Merger Between KTM and BAJAJ (Motorcycle company)

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Video Slide

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Strategic Alliance

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Introduction
 BAJAJ - Bajaj Auto
Limited is an Indian two-
wheeler and three-wheeler
manufacturing company.
 Founded in 1926, at the height
of India's movement for
independence from the British
 Bajaj Auto is the world's third-
largest manufacturer of
motorcycles and the second-
largest in India. It is world’s
largest three-wheeler
manufacturer.
 KTM - KTM-Sport
motorcycle AG is an
Austrian motorcycle
manufacturer owned by
CROSS Industries AG and
Bajaj Auto Ltd. KTM was
formed in 1981 but traces
its foundation to as early
as 1934
 Since 2012, KTM has been
the largest motorcycle
manufacturer in Europe
for four consecutive years.

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Merger-Why?
 KTM decided to go beyond its off-roading and become a more volumes-driven
automaker with on-road bikes.
 The only way to that was to partner with a maker of bikes with lower displacement
engines.
 The Bajaj-KTM synergy has mutually benefitted both the companies with low-cost
production and global expansion helping KTM achieve 25 % annual growth in the
past 3 years.
 The collaboration with Bajaj has helped KTM lower its costs and
increase profits substantially.
 Bajaj Auto. exited the scooter market with ambitions to become a global
motorcycle brand.

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Shared Values

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Strategic Alliance
Timing Pricing
Aesthetics Performance
After sales
services

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Financials
KTM’s turnover
in 2007
Bajaj’s turnover
in 2007
Net-profit 2018-
19
Stake acquired
by Bajaj
Market share of
Bajaj before &
after 2007
Units sold
before & after
the alliance

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Advantages for KTM
 For KTM, the alliance with Bajaj has also given it access to emerging markets such
as China, Philippines, Colombia and Malaysia
 For KTM, which was in the red when Bajaj acquired it, the association with Bajaj
has helped it become Europe’s second-largest motorcycle maker.
 India has emerged as a key destination for exporting KTM’s range comprising of
125cc, 250cc and 390cc bikes with Bajaj Auto exporting the orange models to about
80 countries.

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Advantages for Bajaj
 Network Expansion with entry to key markets such as Europe, Australia & Japan,
Latin America.
 Brand Recognition at Global level.
 Synergy Effect.
 Technology upgradation & adopting to changing consumer preferences.
 Key benefit for both the players would be not
competing in each other’s segment.

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Future Prospect for KTM & Bajaj
 Bajaj KTM extend partnership to Indonesia
 KTM and Bajaj agree on new electric vehicle alliance
 KTM will increase its sourcing from India in the future to 60-65 %.
 By 2020, KTM projects it will sell 2.5 lakh bikes in world markets.
 KTM will soon cross 1-lakh sales in a year, which is the best sales performance for
the company yet