Indian motorcycle manufacturer Bajaj swooped in earlier this year to rescue KTM with a deal rumored to cost $900 million. The beleaguered Austrian giant owed over $2.3 billion to its creditors before 70% of the debt was forgiven as part of its insolvency deal. While the takeover has yet to be approved by the European Commission, Bajaj is planning to cut overhead expenses by over 50% across the entire company, a drastic measure to make KTM a sustainable enterprise.
Rajiv Bajaj, the managing director of Bajaj Auto, didn’t mince words when it came to criticizing previous mismanagement at KTM during the manufacturer’s post-pandemic sales boom. The executive told Indian television channel CNBC-TV18 in an interview earlier this month, “Interestingly, of the 4,000 people currently employed, only about 1,000 are blue-collar; 3,000 are white-collar, which is perplexing because the blue-collar employees make the motorcycles.” Bajaj added that cost-cutting would focus on bureaucracy and management overhead, as well as white-collar jobs.
Mismanagement at KTM could lead to end of its MotoGP program
On the previous management structure, Bajaj also noted, “It reminds me of Mark Zuckerberg’s words about managers managing managers managing managers who manage the people who do the work.” He isn’t pulling these comments out of thin air. KTM continued to pump out motorcycles despite the post-pandemic demand fading. By December 2024, the Austrian manufacturer had 265,000 unsold bikes in its inventory, an entire year’s worth of sales.
While motorcycle enthusiasts might be happy that KTM could survive this financial crisis, there could be a few unwanted casualties. KTM’s factory MotoGP program will also be subject to the company’s cost cuts. The racing program already had an uncertain future, with a potential 2027 end date on the horizon. KTM is winless this season, but it could find its way to wins as long as promising sophomore Pedro Acosta remains in its stable. The 21-year-old Spaniard is signed to KTM through the 2026 season, giving him the option to jump ship even if KTM chooses to stay in Grand Prix motorcycle racing.
