Bajaj and KTM will jointly develop new vehicle platforms through this deal. Bajaj will entail its chakan manufacturing plant for the manufacturing KTM’s products. Bajaj will get access 720 KTM dealers in Europe through which it can retail its products.
Stefan Pierer, CEO of KTM, while welcoming the Bajaj participation said: “The executive board of KTM Power Sports AG appreciates this measure and sees in the co-operation a great chance to strengthen the KTM Group in its sustained growth strategy in a global environment.”
Rajiv Bajaj, CEO, Bajaj Auto, said: “KTM’s sharp brand positioning, differentiated designs, and hyper performance have inspired Bajaj to invest in this participation. Bajaj is delighted with this opportunity to co-develop a range of products for manufacture by Bajaj for both KTM and Bajaj brands. Equally, Bajaj is excited by the prospect of introducing KTM products to India and South East Asia as also to access the European market via KTM. Bajaj is confident that this co-operation represents a long term win-win situation given the entirely complementary and conflict free nature of the partners in brand positioning, market presence, product plans and supply chain structure.
About KTM:
The Austrian KTM was founded in 1934. In 1992 KTM was divided into three companies 1)KTM Sportmotocycles AG 2) KTM Fahrrad GmbH (Bicycles) and 3) KTM Kühler GmbH (Radiators). KTM is the first motorcycle manufacturer to include both front and rear disc brakes on an off road motorcycle. KTM is listed on Vienna’s stock exchange and reported revenues of 599.1 million euros in the previous business year. Through this deal with the Bajaj, KTM will be in a position to offer innovative premium entry models in the street segment. (The introduction of the new EU driving licence allows riding of 125-ccm motorcycles with a car driving licence in all EU member-states).