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Last Updated : Jan 07, 2020 11:12 PM IST | Source: Moneycontrol.com

KTM to piggyback Bajaj Auto to boost volumes by 50% in 3 years

KTM, which had finished 2018 with global volumes of 261,529 units, forecasted sales of 400,000 units by end of 2022.

Austrian street bike specialist KTM and its Indian partner Bajaj Auto are looking to accelerate on new launches to give their annual sales more than 50 percent volume boost compared to the 2018 levels.

KTM, which had finished 2018 with global volumes of 261,529 units, forecasted sales of 400,000 units by end of 2022. This comprises models from KTM, Husqvarna and GasGas brands.

Bajaj Auto will also increase its share in the overall pie of KTM to 50 percent by selling 200,000 units by 2022 from 36 percent recorded in 2018 with 94,400 units. All these units will be produced at Bajaj’s Chakan unit near Pune and will be sold by Bajaj in India and other parts of Asia like Indonesia and by KTM in Europe and the US.

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If the Indo-Austrian combine manages to achieve the target, it will be more than six times compared to the time when Bajaj first picked up stake in KTM in 2007 when KTM’s annual sales were around 65,000 units. Bajaj has made an aggregate investment of Rs 1200 crore in buying 48 percent equity of KTM till date.

About eight models are being made by Bajaj Auto at its plant in Pune comprising KTM and Husqvarna brands. These are Duke 125 Duke 200, RC 200, Duke 250, Duke 390, RC 390, Svartpilen 401 and Vitpilen 401.

Two more models are due to be added in the coming months – Adventure 250 and Adventure 390 – that will cater to a new segment of motorcycles. KTM has already transferred production of Husqvarna model line 401 to Pune from Austria.

Electric mobility will also play a crucial role in expanding ties between the two companies.

Bajaj’s first all-electric product Chetak will reach European markets in 2020 followed by the introduction of a modern-looking urban electric scooter to be brought under the brand Husqvarna. The 4KW and 10KW Husky scooter is presently under development and is targeted for launch in 2021.

The Chetak, which was unveiled by Bajaj in November, is getting ready to be commercially launched this month when prices will be revealed.

With a compounded annual growth rate (CAGR) predicted to be 17 percent between 2017-22 KTM has stated that the increase of sales volume in India is stronger than planned earlier.

With sales of 50,000 bikes in India in financial year 2018-19, KTM sold more units in the country than the US thus becoming its largest market in the world. KTM now has presence in 460 showrooms across the country — the largest network for any premium sports motorcycle brand.

The proportionate profit to Bajaj Auto during 2018 was €43.05 million (Rs 350 crore), which shows up in its consolidated results. Besides KTM AG declared a dividend of €2.50 per share, versus €2.25 per share for 2017. Thus, Bajaj Auto Holdings BV has received €13.01 million (Rs 104 crore) as its share of dividends.

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First Published on Jan 7, 2020 03:02 pm
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