India's popular two-wheeler brand Bajaj Auto along with its Austrian partner KTM is on the verge of wrapping up a mouth-watering deal with a leading brand. And it is speculated to be the Italian motorcycle brand Ducati.
Rajiv Bajaj, MD of Bajaj Auto, while addressing shareholders at the 10th annual general meeting hinted at a possible alliance with a brand. "This will open up enormous possibilities for the company," he told the attentive gathering.
Although the company did not divulge the details of the said alliance, Bajaj is keen to get into niche areas in the market. At the meeting, Rajiv Bajaj spoke of being very close to finalising a very promising alliance but added 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," he added.
Bajaj Auto is said to be holding free cash of about Rs 13,250 crore till date. The company also seems to be confident of riding the sales further with the new brand. The Pune-based maker already has a history of turning around fortunes.
In the case of KTM, the annual sales clocked 250,000 units by 2016 from a paltry 65,000 units before Bajaj bought it.
Ducati is up for sale and Bajaj and KTM are the latest names to be heard in the race to own Ducati. Earlier, two-wheeler giants in India such as Hero MotoCorp and Royal Enfield were rumoured to be finalising deals with Ducati. Aside these, American motorcycle maker Harley-Davidson's name has also been doing the rounds.
This follows reports that alluded to German automaker Volkswagen (VW) reaching out to potential buyers for Ducati and that it had even assigned Evercore to evaluate possible options to streamline its operations to help fund a strategic overhaul. VW is said to be planning to forgo some of its non-core businesses such as Ducati or a diesel engine business to get back on track after the German group was hit by the dieselgate scam.
VW is said to be planning to forgo some of its non-core businesses such as Ducati or a diesel engine business to get back on track after the German group was hit by the 'dieselgate' scam.
VW-owned Audi had acquired Ducati for around 860 million Euros (over Rs 6,000 crore) in 2012 and currently, the superbike brand stands at a rough valuation of 1.5 billion Euros, which is almost 15 times of its core earnings.
Could Ducati finally be India's own Bajaj soon? We may have to wait a couple of weeks to know about Bajaj's new found alliance.
Source: Economic Times