Bajaj Auto trains focus on cost cuts and tighter governance for KTM after helping to secure funds to clear its loan

Subscribe to enjoy similar stories.NEW DELHI: After helping to secure funding to clear KTM’s dues, Bajaj Auto has shifted focus to cost cutting and tighter governance at the Austrian premium motorcycle maker, its largest acquisition, a top executive told Mint.

The cost-reduction initiatives include a review of sourcing strategies and identification of synergies, while Bajaj steps up its role on KTM’s supervisory board, Bajaj Auto executive director Rakesh Sharma said.

“Our support to them started with the first phase, where we had to get the liquidity organized. The second was putting in the top management.

The third phase is now the execution of the turnaround plan, one important constituent of which is reduction in costs, and capturing of synergies, which has got several work streams,” Sharma said in an interview. “We believe that the team has to be run as an independent company.”In the current structure, Bajaj Auto is closely involved with KTM through the supervisory board, which oversees the execution of strategy and governance practices, while the management board runs independently and is responsible for adhering to best governance practices.“It's a very premier European and prestigious sports bike manufacturer with a very deep positioning, and very niche strong positioning, and we wanted to retain that and run independently,” Sharma added.Bajaj's efforts to revive the premium European motorcycle brand coincides with TVS Motor Company's efforts to kickstart revival of the premium British bike brand Norton, which will turn up its product offensive in the current financial year.For Bajaj Auto, the turnaround of the Austrian motorcycle maker is crucial given that it is its largest acquisition and plays a major role in