In a recent revelation, Stefan Pierer, CEO of KTM has shared his vision of making KTM the number 1 motorcycle marker in the European market and India will be playing a key role to help KTM achieve that. Currently, the numero uno position is occupied by BMW motorcycles followed by KTM. The German automaker is headed for sales of roughly 105,000 units in 2012 while KTM comes close to it with 100,000 units. Compared to this, last year KTM achieved sales of 83,000 units. Bajaj Auto has been playing a key role in this growth story. 4 years ago when KTM sals has dwindled by almost 30% in the wake of global credit crisis, Mr. Pierer along with Rudolf Knuenz, who hold a controlling stake through a holding company entered into a JV with Bajaj Auto with a 47.27% stake.
Bajaj Auto’s production plant now produces half of the roughly 60,000 bikes that KTM sell in the European market. Commenting on this Mr. Pierer said, “We needed a strong back-up. And Rajiv Bajaj, managing director of Bajaj Auto, proved to be a great support. He told us not to worry and that Bajaj will stick by KTM.” Mr. Pierer was recently in India to attend a quarterly board meeting of the joint venture (one of the four quarterly meetings is held in India). He also added on the sidelines that with Bajaj, KTM has found a good base and a good relationship. Both the companies have jointly developed common engine platforms that both brands can use. This technology knowledge sharing has helped KTM to garner new market segments of smaller displacement bikes.
Similarly, on the other hand, Bajaj Auto has gained access to KTM’s know-how of high technology bike development. Now, with Honda coming in strongly in India, Bajaj Auto can use all our high-end technology to take on the Japanese. However some pundits are of the opinion that KTM’s growth, however, may come at a cost and dilute KTM’s equity in the off-road segment which is one segment where KTM has built a loyal, close-knit community. But KTM was not so well-known few days ago in India, in which case it doesn’t matter. All KTM needs is to keep the current pace of growth perspective.