KTM secures future with Bajaj loan

Bajaj Auto International Holdings BV (Bajaj Auto), one of India’s largest motorcycle manufacturers and a KTM partner since 2007, is now essentially the owner of the Austrian motorcycle company.

In late May, Bajaj Auto provided a 600 million Euro (AU$1.05B approx.) loan, split across KTM AG (450 million) and parent company Pierer Mobility AG (150 million), to satisfy KTM’s creditors under a restructuring plan that was approved back in February. At the conclusion of these restructuring proceedings, Stefan Pierer will step down from the board of Pierer Mobility AG.

The expanded alliance between Pierer Mobility AG and Bajaj Auto has resulted in the creation of Pierer Bajaj AG, of which Pierer Industrie AG holds a 50.1 per cent stake, with the remaining 49.9 per cent held by Bajaj Auto. A call option agreement enables Bajaj to acquire the shares of Pierer Industrie AG and thus indirect control over Pierer Mobility AG until the end of May 2026. However, this would require regulatory approval.

What this means for KTM in the short term is that they should be able to resume production for the first time since December, but whether motorcycles will continue to be built in Austria long term is unclear. Bajaj already build motorcycles of up to 400cc for KTM in India, but may now also manufacture larger-engined models – at less cost than what they can be built for in Europe – in order to make the business viable. Despite this, KTM AG CEO, Gottfried Neumeister, says the existing facility at Mattighofen in Austria will still be the heart of operations.

"The existing sites - in particular our main plant in Mattighofen/Munderfing - will remain the basis for our future success,” said Neumeister. “This means that we will continue to be an important employer for the entire region.

“In view of this new, second opportunity, we at KTM feel deep gratitude and humility towards all those within and outside our group of companies who have made it possible.

“I would also like to take this opportunity to thank Stefan Pierer on behalf of all those who have accompanied us along the way. He laid the foundation for one of the world's best-known motorcycle brands, which has a unique community."