Bajaj Auto Secures Control of KTM: Inside Rajiv Bajaj’s Global Reset That Redefines the ‘Orange’ Brand

It is not just a business deal; it is a full-scale corporate intervention. After two decades as a silent partner, Bajaj Auto has secured the final regulatory approvals to take management control of PIERER Mobility AG (PMAG), the parent company of KTM.

This move is not a conventional 100% takeover, but a strategic acquisition of control for restructuring. It cements Bajaj Auto’s status as a global powerhouse, shifting the command center of one of the world’s most iconic performance brands from Austria to India.

The Backstory: A Partnership Tested by Crisis

The Bajaj–KTM story began in 2007 with a 14.5% stake. Over time, that share grew to approximately 48% in the operating entity, KTM AG.

Year	Milestone
2007	Bajaj Auto acquires initial stake in KTM.
2011	First co-developed bike, the KTM Duke 125, rolls out from Chakan, India.
2021	Bajaj swaps its direct KTM AG stake for 49.9% in the joint holding company, Pierer Bajaj AG (PBAG), simplifying the structure.
2024–2025	KTM faces acute financial crisis, reportedly filing for judicial restructuring due to overproduction and debt.

The €800 Million Lifeline

The control shift was triggered by KTM’s financial collapse in late 2024. Bajaj Auto stepped in with a massive support package, including an unsecured loan component of approximately €566 million (₹5,000+ Crore).

This financial rescue was not a bailout for headlines; it was the foundation for Bajaj’s new mandate to take the reins.

Rajiv Bajaj’s Vision: “Corporate Greed” and a Total Reset

Rajiv Bajaj, MD of Bajaj Auto, has been uncharacteristically blunt about the reasons for KTM’s decline and the need for a radical reset.

Bajaj’s Core Criticism (Verifiably Reported)	The Remedy
“Corporate Greed”	Restoring financial discipline and profitability.
Overproduction	Halting plant operations (as seen in Austria in 2024) and eliminating excess dealer inventory (estimated over 180,000 units).
Excessive Overheads	Bajaj announced plans to cut administrative overheads (R&D, marketing, G&A) by more than 50%.
Misinvestment	Criticizing the move into non-core businesses like the electric bicycle segment.

“The single biggest reason for corporate demise is corporate greed.” – Rajiv Bajaj, reflecting on the situation at KTM.

The Mechanism: Control Without a Mandatory Takeover

The transaction is not a simple purchase of 100% of the public company.

• Bajaj Auto International Holdings BV (BAIH) is acquiring the remaining 50.1% stake in Pierer Bajaj AG (PBAG), the joint holding company.
• Acquiring 100% of PBAG gives Bajaj management control over PMAG (which owns ~75% of KTM AG).
• The Austrian Takeover Commission ruled that this qualifies as a “restructuring privilege,” exempting Bajaj from making a costly mandatory takeover bid to all remaining shareholders of PMAG.

In essence: Bajaj is taking control to fix the company, not merely to buy it out.

The End of European Production? The Cost Reality

Bajaj’s plan mandates a strategic shift toward lean, Asian production to achieve global cost competitiveness.

• The Statement: Bajaj has been quoted saying, “European manufacturing is dead” due to high wages, excessive energy costs, and short working hours.
• The Logic: KTM models (125cc-390cc) already built in India command an EBITDA margin in excess of 30% for Bajaj. Manufacturing costs in India are up to 40% lower than in Austria.
• The Future: While R&D and high-end niche production (like racing engines) may remain in Austria to retain the heritage, the volume production shift to the Chakan, Pune plant will be accelerated to optimize global profitability.

What It Means for KTM in India and Globally

For the Indian Market:

Factor	Impact	Data Point / Rationale
Pricing	Potential Price Stabilization/Reduction	Local sourcing and massive cost cuts could make bikes 8-12% more affordable, improving competitiveness.
Product Refresh	Faster Cycle Times	With decision-making and R&D more closely aligned with Indian operations, model updates will be faster.
Quality Control	Renewed Focus on Durability	Bajaj is prioritizing improving design durability and component quality (a weakness cited by customers) to regain consumer trust.
Sales Performance	Mixed but Strong in the Mid-Range	While exports suffered due to the crisis (96% drop in 390cc exports by Jan 2025), the 250cc range in India showed strong +185% YoY growth, highlighting the segment’s importance.

For the Global Market:

• Shared Architecture: Bajaj will maximize the use of its flexible platforms, shared across KTM, Husqvarna, and the Triumph 398cc models, securing unmatched economies of scale in the 400cc segment.
• EV Strategy: Bajaj’s experience with the Chetak EV platform will be crucial in steering KTM’s nascent electric vehicle push (a segment where KTM faced initial strategic missteps).
• Brand Identity: The challenge for Pune is maintaining KTM’s “Ready to Race” ethos while becoming a value-driven, high-volume global brand—a transition only possible through Indian-level efficiency.

Author Insight: A Global Command Center

This is the most aggressive move yet by an Indian auto giant to not just acquire a foreign brand, but to become the command center for its global destiny.

Rajiv Bajaj is betting that India’s cost efficiency, manufacturing excellence, and high-volume demand are the only viable path for KTM’s long-term survival and prosperity. This move is not merely a transfer of ownership; it is the final validation of India as the epicenter of global performance biking strategy.

FAQs

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The Bajaj–KTM takeover marks more than a merger — it’s a signal that India is no longer just an outsourcing hub but a command center in the global auto ecosystem.As Rajiv Bajaj steers this transformation, one thing is clear: the next wave of performance biking innovation won’t come from Europe — it’ll roar out of India.