Bajaj Auto Ltd, the country's second largest two-wheeler manufacturer, on Monday said it has picked up 14.5 per cent stake in European sports bike maker KTM Power Sports AG for more than Rs 300 crore (Rs 3 billion).
The deal is in line with Bajaj's global expansion strategy and will see the two companies jointly develop engines and share each other's dealer network. Besides, it will also entail manufacturing the KTM's products at BAL's Chakan facility in Maharashtra.
"Bajaj Auto has acquired 14.5 per cent stake in KTM and thus becomes the second largest shareholder in the company after its promoters. This is our first step toward going global," BAL general manager (marketing) Amit Nandi told PTI.
He said the consideration for the deal was valued at "over Rs 300 crore". Describing the deal as a win-win situation for both the partners, Nandi said it would give BAL access to around 720 KTM dealers in Europe through which the Indian firm can retail its products.
"Right now details are being worked out as to what kind of products are to be sold there," he said, adding the two partners would also be jointly developing 125cc and 250cc four stroke water-cooled engines for future products.
"These engines will get into both KTM and BAL products and we will even manufacture KTM products at our Chakan facility," Nandi said, but said no products have been identified as yet.
To start with, KTM's existing products would be retailed through BAL's 'Probiking' outlets in India, he said. "The formal launch will happen later in the fiscal or early part of the next fiscal but we will be definitely showcasing KTM products at the upcoming Auto Expo," Nandi added.
The tie up with BAL will enable KTM to extend its product portfolio for the future with a 125cc street product line. This will be in addition to the present 1,190cc, 990cc and 690cc platforms developed and manufactured in Austria.
With the introduction of the new EU driving licence norms, which allow riding of 125cc motorcycles with a car driving licence in all EU member states, KTM will be able to offer premium entry models in the street segment.
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