Bajaj Auto is India's second largest bike manufacturer and on Tuesday it purchased a total of 2.44 lakh worth shares in KTM. This deal of the Bajaj India has raised its share to astonishing 38.09% from the earlier recorded 35.7 percent. It was this April when the company previous raised its share from 31.9 percent to 35.7 percent. And now finally company stands at the position of 38.09 percent stake in Europe's top sport bike manufacturing company.

With these figures it is clear that Bajaj auto is raising its stakes in KTM at a steady rate and the company is able to increase its grip on KTM operations with time. As compared to today's value, the Bajaj was at a low point of 14.5 percent stake in 2007 but with time the company has effectively raised its stake in KTM. On the occasion, S Ravikumar, Senior VP Business Development & Assurance, Bajaj Auto said, “The driving force in KTM India has been the brand fit and the non-over-lapping strategy,” In terms of KTM shreholders listing. Bajaj stands at the second position with a share of 38.9 percent. In KTM, the largest shareholder is Stefan Pierer and Rudolf Knuenz hold with a pie of 51 percent. this makes it clear that Indian major is not much far from the top shareholder of KTM.

Bajaj and KTM have maintained real cordial relationship on joint projects. The 1st ever product made by them as a pair is KTM Duke 125 and it will hit the European markets by 2011. The Australian manufacturer has shown interest in manufacturing the entry level bike also with Bajaj for European markets. KTM Duke will be launched in Indian markets in the second half of next year.

Kawasaki- Kawasaki heavy industries ltd is originally started as ship building company based in Japan. Beside motorcycle & all terrain vehicles it also produces personal water craft, ships, industrial plants, tractors, trains, small engines and aerospace. Kawasaki’s bike division is very tiny compare to its other divisions. But the fact that main brand recognition has come from Kawasaki motorcycle division. Kawasaki rolled its first motorcycle of 125 cc in 1960. In 1966 it produce W1 (650CC motorbike then after the company started producing sports superior performance motorcycle. The secret of Kawasaki’s success is in designing and manufacturing products that offer balanced presentation high class reliability and excellent fit and finish. Kawasaki India motorcycle division has produced some class leading motorcycles such as Ninja, Kawasaki Z series, Vulcan. Its main focus is to develop high performance motorcycles.

KTM- KTM was founded in 1934 by Engineer Hans Trunkenpolz in Mattighofen, Austria. In the 1953 it rolled out its first motorcycle with just 20 employees. KTM India is well known for it’s off ride bikes. Beside motorcycle it also produces bike moped and cars. While many of motorcycle manufactures have shifted their models from two strokes to four strokes. KTM still continued its two strokes models (Kindly note that it has some motorcycles which has two strokes engines). With conventional two strokes engine advantage of cheaper manufacturing cost and cheaper maintenance, KTM also prepared their motorcycle to pass stricter green standards. It has very big market share in two stroke motorbike segment. KTM has produced some class leading motorcycle like Duke, Supermoto and LC4 series,

Bajaj Auto- Bajaj vehicle came into existence on November 29, 1945 as M/s Bachraj Trading Corporation Private Limited. Bajaj Auto rolled out its first bike in 1986 named KB100 in collaboration with Kawasaki followed by KB125. In 2001 it produce its first all indigenous motorcycle pulsar followed by Discover in 2004. Today it produces Boxer, Platina, Pulsar, Discover and Avenger in motorcycle segment. Bajaj has industry leading EBITAD (Earnings before interest, taxes, Depreciation and amortization) of 20% which is highest in Indian auto industry. It has mastered the art of low cost structure. To be noted that the low cost structure has emerged of manufacturing efficiency, focused marketing expenses and vendor management. For example as seen in case of DiSAil Cylinder by Yamaha which gives 60% better cooling performance and cost 30% less than cast liner sleeves cylinder. Kawasaki bike majorly produces class leading high performance motorcycles which none of KTM or Bajaj has. KTM mostly deal in class leading off road bikes which none of Bajaj or Kawasaki has. On the other hand Bajaj produces low displacement street bikes which are better than of Kawasaki and KTM. So, all the three players majorly operate in three different segments. Bajaj has technical tie up with Kawasaki since 1986. Bajaj has very cordial relation with Kawasaki till the date. In fact the design of Platina (wind 125), boxer and Avenger (Eliminator) is originally of Kawasaki and Bajaj still pays a minor royalty to Kawasaki for Platina and Boxer. Bajaj also sells its motorcycles through Kawasaki distribution network in many exporting countries. For example in whole Philippines where Bajaj sells 1,00,000 numbers a year, sold through Kawasaki network. Kawasaki also sells its Ninja through Bajaj networks in India. Bajaj bough 14.5% stake KTM in 2007. As if date it has 35.2% stake in KTM. KTM has wide presence and well established dealer network in European market. Beside this it has good technology for two stroke motorcycle. Bajaj and KTM are also equally developing two concept bikes called Race and stunt (one bike is christened KTM125 Duke.) Bajaj has noble relationship with Kawasaki and it owns 35.2% stake in KTM which makes this deal to be likely happen.How this Tri-alliance will benefit to all the three partners?

1. All three players would be able to share their dealership network which means reduction in cost, better distribution network and increased volume. For example KTM is planning to sell 1,00,000 units by end of 2013 using Bajaj dealership network. Kawasaki already has sold more than 500 Ninja through Bajaj dealership network.
2. Joint technology platform would help to reduce cost substantially for all three players. Yamaha used Vixion platform for developing YZF R15. Same way Bajaj can use KTM platform to develop upcoming motorcycles or vice a versa.
3. Synergy effect (In simple terms 1+1=11) will make all the three players globally more competitive. Other players like Yamaha and Honda operate in every engine capacity and segments and these three players work in different segments.
4. KTM would able to learn manufacturing cost structure of high displacement motorcycle from Kawasaki and low cost structure from Bajaj. Kawasaki would be able to learn Bajaj low cost structure and advanced technology of off road bikes from KTM. Bajaj on other hand would be able to compete globally with global giants like Honda and Yamaha by KTM and Kawasaki partnership.
5. The major benefit for all three players would be not competing in each other’s segment. For example in India, Bajaj bikes will be in the range of Rs. 30,000 to 1,25,000, KTM will be in the range of Rs. 125000 to 2,50,000 or 3,00,000 and Rs. 3,00,000 and above is the range where Kawasaki will be placed. Bajaj is seeking its 70% of revenue to come from export which of course will take years to achieve. The Tri-alliance is the part of the same strategy which will help Bajaj to develop new engine and vehicle platforms for global market. A final decision on the alliance is expected by the year end.

According to Bajaj Auto Two-wheeler, CEO, S. Sridhar - the new product will be first launched in Europe and then in India and this will be sometime during the next financial year. The bike will be assembled at Bajaj's Pune plant and will be sold with the KTM marquee through their Pro-biking showrooms . These showrooms currently sell the Kawasaki Ninja 250R along with Bajaj products. Kawasaki which recently opened their Indian arm and will introduce more performance bikes from its international range, which will also be marketed through these showrooms. Finally, bigger bikes with newer technology are making their way in to the Indian market. Now it's just a matter of time for the enthusiast to quench their need for speed.

[Via: BikeIndia]

Bajaj Auto has invested Euro 20 Million in this capital increase and consequently has increased its share-holding in KTM from 31.92% to 35.67%. The joint development projects are proceeding well and the first products will hit the markets by the end of this year in Europe and by middle of 2011 in India. Bajaj will distribute KTM products in India and in markets like Sri Lanka, Bangladesh, Indonesia, Africa.

[Via: Motorbeam]

The agreement between the 2 companies took place in November 2007, with Bajaj Auto gaining 31.72% stakes in KTM. Essentially, KTM manufactures 50cc-1200cc bikes but for Bajaj Auto, only 2 bikes will be developed with a mass production taking place at Chakan, near Pune. KTM is looking forward to showcase these products at the international bike fair EICMA which will be held in Milan, Italy this November and later at the Auto Expo in New Delhi in January 2010.

Apart from these bikes a few big bikes of KTM will also be launched. These include 690 Supermoto, street bike 690 Duke, 990 Adventure, 250 EXC-F and 990 Superduke to name a few. While some of them will be directly imported, others will be sold through Bajaj's probiking showrooms. With so many bikes to choose from, bikers will be quite delighted.

[Via: BIKE]

Compared with the 93,300 bikes it produced last year, KTM plans to only produce around 70,000 motorcycle this year. The company had recently laid off around 300 of its employees and now plans to run shorter production shifts, because of which another 700 of its employees may have to take pay cuts.

However, KTM continues to invest in R&D and, along with Bajaj Auto, is working on a 125cc street bike which it aims to unveil at the EICMA show in Italy, in November this year. This bike will also be shown at the 10th Auto Expo in Delhi in January 2010 and could go on sale in Europe and India simultaneously, during the first quarter of 2010.

KTM is also working on developing various other kind of vehicles that are aimed at sustainable mobility in the future. Among others, these vehicles include a battery-powered off-road bike and a small car, which could be similar in concept to the Tata Nano.

[Via: indiaautomotive]

In 2008-09, these figures were 17% for Bajaj and 15% for TVS, with the difference in the number of units sold coming down to just 149,000 as compared to 527,000 units in 2007-08.

Of course, Bajaj and TVS are all scrambling to catch up with Hero Honda, which remains firmly glued to the no.1 spot with a 49% market share. But while Bajaj's two-wheeler sales fell from 1.67 million units in 2007-08 to 1.28 million units in 2008-09, TVS sales only went down from 1.15 million units to 1.13 million units in the same period.

Bajaj's new nemesis seems to be Yamaha, whose sporty new bikes - the FZ16/FZ-S and YZF-R15 - seem to have had a significant impact on the sales of the Pulsar 150/180/200/220 range.

Still, with the Pune-based company planning a comprehensive product revamp across the board, and with its new bikes from Kawasaki and KTM coming up over the next few months, Bajaj may witness a revival of sorts by end-2009.

On the other hand, TVS, which chooses to soldier on without the benefit of a foreign tie-up and which has a relatively small product portfolio compared with Bajaj, may lose its advantage over the next few months. In either case, it should certainly be interesting to see how this battle pans out in 2009-10.

[Via: indiaautomotive]

KTM RC8 Promo....

Bajaj's stake in KTM has now gone up from 26.22% to 31.72%. The Pune-based company picked up this stake last week, when KTM was looking at raising funds via an increase in its share capital. Of the 687,357 new shares that were created, Bajaj Auto picked up 416,216 shares at a subscription price of €25 (US$31) per share. Hence, hiking its stake in KTM to 31.72% would have cost Bajaj about Rs 64 crore.

In the business year ended 31st August 2008, KTM reported revenues of €605.7 million (about US$776.9 million), up 7% from €566.1 million in the prior business year. The Austrian company sold 92,385 units in 2008, a marginal increase over the 90,306 units it sold in 2007.

As has already been reported earlier, Bajaj and KTM are working on a range of 125-250cc bikes for the Indian, Southeast Asian and European markets. Bajaj is also expected to launch a few KTM bikes in India, via the CBU imports route.

[Via: indiaautomotive]

Rajiv Bajaj, CEO and MD, Bajaj Auto, has reportedly said that the stake increase will be completed in 6 to 8 weeks. He also commented that his company has reached an agreement to increase stake in KTM. However, he apparently declined to talk about the valuations saying it wouldn't be appropriate at this juncture.

[Via: BIKE]