Bajaj Auto may contribute an extra Rs 1,360 crore to KTM, the European motorbike manufacturer that is having financial difficulties. According to reports, Bajaj Auto owns 49.9% of Pierer Bajaj AG (PBAG) in Austria through its Dutch subsidiary Bajaj Auto International Holdings BV (BAIHBV). This company also owns roughly 75% of Pierer Mobility AG, the company that owns KTM bikes.In November, KTM stated that company was in discussions with its owners and lenders and would require emergency funding to stay solvent.
It is highly probable that the funds will be used to support KTM’s finances in Europe, even though the Indian company has not publicly stated whether it will increase its investment in KTM. Today, the company announced that its board has approved the investment of 150 million euros (roughly Rs 1,350 crore) into Bajaj Auto International Holdings BV, Netherlands.It’s unclear if this would make Bajaj Auto the largest stakeholder in KTM or if Austrian entrepreneur Stefan Pierer, Bajaj Auto’s joint promoter, will contribute an equal amount to maintain the balance of their respective holdings.
In 2007, Pierer sold a 14.5 percent initial interest in Bajaj Auto to bring it on as a strategic partner and investor. Following this, Bajaj Auto signed manufacturing and license arrangements and expanded its exposure to KTM. However, KTM currently need urgent capital infusions to sustain operating due to company-specific issues and a persistent slump in the premium motorbike market in Europe. The business has admitted that its European operations need to be further trimmed in order to be placed on a “stable operational and financial basis” since they are not viable in their current shape.
A major force in the European motorcycle industry, KTM is well-known for its off-road and popular street bikes. In 1934, Hans Trunkenpolz established Kronreif, Trunkenpolz, Mattighofen, an Austrian metalworking firm. It began as an automobile repair firm before turning to motorcycle manufacturing in 1954 with the introduction of the R100.
KTM made a name for itself in motorcycle racing, especially off-road events, throughout the 1950s and 1960s. The business produced bicycles and motorbikes and expanded gradually. KTM concentrated on off-road motorcycles and became well-known for their tough appearance and performance in enduro and motocross competitions. It gained notoriety for its off-road motorcycles by the 1970s and won many racing titles. The business added street bikes and mopeds to its line of products. But in the early 1990s, KTM had serious financial issues, and in 1991, it filed for bankruptcy.
In 2013, BMW Motorrad sold the Swedish motorcycle company Husqvarna Motorcycles to KTM, which is now part of PIERER Mobility AG. KTM brought the brand back to life by establishing it as a high-end off-road and street motorcycle manufacturer. In order to increase its footprint in specialized off-road markets like trials riding, it also purchased the majority of GasGas, a Spanish manufacturer that specializes in trials and enduro bikes.With models like the Adventure series and the Super Duke, the business successfully penetrated the street bike market and grew to become the biggest motorcycle manufacturer in Europe. With a significant involvement in motorsport, notably MotoGP, KTM is now well-known for both its street and off-road motorcycles.
