Bajaj Auto has inaugurated a new motorcycle assembly facility in the Manaus free-trade zone, marking a key step in its effort to revive the Austrian brand KTM. According to The Hindu BusinessLine, the plant, which opened on October 14, is capable of producing 20,000 units per year and was built at a cost of 20 million Brazilian Real. The site is designed to assemble completely knocked-down kits, leveraging local manufacturing to improve the brand's competitive position in the region.
This investment follows Bajaj’s acquisition of a 74.9 per cent controlling stake in KTM’s parent company in November 2025. The Hindu BusinessLine reported that the new facility replaces a previous arrangement with Dafra Motos and is located next to Bajaj do Brasil’s existing operations. Production is expected to reach 3,500 motorcycles by December, with targets of 7,000 to 8,000 units in 2027. To support this growth, the number of KTM and Husqvarna dealerships is set to expand from 12 to 30 locations across the country.
Financially, the move addresses KTM’s recent challenges, including a €24.8 million operating loss in the first half of 2026 and a restructuring that involves cutting approximately 500 jobs in Austria. The Hindu BusinessLine noted that while revenue in the first half increased by 65 per cent to €701.4 million, the group still faces negative free cash flow. The new Brazilian plant employs about 100 people directly and indirectly, with local suppliers providing a significant portion of the components used in assembly.
Rakesh Sharma, Joint Managing Director of Bajaj Auto, stated that the partnership combines Indian manufacturing efficiencies with Austrian engineering to serve the Brazilian riding community. The facility’s lineup includes the KTM 390 Adventure R and X, which are priced at 37,990 and 33,990 Brazilian Real, respectively. Fabian Steinbacher, Vice-President of Operations at KTM AG, emphasized that the same quality standards and technical requirements applied in Austria are being maintained in Brazil.
The strategy also includes an additional €2 million investment during 2027-28, with a second production shift planned from 2028. Petra Preining, CFO of Bajaj Mobility AG, highlighted the focus on local value creation and cost efficiency. By localizing production, Bajaj aims to preserve KTM’s premium positioning while improving its global financial stability through diversified manufacturing hubs.