Over four years after its stake sale to Bajaj auto Austrian bike maker KTM has launched its first offering in the country. CEO Stefan Pierer briefs 4Ps B&M on their strategy to gain volumes from the Indian market

Globally known for its off-road and racing motorcycles, Austrian bike maker KTM is now all set to dazzle the Indian consumer with its orange offerings. Starting with the 200 Duke, KTM is planning to expand its product line-up in alliance with its partner Bajaj Auto. Considering the fact that Bajaj Auto holds a 40% stake in KTM, the manufacturing and distribution capability of India’s second largest two-wheeler maker is expected to give a strong push to KTM’s presence in the domestic market. In fact, the company expects the Indian market to become the largest volume puller for their portfolio in the next 3-4 years. 4Ps B&M speaks exclusively to Stefan Pierer, CEO, KTM Motorcycles AG about the India plans of the company. The Business and Energy Management graduate from the Montan University in Leoben, Austria, throws light on the alliance with Bajaj, the product plans for India and export opportunities available in the domestic circuit. Edited excerpts:

KTM has been manufacturing the Duke series of motorcycles at the Bajaj Auto plant in Chakan and exporting the 125 Duke to other markets. However, the company chose to start its India operations with the launch of the 200 Duke. Why are you not introducing the 125 Duke yet? Also, what are the other products that you are planning to launch in the Indian market in the coming years?
We started manufacturing 125 Duke in February last year and we are currently exporting it to Europe and Japan. We can launch this product in the Indian market any time, but we believe that the Indian market is still not ready for such a premium product in the 125cc segment. Hence, we decided to start our journey with the 200 Duke as Honda is the benchmark in the 250cc segment. So far, we have no plans to launch the 125 Duke in the Indian market, but if there is a demand for the product, we may look at launching it at a later point in time. Apart from the 200 Duke, We are planning to launch the KTM 350 in India by 2013. We have many models in our global portfolio, but they are more of racing models and hence, they aren’t really suitable for the Indian market.

Currently, KTM sells most of its overall volumes in Europe. What kind of expectations do you have from your India operations, especially considering the fact that Bajaj Auto will be taking care of the sales and marketing of KTM products in the Indian market?
We currently have a capacity of 30,000 units at Bajaj’s Chakan plant. Out of this, we are looking at exporting close to 20,000 units this year. We can double the capacity if the product receives a huge domestic demand. In the next 3-4 years, KTM is looking at India becoming the single biggest market for our bikes. We are expecting volumes to grow up to 50,000-60,000 units in that period. India is growing not just in terms of quantity of bike units sold but also in terms of demand for bigger displacement bikes. We could expect more technology-laden bikes with bigger twin cylinder engines from KTM in India soon. India is growing not only in volumes but also in displacement. For instance, look at the plans of Honda for the domestic market. They are bringing bikes with bigger engines as they are convinced that the Indian consumer has started to move up in the segment. And as players like Honda along with other Japanese bike makers bring many more such models to the Indian market, the technology gets an immediate push.
As per the announced plan, the Bajaj Probiking showrooms will now be converted into KTM showrooms, which will also sell Ninja products under the same roof. How much time will this entire process take and are you comfortable enough selling your products along with the Ninja products?
All Probiking showrooms across the country will be converted into KTM showrooms within the next 4 to 6 weeks. We have no issues, especially considering the fact that KTM and Kawasaki produce motorcycles with different characteristics. These bikes do not compete with each other and we have no problems with the Ninja being sold under the same roof. Even in Europe, KTM bikes are sold in the same showrooms alongside other bikes. In fact, we believe that the multi-brand showrooms give a clear chance to the consumer to compare all the available offerings under one roof rather than moving from one showroom to the other for the same.

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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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21/8/2012 12:32:57 am

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