Bajaj Auto Takes Control of KTM: New Era for Motorcycles

Bajaj Auto has recently received regulatory approval to take control of KTM, the Austrian motorcycle maker, marking a significant development in the global motorcycle industry. This move follows a long-standing partnership between the two companies and aims to support KTM’s financial restructuring after facing serious liquidity challenges last year.

The decision comes after Bajaj Auto injected €200 million and secured a further €566 million loan to fund KTM's restructuring. The takeover allows Bajaj to increase its stake in KTM from just under 50 percent to around 76 percent, making it the majority shareholder. This significant financial and operational control shift is designed to stabilize KTM, ensuring it remains an important employer in Austria and continues manufacturing operations there.

KTM had entered court-mandated restructuring in late 2024 due to liquidity issues, requiring it to settle part of its debt by mid-2025. Bajaj’s rescue package, totaling approximately €800 million, was crucial to meeting these obligations and saving the brand from potential insolvency. With this takeover, Bajaj transitions from being a passive minority investor to a strategic majority partner with authority over corporate decisions.

From a strategic perspective, Bajaj Auto’s involvement is expected to bring sweeping changes to KTM’s operations. The focus will be on cost-cutting by reducing white-collar overheads by more than 50%, including cuts in R&D, marketing, administration, and management layers, while protecting factory jobs. This move aims to make KTM more financially sustainable without compromising the production workforce or the quality of motorcycles.

Market reaction to the news has been positive, with Bajaj’s shares rising slightly. The takeover strengthens Bajaj Auto’s foothold in Europe, supporting its broader strategy to become a global leader in the high-performance motorcycle segment. Although it is a significant shift, industry observers note that Bajaj's takeover was more a move of necessity to protect its long-term investment and KTM’s legacy rather than a purely aggressive acquisition.

Opinions among the motorcycle community and analysts are mixed but generally understand that KTM's survival was paramount. Some express hope that Bajaj will maintain KTM's distinctive brand identity and commitment to high-performance motorcycles. Others highlight concerns about possible changes in product focus or reductions in innovation due to the restructuring demands. However, the emphasis from Bajaj is on stabilizing KTM and enabling it to continue as a competitive global brand.

In summary, Bajaj Auto's takeover of KTM represents a major turning point. It safeguards the future of a respected motorcycle manufacturer while setting a practical example of how strategic investment and operational restructuring can rescue struggling iconic brands. The cooperation between two companies from vastly different markets—India and Austria—now enters a new phase focused on revival, cost efficiency, and continued innovation for motorcycle fans worldwide.

This development is noteworthy for customers, employees, and stakeholders alike, as it reflects both the challenges of the global motorcycle industry and the potential for cross-border business collaboration to preserve and strengthen brands. The next few years will reveal how Bajaj’s stewardship shapes KTM’s future in the racing and sports bike arena.

With inputs from agencies

Image Source: Multiple agencies