Bajaj Auto to produce Husqvarna bikes at Chakan

Bajaj Auto will begin producing the Husqvarna range of motorcycles from its Chakan plant near Pune by the end of next year.

Founded in 1903, Husqvarna is the world’s second-oldest motorcycle brand, which KTM of Austria acquired from BMW in 2013. Bajaj Auto, in turn, owns 48 per cent in KTM and has been manufacturing its Duke and RC-branded bikes from the Chakan facility. These are shipped out to Europe, the US, Australia and, more recently, the ASEAN region.

Bajaj first acquired a 14 per cent stake in KTM in 2007, and the bonding has strengthened since then. Now, with Husqvarna, the plan is to produce the Vitpilen 401, Svartpilen 401 and Vitpilen 701 motorcycle models in Mattighofen, Austria, followed by a launch in early 2018.

Later, during the course of the year, production of Vitpilen 401 and Svartpilen 401 will be transferred to Bajaj Auto’s Chakan plant. Now, with Husqvarna due to complement the production line, the partners have targeted an annual number of over two lakh units in the next four years, twice as much as the present volumes.

S Ravikumar, President (Business Development), Bajaj Auto, told BusinessLine over telephone from Pune that the Husqvarna range would be retailed in KTM stores. Apart from the Indian market, they will be shipped to other parts of the world from Chakan. Since the time of its acquisition by KTM four years ago, Husqvarna sales have grown over three times and reached record levels of over 30,000 motorcycles in 2016.

Interestingly, Stefan Pierer, CEO of KTM, had hinted at a larger role with Bajaj Auto in an interview with BusinessLine barely weeks after the Husqvarna acquisition was done in early 2013. At that time, it was perceived as a traditional Swedish off-road bike brand which would typically need an aggressive product line-up.

“As in cars, motorcycle engine development is absolutely critical. We are already working with Bajaj for (up to) 390cc displacements and can explore specific applications for Husqvarna based on the KTM concept. We can also look at bringing Husqvarna back into the competitive world, which means using synergies with the KTM platform,” Pierer had said.

Given these changing dynamics, Bajaj Auto’s Chakan plant would have to play a vital role as a manufacturing hub, especially with KTM keen on growing its global presence beyond Europe to the ASEAN region.

As Pierer reiterated, the facility will be the “backbone for emerging markets” and it was in this context that he believed Husqvarna had come at the right time where joint product development will take the growth story to the next level. Eventually, KTM-Husqvarna-Bajaj could emerge as a combined powerhouse for emerging markets.

Pierer said the company was exploring all the possible synergies likely with Husqvarna as well as those areas which made sense to KTM. “We will go in for a step-by-step approach before we integrate the brand into the whole group,” he added.

During the four years since this interview, the script has clearly worked according to plan, and the stage is now set for Husqvarna to go global with Bajaj-KTM as its critical growth lever.