Bajaj Auto is set to take majority control over KTM AG and is looking to make various changes, including a probable move of manufacturing to India. Combined with possible job cuts, the measures are part of plans to reduce costs at the Austrian bike maker.
As per Bajaj Auto Executive Director Rakesh Sharma during a Q2 earnings call, Bajaj Auto is likely to get the required regulatory approvals and gain majority control over KTM AG by mid-November.
“We have made an application for taking majority control over KTM AG, and we have submitted our application. There are some nine approvals which are needed from various commissions in Europe, and eight of them have been secured,” said Sharma. “The ninth one should also be through, hopefully by mid-November, which is when the turnaround can start, to be very actively led and directed by us.”
When asked if KTM will continue its manufacturing operations in Europe, Sharma stated that “We will look at all options for reduction of cost, provided that quality is not compromised…That is a very, very important piece of the turnaround.”
On the topic of shifting manufacturing to India, Sharma seemed inclined to the option. “Of course, it includes that because we’ve had a very good experience, both KTM and us, in manufacturing some of the lower cc (engine capacity) bikes, and that is certainly very much on the table and will be evaluated and progressed,” he shared.
However, it does not seem like Bajaj Auto is intending to shut down the manufacturing plant in Europe. “We have not gone down that direction…it’s not that we are going there with an agenda of shutting down a plant. We are going there with an agenda of reducing product cost.”
Sharma added that manufacturing some of KTM’s high-end bikes in India might not be a feasible venture, as the European plant already has an established vendor ecosystem, and doing so in India will take time.
As for job cuts, Sharma shared, “Yes, plans are being developed, but we will get into the driver’s seat only (at the) end of this month. We are waiting for the regulatory approval before we can start to take any actions.”
Baja Auto had announced its intention to acquire a majority stake in KTM through Bajaj Auto International Holdings BV in May 2025. The international wholly-owned subsidiary of Baja Auto arranged a debt funding package of 800 million euros (about ₹7,765 crore) to become a majority owner in the company from being a dormant minority investor.
As per Sharma, Bajaj Auto’s plans for KTM turnaround will be based on three legs: financial liquidity and support, putting a proper people structure, and cost reduction. He stated that financial liquidity and support have already been put in motion, and they have received proper funding.
However, putting a proper people structure is still in the works, and it seems that Baja Auto has some big ideas for the same. On the topic, Sharma said, “…a lot of the old management had to go, and is going…So a new breed of management is getting into position…” He added that cost reduction includes “both overheads as well as direct costs of manufacturing,” which include components. That said, Sharma acknowledged that it takes more time as the components will have to be developed in India or elsewhere.
Sharma went on to share that KTM sales have been improving, and so are Bajaj’s exports to KTM. “Our exports to KTM also have been good (at) almost 20,000 units in quarter two. KTM exports would account for about 5 to 6 per cent of our exports in a normal year. It had slipped down to 1 per cent and now it’s climbing back,” he explained.
