Stefan Pierer, president and CEO of Austrian bike maker KTM Sportmotorcycle AG, in which Bajaj Auto has 49 per cent stake, plans to challenge the domination of Japanese bike makers. He reveals the details of the plan to Swaraj Baggonkar and Surajeet Das Gupta. Edited excerpts:
The Japanese dominate the premium sports motorbike segment globally, with the top four firms from there. How do you see yourself in this game?
Yes, the Japanese dominate the premium sports motorbike segment. But we will surely displace them. By 2020, we will beat Kawasaki and Suzuki; that's our plan. We are already in the top five players' list globally in the segment we operate in. In two years, we will go past Suzuki and in five, we will beat Kawasaki.
How do you compare with Suzuki currently?
We are already ahead of Suzuki in sales in many markets, including Japan, Suzuki's own backyard. Though Kawasaki is a long-standing partner of Rajiv Bajaj-led Bajaj Auto in the global market, KTM is openly contesting with it. KTM clocked sales growth of 20 per cent in the last calendar year at 124,000 units against 103,000 units in the previous year. In comparison, Kawasaki posted sales of around 250,000 units in 2013. So, we are halfway there.
What is your joint development strategy with Bajaj?
We are looking to shift development of all the mid-segment bikes to the Pune-based factory owned by partner Bajaj Auto. Moving forward, all bikes with engine capacities of less than 800cc will be developed jointly by both the companies; but they will be primarily made at the Chakan facility in Pune, which is going to become a hub of global manufacturing. Bikes with capacities above 800cc will still be made in Austria. Technical teams of both the companies will work together for the joint development programme just the way it had done for three products produced till date.
What is the advantage of producing these bikes here? What is the cost differential compared to producing these in Europe?
Developmental costs of bikes and engines in India are at least one-third cheaper compared to the costs in Europe. It could be more for the smaller engine bikes. So, there is a huge cost advantage. Globally, it is Honda, Yamaha, Kawasaki and Suzuki that dominate this market and many European makers have closed down. In India, too, they have the lead if you set aside the local players. I believe we can compete with them.