Bajaj takes full control of KTM: What’s next for Team Orange?

For the uninitiated, Indian OEM Bajaj Auto saved KTM from insolvency in late May with a cash infusion of €800 million ($923 million). The transaction granted Bajaj an option to acquire Pierer Industrie AG's 50.1% stake in Pierer Bajaj AG. It wasted little time exercising that option, seizing KTM's parent company, Pierer Industrie AG’s remaining shares on November 18, just eight days after the European Commission greenlit the acquisition. 

Now, the Indian brand assumes sole control of Pierer Bajaj AG and a 74.9% stake in Pierer Mobility AG. As a result, Pierer Bajaj AG will rebrand as Bajaj Auto International Holdings AG, and Pierer Mobility AG will transition into Bajaj Mobility AG. 

But, where does this all leave KTM? Well, it depends on who you ask.

Per KTM CEO Gottfried Neumeister, “KTM will remain an Austrian company with independent management that plays a pioneering role in research and development, design, product quality, and racing." 

Notice how Neumeister left out one particular department: production. That’s no coincidence. If the interview between India’s CNBC TV18 and Bajaj Managing Director Rajiv Bajaj provides any insights, KTM's manufacturing footprint in Europe could shrink in the near future.

“To put it very simply and bluntly, European manufacturing is dead,” claimed Bajaj. In support of that argument, he pointed to Triumph’s current supply chain. “Every single Triumph motorcycle that is made today is made either in Thailand, and of course, more recently, in India,” Bajaj noted, “If Triumph can do this 15 years back, in principle, why not KTM?”

While such a move would represent a sea change for the Mattighofen marque, Bajaj has yet to shift more KTM production to Asian facilities. That doesn’t mean it isn’t already making organizational changes. 

“We have to restore the brand to the core, from that will follow a great simplification of operations,” Bajaj surmised. “The second thing we have to do is to reset the cost.” According to Neumeister, those efforts are already underway, with KTM "making good progress" on "restructuring and cost reduction."

Much of that work will occur behind closed doors, leaving KTM customers wondering what's next for the brand. If anything is clear, it’s that change is in store for KTM, Husqvarna, and GasGas. How Bajaj implements those changes is the real question.