Bajaj Auto is set to inject additional funding of around Rs 1,360 crore into KTM, a financially struggling European motorcycle brand. The Indian company holds a 49.9% stake in Pierer Bajaj AG, which controls 75% of Pierer Mobility AG, the owner of KTM motorcycles. This move comes after KTM announced it needed emergency funding to stay afloat in November. The additional funding will be used to shore up KTM’s finances in Europe.
The exact terms of the investment are unclear, but it is likely to be used to keep KTM’s operations running smoothly. This investment may not make Bajaj Auto the majority stakeholder in KTM, as the current partner promoter, Stefan Pierer, may also invest an equivalent amount to maintain his stake.
KTM has been facing financial difficulties, with its European operations unsustainable in their current form. The company has acknowledged that it needs to be put on a “stable operational and financial basis.” Under its current owners, KTM has grown significantly, becoming Europe’s largest motorcycle manufacturer in the 2010s. The company has a strong presence in off-road and street motorcycles, with a successful history in motocross and enduro racing.
The investment by Bajaj Auto is expected to help KTM continue to operate, particularly in Europe, where the company has a significant presence. As a strategic partner, Bajaj Auto has a manufacturing and marketing agreement with KTM, making it essential for the company’s continued operation in India. The partnership has been successful, with KTM producing popular models like the Duke series in India.