Motorcycle manufacturer Runner Automobiles is set to sign a deal with Bajaj for distribution of KTM motorcycle in Bangladeshi market
Runner Automobiles Limited will sign a deal with Bajaj Auto Limited soon to distribute high-end KTM branded motorcycles in Bangladesh.
Though the deal signing date is yet to be finalised, company sources said the agreement is likely to be stroked within the next 15 days.
Currently, Bajaj is the authorized distributor of KTM bikes in Asia. Runner will distribute completely built up (CBU) KTM bikes in Bangladesh and also provide necessary parts and spares.
The price of the brand will be a little higher initially, said Runner Automobiles Chief Financial Officer Shanat Datta, adding that Runner has a plan to assemble the bikes at their factories in future which will enable them to supply the bikes at a cheaper rate.
The chief financial officer said, "For assembling the motorbikes, the current infrastructure of Runner is enough except some machinery upgradation. KTM motorcycle assembly in the country will help us strengthen our position in the high-end segment of the motorbike market."
Shanat Datta said premium bikes now contribute 15 percent of total bike market share and they are trying to get a stronghold on that by selling worldwide renowned KTM bikes.
Runner Automobiles has already been marketing Bajaj's three-wheelers and cargo vehicles in the country. The company is also working with US motorcycle manufacturer United Motors and Italian vehicle maker Piaggio for manufacturing and distributing bikes and scooters respectively in the country.
According to the Bangladesh Motorcycle Assemblers and Manufacturers Association, around 5 lakh units of motorcycles including few scooters were sold in 2019 – 0.5 lakh units less than the 5.5-unit yearly target.
According to the association, motorcycle manufacturing with 6 lakh unit sales goal for 2020 is also likely to miss the target as sales fell one-third this year.
KTM AG (formerly KTM Sportmotorcycle AG) is an Austrian motorcycle and sports car manufacturer jointly owned by Pierer Mobility AG and Indian manufacturer Bajaj Auto.
It was formed in 1992, but the original brand was founded back in 1934. Currently, KTM AG is the parent company of the KTM Group, consisting of a number of motorcycle brands.
Pierer Mobility AG holds 51.7 percent stake of KTM AG and Bajaj Auto Limited International owns 47.99 percent.
KTM is known for its off-road motorcycles - Enduro, Motocross and Supermoto. Since the late 1990s, it has expanded into street motorcycle production.
Since 2012, KTM has been the largest motorcycle manufacturer in Europe for four consecutive years. Globally, the company is among the leading off-road motorcycle manufacturers. In 2018, KTM sold 2,12,889 motor vehicles worldwide.
KTM AG has further expanded its position as the largest European motorcycle manufacturer. It expects the highest relative growth rates above all in the ASEAN region and in India.
On May 21, 2019, the company began trading at the Dhaka Stock Exchange with the initial price of Tk100 per share. The closing price of its shares was Tk49.80 each on Thursday.
In the first three quarters of the last financial year, the earnings per share of the Runner Automobiles decreased by 23 percent to Tk2.74.
In this period, the company earned revenue of Tk308 crore from motorcycles.
In the 2018-19 fiscal year, the company recommended 10 percent cash dividend and 5 percent stock dividend for its shareholders.
Runners Automobile Ltd has a paid-up capital of Tk108 crore and around 50.04 percent of the company's shares belong to sponsors and directors. Institutional investors own 26.18 percent and general investors own 23.78 percent.