Rescue with conditions: Bajaj invests 800 million euros
Following KTM’s financial difficulties, Bajaj Auto intervened with a capital injection of 800 million euros (around 860 million US dollars). The rescue operation not only enabled production to continue, but also allowed the plants to restart at the end of July. Currently, around 3,000 employees work at the sites, and according to the company, over 10,000 motorcycles were manufactured in August – including new LC4 models, motocross machines, and small-displacement bikes.
But Bajaj’s financial commitment comes at a price: the Indian group is seeking a complete takeover of Pierer Bajaj – the joint venture with Stefan Pierer that controls around 75 percent of the parent company Pierer Mobility. A majority takeover would secure Bajaj considerable influence over strategic decisions in the long term.
“European production is dead” – statements with a signal effect
In an interview broadcast in August on the Indian channel CNBC TV18, Rajiv Bajaj stated: “European production is dead.” Although this statement referred to industry in Europe in general, it was received with particular sensitivity in the KTM environment. In the same interview, Bajaj made it clear that KTM, as a premium and lifestyle brand, was “invaluable” to his group. Nevertheless, he emphasized the need to reduce costs and “restore” the brand.
As an example of an alternative production strategy, Bajaj cited the British manufacturer Triumph, which relocated its entire production to Thailand 15 years ago and now also manufactures in India. The question of why KTM should not follow suit raises concerns about a possible relocation. Especially since Bajaj emphasizes that the KTM models manufactured in India achieved over 30 percent operating profit (EBITDA).
KTM seeks to reassure – no relocation plans
KTM CEO Gottfried Neumeister responded immediately to the statements, explaining that there are “currently no plans to relocate production.” He emphasized that production was running according to plan and had reached the maximum possible in single-shift operation in August. The company is now focusing on its three core brands, KTM, Husqvarna, and GasGas. At the same time, it has withdrawn from the bicycle segment and from the distribution of the CFMoto brand, and has sold its stake in MV Agusta.
At the same time, Neumeister announced savings in material costs and internal structures. The CEO also emphasized that the company is prepared for possible delivery delays from suppliers.
India as a possible future location?
Industry experts do not rule out the relocation of individual production lines in the medium term – various KTM models are already manufactured by Bajaj in India and exported worldwide. The statements made by the Indian partner are therefore not entirely unfounded. Even if a complete relocation of production is not currently planned, India remains a strong argument for Bajaj: lower labor costs, a business-friendly environment, and high profit margins.
Europe under pressure in global competition
Rajiv Bajaj’s statements also shed light on the general situation of the industry in Europe. While Asian locations score points with low production costs and lean regulation, European industry is confronted with rising energy prices, CO₂ regulations, and bureaucratic hurdles. Bajaj’s assessment may be provocative, but it reflects a development that affects many companies—KTM is perhaps just a particularly prominent example.
Conclusion: KTM between loyalty to its location and global pressure
Despite the reassuring words from Mattighofen, KTM is under increasing scrutiny. The austerity measures, the withdrawal from various business areas, and the statements by co-owner Bajaj point to a phase of fundamental change. It remains to be seen how far this will go and what role European production sites will continue to play in the future.
