Bajaj Auto, India's largest two-wheeler exporter, and its Austrian partner KTM are very close to finalising the buy out of Europe's iconic motorcycle brand Ducati.
Recently at Bajaj's annual general meeting, Rajiv Bajaj, MD of Bajaj Auto, revealed that they are very close to finalising an alliance. But he came short of confirming if the alliance is with Ducati.
Volkswagen, whose Audi division controls Ducati, has received numerous tentative bids including India's Royal Enfield, Hero MotoCorp and even American motorcycle brand Harley-Davidson is in the fray to buy Ducati.
Rajiv Bajaj said, "We are very close to finalising a very promising alliance, it's not certain, that it will happen, but if it happens, it will open up enormous possibilities for the company. That is why we keep our money (cash on books) with us, so, once in a while, when an opportunity comes along, we are ready."
Since Bajaj acquired more than 48 percent stake in KTM, the Austrian brand has witnessed its volumes grow from 65,000 per annum almost a decade back to 2.5 lakh units planned for 2017.
On the need for the Ducati in Bajaj's portfolio, Rajiv Bajaj said, "KTM rides in a space which is sporty riding. There is also another world out there which is the world of easy riding, the world of Harley-Davidson, Triumph and Royal Enfield. This segment so far was the only missing piece in our puzzle."
"We are very close to finalising an alliance; it will take a week or two to announce. If it happens, it will open up enormous possibilities because that is a brand, that is the format of products that is even more suitable. So if KTM and Husqvarna can do half a million motorcycles a year, believe me, they can do a million motorcycles together," added Mr Bajaj.
While Bajaj takes care of the commuter and premium motorcycle segments, KTM offers products for segments in racing and sports bikes. With Ducati in its product lineup, Bajaj will be able to target the premium motorcycle customers.
Ducati sold 55,451 units in 2016. Now partnering with Bajaj, which can manufacture motorcycle at an economical cost, Ducati can enter the mid-engine capacity segment, thereby increasing unit sales.