Bajaj ups KTM stake to 25%

Two-wheeler major Bajaj Auto has hiked its stake in Austrian motorcycle manufacturer KTM to 25 per cent from the current 14.5 per cent.

The company has said that the Bajaj pie in KTM would go up further soon. KTM is part of Cross Industries AG.

It was only last November that the two motorcycle manufacturers had entered into a cooperation arrangement. Bajaj Auto Limited had then picked up 14.5 per cent stake in the Austrian company from open market. The arrangement has been such that the two companies would jointly develop high-efficiency bikes, sourcing for production and assembling of KTM bikes in India.

It was agreed upon that the jointly developed bikes would be produced at Bajaj Auto’s manufacturing facility at Chakan near Pune. These motorcycles would then be exported in large numbers to Europe under the KTM branding. It was also decided that the commuter version of the motorcycle built on the same platform had the potential to be sold in the Indian motorcycle mart under the Bajaj brand. The companies were working on developing two platforms in India for motorcycles, which are expected to be commercially launched in the market by 2010. They have invested 35-40 million euros on the development of the platforms.

The two companies had also last year announced that Bajaj Auto would pump in an investmentment to the tune of Rs 300 crore for increasing its stake in Austrian sports bike maker, KTM to 25 per cent.  According to Rajiv Bajaj, Bajaj Auto, the company had increased its stake in KTM to 25 per cent two months ago and is now looking at hiking the holding much further.  However, he hasn’t said up to what extent the stake hike will go.

It is being said that Bajaj Auto would marketing KTM bikes in South East Asian countries too, apart from Europe. Industry sources, meanwhile, has hinted that KTM would look at an alliance with Bajaj in an effort to  bring its premium motor racing cars to India.