KTM has announced that it has tied up with Husqvarna to launch its bikes in India within 2 years. Husqvarna is a Swedish brand known for its Enduro and Motocross bikes. It used to be owned by MV Augusta before it was taken over by BMW in 2007. And earlier this year, KTM took ownership of the company after BMW decided that things weren’t working out between them.
Stefan Pierer, KTM boss, said at a recent press conference that thought their primary focus is KTM bikes, they will also facilitate Husqvarna’s entry into the Indian market, which is pegged to happen some time in 2015. Also, the new entrant’s bikes will roll out of Bajaj’s plant in Chakan.
The Economic Times had this to say about the partnership: “The acquisition will strengthen KTM’s presence in Europe and will help the Austrian brand maintain its leadership position. KTM recently overtook BMW, and the acquisition will help KTM create a second brand in the region. KTM is expected to gain synergies on technology, distribution and the economies of scale from this acquisition. Husqvarna and KTM compete in the European market on price, but these brands have different attributes. KTM may utilize its own aggregates like the engines and vehicle platform to develop new Husqvarna motorcycles in the future, said people close to the development.”
Husqvarna has been on a bit of a tough ride for the past few years. In 2012 BMW and KTM made 100,000 sales whereas Husqvarna did 11,000. Despite this being a 15.7 percent upturn in the number of Huskies (as Husqvarna’s bikes are also known) sold, BMW felt that it was not good enough by its standards and decided to renounce the Swedish company. BMW’s press release post the severance said, ““In the context of changing motorcycle markets, demographic trends and increasing environmental demands, BMW Motorrad will expand its product offering to exploit future growth potential. The focus of the realignment will be on urban mobility and e-mobility.” BMW was basically saying that it was finding it too hard for a company that is associated with luxury like itself to be seen with another that makes dirtbikes.
KTM, on the other hand, has been having a dream run in India. From being seen as the outsider with a following to the country’s very own manufacturer of adrenaline rushes on wheels, KTM has charted a course that will last a long time to come. The tie-up between the two companies is interesting because KTM and Husqvarna compete in the same segment in the European market, though of late the latter hasn’t really been putting up a fight. So it will be interesting to see if the Austrian company allows its subsidiary that will rival its own bikes in the Indian market. For example, on of the Huskies that is being primed to enter the Indian market is the Husqvarna TE 125. Thought the RC 125 isn’t available in India yet, it is made here and exported. So we will be waiting eagerly to see how the venture plays out and affects the standing of both companies.