A week after the parent firm of Bajaj Auto's Austrian partner KTM auto announced its acquisition of BMW's off-road biking division Husqvarna for an undisclosed sum, the company's CEO Stefan Pierer told CNBC-TV18 that the deal is a win-win for both Bajaj and KTM.
Last week Bajaj Auto 's Austrian Partner KTM made the bold announcement to acquire its rival off-road biker Husqvarna from BMW. The acquisition will make the austrian company the undisputed leader in the niche off-road segment. In an exclusive interview to CNBC-TV18's Ronojoy Banerjee the CEO of KTM Auto Stefan Pierer talked about the thinking behind the acquisition and why it is a win-win for both KTM & Bajaj Auto.
The acquisition of Husqvarna comes as good news for the KTM-Bajaj Alliance too. Just last year the two partners entered into a manufacturing alliance and launched KTM's first product offering in India the Duke 200 which rolled out of Bajaj's Chakan plant. Today, there are 8,500 Dukes on Indian roads and Bajaj is hopeful of touching the 10,000 mark shortly.
KTM is hopeful that it can extend its current arrangement with Bajaj to include the Husqvarna and launch the first made-in-India Husky in two years from Pune.
Stefan Pierer, CEO, KTM Auto says, "First Husqvarna motorcycle will be launched in India in 2 years. Proposed Husky model for India to be made at Bajaj's Chakan plan will use joint engine platforms of Bajaj-KTM for Husky models. Joint-engine platform to be used for 125cc-200cc segment for Husqvarna."
KTM is keen to model its strategy on the lines of auto giant Volkswagen. Pierer says just the way the German OEM has a common back end for a multitude of brands from Audi, Skoda and VW, KTM too will follow a similar approach.
Stefan Pierer, CEO, KTM Auto adds, "If you look at Volkswagen group they have 9 or 10 different brands but inside they use same components etc."
KTM posted its best ever annual sales at 107,000 units in 2012. With its latest acquisition Husqvarna along with the other Swedish brand under its belt Husaberg KTM is aiming at over 120,000 units by the end of 2013. A chunk of its volumes are expected to come from emerging markets including India where the company is gearing up to launch the all new duke 390 by June.
Bajaj Auto stock price
On July 24, 2014, Bajaj Auto closed at Rs 2106.60, up Rs 2.45, or 0.12 percent. The 52-week high of the share was Rs 2363.90 and the 52-week low was Rs 1683.35.
The company's trailing 12-month (TTM) EPS was at Rs 112.16 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 18.78. The latest book value of the company is Rs 332.04 per share. At current value, the price-to-book value of the company is 6.34.
Set email alert for
ADS BY GOOGLE
video of the day
Market in fine fettle; 2014-end Sensex target at 26300:Citi