Bajaj Auto Explores Further Integration Of Ktm Production For Cost Competitiveness

In a bid to strengthen KTM’s global positioning, Bajaj Auto is exploring further integration of the Austrian motorcycle brand KTM into the company’s manufacturing ecosystem, with a sharper focus on cost competitiveness and supply-chain optimisation.

Speaking to the media after Q3 FY26 earnings, Rakesh Sharma, executive director at Bajaj Auto, said the company continues to work closely with KTM to improve competitiveness by shifting more sourcing and production to cost-efficient locations, including India.

“Most of the production has already moved out of Europe, not just for KTM but across the industry,” Sharma said, while highlighting a broader global trend of manufacturers relocating production to Asia to reduce costs.

Bajaj Mobility AG, KTM Group’s new parent, has recently started restricting its business, cutting about 500 jobs, mainly in white-collar and middle management roles, to reduce costs and streamline operations following the company’s 2024 insolvency. The move aims to strengthen competitiveness as KTM focuses on core motorcycle brands.

Bajaj Auto’s relationship with KTM goes back to 2007, when the Indian automaker picked up a minority stake in the Austrian motorcycle brand. What began as a strategic investment steadily grew into one of the industry’s most enduring partnerships.

Over the years, Bajaj turned its Chakan plant near Pune into a key global manufacturing hub, producing KTM and Husqvarna motorcycles that are exported to more than 60 markets. That long-standing alliance took on new significance in late 2024, when KTM and its subsidiaries entered a self-administered restructuring after running into acute liquidity stress and operational disruptions.

Last year, Bajaj Auto acquired a majority stake in KTM AG through its wholly owned arm, Bajaj Auto International Holdings BV, backed by an €800 million debt funding package. The deal marked a decisive shift for Bajaj—from a largely passive minority investor to the owner of the global motorcycle maker.

Sharma said this collaboration is expected to deepen further under the new management. “We have already made over 1.4 million motorcycles for KTM, sold in India and many countries around the world,” he said. The scope of cooperation to expand production of additional KTM models in India is likely to increase based on competitiveness and the ability to deliver quality at scale.

While Sharma did not outline specific future models that could be moved to India, he indicated that decisions on shifting additional models or components to India would be guided by cost logic and operational feasibility rather than sentiment.

“Whatever makes sense from a competitiveness point of view, we will do,” he said.

KTM has recently undertaken cost rationalisation measures, including workforce reductions, as part of a broader effort to stabilise operations amid a challenging global motorcycle market. Sharma said these steps should be seen in the context of a wider industry adjustment rather than a brand-specific crisis.

“The global industry is going through a phase where costs have to be structurally aligned with demand,” he said, noting that KTM’s actions are consistent with how manufacturers are responding to margin pressures worldwide.

Bajaj Auto’s management said its commitment to KTM remains unchanged. The partnership, spanning product development, manufacturing, and global distribution, is one of the major pillars of Bajaj Auto’s global strategy.

“There is a very strong cost logic to expanding this collaboration further,” Sharma said, suggesting that India’s role as a manufacturing and sourcing hub for KTM could grow under the new management regime.