KTM is still not out of troubled waters yet. Although the brand received some fresh funds from Bajaj in February, it has now been hit with supply-chain issues that have halted its production lines in Austria. That said, KTM’s production in India remains unaffected.
The brand is going to need a considerable chunk of money if it is to continue existing – no two ways about it. Bajaj Auto, along with other stakeholders, will need to find a way to secure this sum of money. This means there will be new investors in the company – various investment firms, financial institutions, etc.
Rolling back a bit, KTM still needs to find a way to repay its existing debtors as per the restructuring proceedings conducted back in February. Accordingly, KTM has to pay its debtors a sum of EUR 548 million (about INR 500 crore) by May 23, 2025. And that’s the kind of money KTM most likely doesn’t have yet. To that end, the current stakeholders in the brand are keenly working on accumulating the sum.
Bajaj could directly or indirectly bring in a partial sum of this money to KTM. Bajaj Auto, which currently holds a significant share in the brand. Rajiv Bajaj, MD and CEO of Bajaj Auto, has quoted that Bajaj’s stake in KTM may go up soon.
Rajiv Bajaj has clearly said in the same interview that KTM is quite profitable for them, and he wouldn’t want to let it go so easily. He also continues stating that they are working on finding a sustainable solution for KTM’s problems, and that they are close to finding it. Considering how important the KTM brand is, Bajaj might just put in another considerable investment itself, thereby further increasing its stake.
In an unrelated topic in the interview, Rajiv Bajaj has also said that they are working on a “global partnership opportunity with an interesting brand”. He continues saying it will be “adjacent to their core space”. It could either be a two-wheeler or three-wheeler brand. But that’s just our speculation for now. Since we are on the topic of speculations, it was touted a while ago that BMW was interested in KTM. But BMW is already in a partnership with TVS. If this is indeed true, this four-brand (TVS-BMW-KTM-Bajaj) powerplay would be quite interesting to look at.
I would like to digress a bit here. It seems that there’s some movement happening in the BMW-TVS partnership. From an enthusiast’s perspective, BMW is pulling out its 310cc bikes – that share platform with the 310cc TVS bikes. Both the brands are going separate ways in developing their respective affordable adventure bikes. That said, it would be wrong to say that there are fissures in the partnership.
But purely for sake of discussion, if both brands do go their own ways, the stake in KTM could help BMW. More than anything, it could give them access to Bajaj’s production lines in Chakan. There’s no denying that Bajaj has cracked the code of making super-affordable performance-oriented motorcycles. And BMW might be able to leverage this for its own low-capacity bikes. Continuing hypothetically, this will mean bigger margins for BMW, which can help it recover its investment in KTM sooner.
While all of this sounds juicy, there are far more complex financial intricacies to all of this. It is not as easy as it looks – if it is to happen in the first place. There are significant conflicts of interest of all the parties involved in this hypothesis. Lest we forget, Bajaj is also in a partnership with Triumph Motorcycles to manufacture its 400cc bikes, and manage the British brand’s operations in India. The aforementioned hypothesis could also have implications on this partnership. But let’s just leave this where it is and get back to the topic at hand.
If Bajaj does actually increase its stake anymore in KTM, it could very well be a majority shareholder in the Austrian brand. Which would mean KTM “becomes an Indian brand” – in the same capacity as Land Rover is Indian, or Bugatti is German. However, for us enthusiasts, what really matters is that KTM lives on.
By extension of the investment, maybe Bajaj can domestically manufacture some of its higher capacity models. Shutting down the entire Austrian production facility might just be too far-fetched and maybe legally impossible. Everything said and done, KTM might just sail out into calmer waters in the future, but there will be some hard decisions taken for it in the present.
