March 13, 2006 – KTM takes “first step” into India with distribution agreement

Austria’s KTM-Sportmotorcycle AG has tapped New Dehli-based Torque Motorcycles to distribute product in India.
KTM and Torque signed a distribution agreement Jan. 25. KTM officials said the deal signifies “the first step into the Indian market.” The two companies were assisted by Deepak Sabherwal of Germany’s GEP-TEC.
KTM sold 80,356 motorcycles in 2005, up 5 percent from sales in 2004.
India is one of the largest economies in the world. The country’s motorcycle segment is broadly categorized into three segments: entry or economy, priced at about Rs 33,000 ($750); executive/commuter, Rs 40,000-45,000 ($900-$1,050); and premium/leisure, Rs 50,000 ($1,150). Until recently, most sales came from the executive segment, followed by the entry level and then the premium segment. However, sales of entry-level bikes spiked last year.
India’s motorcycle leader is Hero Honda Motors Ltd., owned by the country’s prominent Munjal family and Japan’s Honda Motor Co., which each hold a 26 percent stake. The second largest supplier is Bajaj Auto and the third largest is TVS Motor Co. Ltd.
In related news, Yamaha Motor Company is planning to set up a second wholly owned subsidiary in India. The proposed subsidiary would be 99.99 percent owned by Yamaha Motor Company, Japan, while Yamaha Motor Asia Pacific will have the remaining stake.
The new subsidiary would co-exist with the company’s current Indian subsidiary, Yamaha Motor India, and would trade two-wheelers and parts manufactured by Yamaha Motor India. Yamaha’s sales in India declined in the last fiscal year to 212,985 units from 213,767 units in the previous year.
Yamaha has hinted at the possibility of importing scooters and premium, high-powered motorcycles into India. The company’s proposed subsidiary in India also received permission from the Foreign Investment Promotion Board (FIPB) to trade other products, including ATVs, generators, multi-purpose engines, water pumps, electric hybrid bicycles, racing karts and golf cars among other products manufactured by Yamaha Group companies outside India.
KTM Power Sports AG, owner of KTM Sportmotorcycle, said sales for its first quarter ended Nov. 20 were 109.7 million euro ($130.6 million). Net profit for the period was 5.7 million euro ($6.7 million).
KTM Power Sports’ total sales for the year ended Aug. 31 were 381.9 million euro ($454.8 million). Full-year 2005 net profit was 12.1 million euro ($14.4 million). psb