Bajaj Auto Ltd, Country's second-largest motorbike maker, has announced that it will develop two motorbike platforms with venture partner KTM. The company has also announced its plans to raise its stake in the Austrian firm.

The agreement with KTM covers development, technology, vendor-sourcing and distribution of street bikes for both the Indian and overseas markets.

“We are delighted with this opportunity to co-develop a range of products for both KTM and Bajaj brands and also excited by the prospect of introducing KTM products to India and South East Asia, as also to access the European market via KTM,” said Mr. Rajiv Bajaj, Managing director of Bajaj Auto.

Stefan Pierer, chief executive and chairman, KTM said, “Till now, we were in the off-the-road bikes segment. But with Bajaj, we are looking to jointly develop a high performance, water-cooled engine platform for 125 cc and 250 cc bikes.”

Bajaj Auto will also manage distribution of KTM products in South Asia. Sources said, Bajaj Auto will be spending nearly Rs 300 crore for increasing its stake in Austrian sports bike maker, KTM to 25 % cent.

“We see this as a long-term partnership with Bajaj Auto amd we are very positive about it. This cooperation with Bajaj Auto is a great opportunity to strengthen the KTM Group in its sustained growth strategy in a global environment,” Stefan said.

Bajaj Auto, which had picked up 14.9% stake in KTM last year for about Rs 300 crore, has already increased its stake to 20.9%.

Today, Bajaj Auto also signed an agreement with Japan's Kawasaki for bringing the latter's high-end motorcycles into India.

The new bikes would be sold through Bajaj Auto's Probiking showrooms across the country, a company official said.