ED Rakesh Sharma says the company will explore all cost-reduction options, including manufacturing shift, job cuts, and overhead rationalisation, as it prepares to take control of KTM.
07 Nov 2025 | 3434 Views | By Darshan Nakhwa
As Bajaj Auto Ltd readies to take control of KTM AG, Executive Director Rakesh Sharma said the company is evaluating several options, including shifting more production to India and cutting jobs, as part of efforts to reduce costs at the financially stressed Austrian motorcycle maker.
“Now that we are ...
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As Bajaj Auto Ltd readies to take control of KTM AG, Executive Director Rakesh Sharma said the company is evaluating several options, including shifting more production to India and cutting jobs, as part of efforts to reduce costs at the financially stressed Austrian motorcycle maker.
“Now that we are going to be in the driver's seat next month or later this month, we will look at all options for reduction of cost, provided you know quality is not compromised,” Sharma said during Bajaj Auto’s Q2 FY26 earnings call. "This is a very important piece of the turnaround.”
Bajaj Auto has already secured eight of the nine regulatory approvals required to assume control of KTM, with the final clearance expected by mid-November. Once that is in place, Bajaj will move from a holding-level position to direct operational control of the company.
According to Sharma, Bajaj’s turnaround blueprint for KTM rests on three major pillars–financial support, rebuilding the leadership structure, and cost reduction. “The first leg, ensuring financial support, has already been put in motion. The second is working with them to put in place a proper people structure, because a lot of the old management had to go and is going. The third is cost reduction, both overheads and direct manufacturing costs, including components,” he said.
As part of this cost reset, Bajaj will explore shifting more KTM production to India, particularly for smaller displacement motorcycles. “Yes, of course it includes that,” Sharma said when asked whether more manufacturing could be done in India. “We’ve had a very good experience, both KTM and us, in manufacturing some of the lower-cc bikes here, and that is certainly on the table. It will be evaluated.”
On the possibility of shutting down the KTM plant in Europe, Sharma said, “We have not gone down that direction. We are not going there with an agenda of shutting down a plant. We are going there with an agenda of reducing product costs,” he said.
Sharma also asserted that it may not be feasible to produce some of KTM's high-end bikes in India. “Some products like the 1290s, 1390s, and 890s can’t be made here. We’ll evaluate which ones can be. The switch doesn’t happen overnight. Components have to be developed, vendors have to be organised, and manufacturing has to be retooled.”
On the question of possible job cuts, Sharma confirmed that plans are being drawn up but that any decisions will be taken only after Bajaj assumes full control later this month. “Yes, the plans are being developed. But we will get into the driver’s seat only at the end of this month, after the regulatory approval, before we can start taking actions,” he said.
Bajaj Auto and KTM have been partners since 2007, when the Indian automaker first acquired a minority stake in the Austrian motorcycle brand. Over the years, their partnership evolved into one of the industry’s most successful alliances, with Bajaj manufacturing several KTM and Husqvarna models at its Chakan plant near Pune and exporting them to more than 60 markets worldwide.
However, in late 2024, KTM and its subsidiaries entered a self-administered restructuring process after facing severe liquidity pressures and operational disruptions. In May this year, Bajaj Auto announced plans to acquire a majority stake in KTM AG through its wholly owned subsidiary, Bajaj Auto International Holdings BV, supported by a €800 million debt funding package. The move marked Bajaj’s transition from a dormant minority investor to an active controlling shareholder in the global motorcycle group.
Bajaj’s financial intervention helped KTM sustain operations, restart production, and safeguard jobs, paving the way for the company’s exit from court supervision by mid-2025.