KTM has a real chance at making a mark in the premium segment. But it has to aggressively convey its largely unknown brand attributes

KTM was an unknown brand for most Indian consumers when Bajaj Auto decided to pick up a 14.5% stake in the Austrian bike maker in November 2007. Even diehard motorcycle fanatics only knew that it is an off-road bike maker known for its orange motorcycles that have won many accolades during several motorcycle championships. While the recall for the brand has hardly improved over the past years, Bajaj Auto has hiked its stake to 40% in the company. For many months, industry watchers believed that the stake in KTM will at the most help Bajaj sharpen its focus on cutting-edge technology backed by a strong R&D.

However, Bajaj has other plans, as the Pune-based two-wheeler maker decided to launch the brand in the domestic circuit. In fact, it was during the 2012 Auto Expo that the Indian consumer got the first opportunity to get a touch and feel of the product.

Enthused by consumer feedback during the expo, KTM recently launched its first offering, the 200 Duke, in the Indian market in alliance with its partner Bajaj Auto. Going forward, it plans to compete with the likes of Honda and Yamaha in the premium motorcycle segment. But what chances of penetration can you hope for as a relatively unknown brand with an equally unconventional lineage (Austrian) from the Indian perspective?

As per the plan announced by Bajaj Auto (which is responsible for the sales, marketing & distribution of KTM products in India), the company will be rebranding its 34 ‘Probiking’ sports bike outlets as KTM Stores in the country. In addition, Bajaj will be opening 6 new showrooms in Dehradun, South Mumbai, Goa, Lucknow, Kathmandu and Guwahati by the end of this fiscal to expand KTM’s presence across the country. “When we invested in Probiking in 2003, we were very clear of the fact that we will need an exclusive distribution network for premium motorcycles. What Bajaj was 10 years ago for the Indian consumer, KTM is today,” said Rajiv Bajaj, MD, Bajaj Auto.

However, here’s the catch: Bajaj will be selling the KTM products along with the Kawasaki Ninja 250R and 650R (which is also distributed by Bajaj in the country), though the top-end Pulsar 220 and 200 bikes will now be sold through Bajaj’s outlets. In other words, Bajaj will retail both KTM and Kawasaki products from the same showroom, which may create competition under the same roof for KTM. But Stefan Pierer, CEO, KTM Motorcycles AG is unfazed as he comments, “We have been selling KTM products in Europe in many multi-brand showrooms and we have been very successful. We do not see any issue selling our products along with Kawasaki’s products as they have very different characteristics,” believes Pierer.

As per SIAM data, the 125cc-250cc segment sold 2.13 million units in the April-December 2011 period, with Bajaj Auto topping the charts with unit sales of 1.08 million units. However, it is the 250cc+ segment where Bajaj Auto has missed out in a big way. During the first nine months of this fiscal, the segment sold 70,340 units as Royal Enfield stood at the pole position with sales of 55,407 units followed by the only practical competitor Honda Motorcycle & Scooters India (HMSI) with 14,303 units. As compared to the last fiscal where HMSI just sold 26 units during the same period, the huge growth comes on the back of the launch of CBR 250R in the Indian market. For the less informed, it is the same segment buyer that KTM is targeting with its newly launched 200 Duke.

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Source : IIPM Editorial, 2012

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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