Bajaj-Ktm Partnership Celebrates 1 Million Unit Production, Here’S All About This Collaboration

Rajiv Bajaj, MD and CEO of Bajaj Auto Limited, while speaking on the occasion, said that he was told never to go for a partnership with KTM as it was the weirdest-looking bike and that making KTMs may not be our cup of tea. However, the fact that the one-millionth KTM is rolling out shows that Bajaj could make high-technology motorcycles, he added. Bajaj also revealed that a team of designers from Kawasaki had come down to help us and endorse our partnership with KTM.

With this milestone, KTM also stated that it took less than half the time to hit the second half-million milestone than the first, indicating a meteoric growth in the brand’s adoption in the country. KTM entered the Indian motorcycling market with the launch of the 200 Duke in 2012, its first motorcycle to be manufactured in collaboration with Bajaj.

Stefan Pierer, CEO of Pierer Mobility AG, and Rajiv Bajaj, MD and CEO of Bajaj Auto Limited, at the roll-out of the milestone unit.

Apart from Bajaj, Stefan Pierer, CEO of Pierer Mobility AG, was also present were present at the company’s Chakan plant and recounted the journey of KTM in India and their collaboration’s global impact.

Pierer said, “At Pierer Mobility AG, we abide by our four pillars of success. These include operating as a global entity, innovating continuously, getting the right talent, and building distinct brands worldwide. Our position as a global mobility group is built on the right partners who are passionate about delivering excellence.”

The CEO of Bajaj Auto stated that KTM and Bajaj have motivated many other similar partnerships and have leveraged each other’s distribution. He said, “KTM has now become not just the largest motorcycle maker in Europe, but the largest premium bike maker in the world. A large part of this is because of the partnership with Bajaj Auto.”

Bajaj-KTM partnership

Bajaj Auto’s Chakan plant plays significant importance for KTM’s exports in the country as almost half of the Austrian manufacturer’s motorcycles were shipped to overseas markets. Bajaj Auto co-develops and manufactures several entry-level motorcycles under brands like KTM (125cc to 390cc) and Husqvarna (125cc to 401cc).

Bajaj Auto and KTM AG enter into a strategic alliance in October 2007, when it first acquired a 14.5 percent stake in the Austrian marque back in 2007. Eventually, the Indian two-wheeler manufacturer elevated its shareholding to Pierer Bajaj AG (PBAG) and becomes a 49.9 percent equity partner with Pierer Group (50.1 percent stake).

Rajiv Bajaj, in an exclusive interview with CNBC-TV18, said “We started with KTM in 2007, so it’s been 16 years. My mind goes back to what KTM was then and where Bajaj was then. KTM was a company that made about 65,000 motorcycles a year and I think now they are closing in on 400,000 motorcycles a year. And a very large proportion of that has come out of this partnership, which means designed, developed, made and sold out of India. So that’s how big this partnership has been for KTM.”

Pierer, while talking about the development, said, “Our constant drive to innovate and the ability to build strong brands across markets have found resonance with Bajaj Auto. Our success in this partnership gives us great confidence about the future, where we will expand our portfolio into electric and maintain our position as leaders in the powered two-wheeler industry,” he added.

Over the years, KTM India has established itself as the leading sports motorcycle brand through a pan-India network of more than 460 dealers. Initiatives like Pro-XP rides, which have seen 40,000 bikers participating in more than 400 events, have helped spread pro-biking and develop the racing DNA in India.

Bajaj further added, “KTM has gone on to a large measure on the virtue of this partnership, to now become not just the largest motorcycle maker in Europe in the premium segment, but the number one premier motorcycle maker in the world. So I think Stefan and team would agree that this partnership has been pivotal to building this success.”

He also stated that Bajaj, in 2007, had zero stakes in the premium space, whether in India or globally. “And now, it’s 1 million motorcycles in the KTM brand, apart from whatever we do ourselves with Dominar etc. So I think for both companies, it’s been tremendous. And if you look at the other partnerships that it has motivated between other Indian makers and other global makers, imitation is the best form of flattery. So I think it’s been well acknowledged.”

Future of Bajaj-KTM partnership

Bajaj hinted that over the next two to three years, the entire current lineup of the KTMs – that is the Duke, the RC and the Adventure – will all be very significantly upgraded. He also said that he’s open to the idea of bringing bigger KTMs to this market and from this market to other markets in the world.

“Husqvarna is the second important brand in the stable is already here. Of course, it is several years behind KTM in the Indian market, so it is still taking time to build but I’ve seen the news of Husqvarnas and they are absolutely beautiful. In fact, if I may say so, I like them more than I like the KTMs. So that’s something I’m looking forward to,” Bajaj added.

While sharing about the Bajaj-KTM collaboration’s electric mobility plans, he said that we are working together to develop electric powertrains for the future.

Pierer, on the other hand, revealed that Bajaj’s Chetak electric scooter will be exported to Europe beginning in 2024 and the company will sell the e-scooter without changing the name. He also revealed that 2024 will see the launch of the next generation of KTMs and Husqvarna.

While talking about the company’s move towards electric mobility, Pierer said, “KTM is a pioneer in electric mobility since 2013, but manufacturers are losing money, it’s a loss-making business because of high battery costs.” He added that the company is basically burning money in the electric vehicle segment currently and is still evaluating launching an electric motorcycle in India because of the high cost. Bajaj Auto and KTM are already working on a 48-volt electric power train, he added.

Bajaj has also partnered with British marque Triumph for the development of a range of middleweight bikes, and the maiden product has been spotted testing multiple times in India. KTM has recently acquired a 25 percent stake in the Italian bikemaker MV Agusta and this could potentially pave the way for the storied brand’s return to our shores, considering KTM will eventually take over MV Agusta’s distribution network.

Impact of FAME subsidies on EV

Bajaj stated that electric vehicles with FAME subsidies, low GST and state subsidies are on a life support system. He added that if FAME subsidies are ended, prices of electric scooters will immediately go up by 30 percent.

Bajaj added that while he’s not a big supporter of being dependent on subsidies, but needs immediate clarity on what will happen after March 31, 2024, when the government’s FAME subsidies end. He said, “One year’s notice for suspending fame subsidies is not sufficient for industry.”

“There is a case here for incentivising CNG vehicles,” informed Bajaj Auto’s CEO, while adding that EV subsidies should be used differently for creating an environment for EV adoption to take off. “Atleast the top 40 cities should have the right ecosystem for EVs to be adopted,” he added.