euro adhoc: KTM Power Sports AG / Joint Ventures/Cooperation/Collaboration / KTM and Bajaj Agree Upon Joint Projects (E)

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05.11.2007

Mattighofen/Pune - The Second largest European sport motorcycle manufacturer KTM
Power Sports AG, and the Second largest Indian Motorcycle manufacturer Bajaj
Auto Ltd, announced wide-ranging co-operation on Monday 5th November 2007.

Development of engine and vehicle platforms
The KTM Group provides the know-how for the joint development of high-efficient
water-cooled 4-stroke engines (125-ccm and 250-ccm), which provide KTM the basis
for street motorcycles in the new street entry segment. The joint developments
will also be available as basis for Bajaj-products.

Through the cooperation with Bajaj, KTM extends its product portfolio for the
future with a 125-ccm street product line, in addition to the present 1190-ccm,
990-ccm and 690-ccm platforms developed and manufactured in Austria. With the
introduction of the new EU driving licence which allows riding of 125-ccm
motorcycles with a car driving licence in all EU member States, KTM will be in a
position to offer innovative premium entry models in the street segment.

Natural hedging-potential due to sourcing of entry motorcycles in India
The sourcing for the production and the assembling of these new models in the
street entry segment will occur in India. Thus the KTM Group is able to develop
a natural hedging-potential for its USD-exposure in the future.

Strengthening of the KTM sales structure in South - Eastern Asia
Bajaj takes over the sales of KTM products in India and further countries in
South - Eastern Asia. Through this cooperation KTM opens up the Asian region and
receives new opportunities for the sales of the entire KTM-product portfolio.

Sustained growth in the future
The publicly listed Bajaj Auto Ltd. has emphasized the strategic importance of
these projects through the acquisition over the capital markets, through its
100% Netherlands subsidiary - Bajaj Auto International Holdings BV - of an
interest of 14.5% in KTM Power Sports AG.

Stefan Pierer KTM CEO welcoming Bajaj participation said:
"The Executive Board of KTM Power Sports AG appreciates this measure and sees in
the cooperation a great chance to strengthen the KTM Group in its sustained
growth strategy in a global environment."

Commenting on the co-operation, Bajaj CEO Rajiv Bajaj said:
"KTM´s sharp brand positioning, differentiated designs, and hyper performance
have inspired Bajaj to invest in this participation.

Bajaj is delighted with this opportunity to co-develop a range of products for
manufacture by Bajaj for both KTM and Bajaj brands. Equally Bajaj is excited by
the prospect of introducing KTM products to India and South East Asia, as also
to access the European market via KTM.

Bajaj is confident that this co-operation represents a long term win-win
situation given the entirely complementary and conflict free nature of the
partners in brand positioning, market presence, product plans and supply chain
structure".

About KTM Power Sports AG
KTM Power Sports AG is a worldwide leading manufacturer of power sports
vehicles. KTM has won more than 136 World Championship titles and seven times
the Rallye Paris-Dakar. The operation core company, KTM-Sportmotorcycle AG,
develops and manufactures competition off-road and street motorcycles.
KTM-Sportcar AG builds the light-weight sports car X-Bow, KTM´s first step into
the automotive field. With more than 1,930 employees, the KTM Group earned
revenue of 566.1 Mio. EUR (INR 32 Billion) in fiscal year 2006/07. Over 23 sales
subsidiaries distribute KTM products to their 1,400 independent KTM dealerships
worldwide.

KTM is a Vienna Stock Exchange listed Company with market capitalisation of Euro
390 million (INR 22 Billion).

KTM is a group company of CROSS Industries AG, indirectly owned by & managed by
Messrs Stefan Pierer and Rudolf Knunz. The Cross-group´s other businesses
include among others racing motorsports systems, composites, etc

Further information about the KTM Group is to be found at www.ktm.com.

About Bajaj Auto Ltd.
Bajaj Auto Ltd, is India´s second largest motorcycle manufacturer and ranks
among top five motorcycle producer in the world. In the fiscal year 2006-07
Bajaj produced and sold about 2.38 million Motorcycles and over 320,000
automotive 3-wheelers. Its Motorcycle brands the Bajaj Pulsar DTSi, the Bajaj
Discover DTSi, the Bajaj XCD DTS-Si are extremely popular in India, South &
South East Asia, Africa and Latin & Central American Countries. Bajaj exported
over 440,000 units (over 16% of its production) in 2006-07. It achieved
consolidated revenues of Rs 166 Billion (Euro 2.9 Billion). Automotive segment
accounted for 57% of Revenues, Financial Services 40% and Investment & other
activities the balance. Consolidated net profits for FY 07 stood at Rs 12.5
Billion (Euro 220 Million)

Bajaj is listed on Bombay Stock Exchange and Indian National Stock Exchange with
market capitalisation of INR 245 Billion (Euro 4.3 Billion). Its GDRs are listed
on the London Stock Exchange.

Bajaj Auto is the flagship of the Bajaj group of Companies. Bajaj Group´s other
interests include Life & General Insurance (in partnership with Allianz of
Germany). Retail Financing, Steel and Electrical Appliances. Mr Rahul Bajaj
(Member of the Upper House of Indian Parliament) heads Bajaj Group of Companies.

Mr Rajiv Bajaj is Managing Director and CEO of Bajaj Auto Ltd.

Further Information about Bajaj Auto Ltd. is to be found at www.bajajauto.com.

On 14.5% participation transaction Bajaj has been advised by Asian Capital
Partners Group, Hauser Partners & Raiffeisen Centro Bank AG.

Currency rate 1 Euro = 56.88 INR

Press Contact - KTM : wilfried.stock@ KTM.com
Press Contact - Bajaj: amitnandi@ bajajauto.co.in

Further inquiry note:
KTM Power Sports AG
Mag. Wilfried Stock
Tel.: +43(0)7742/6000-216
mailto:wilfried.stock@ktm.com

end of announcement euro adhoc 05.11.2007 10:11:05
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emitter: KTM Power Sports AG
Stallhofnerstraße 3
A-5230 Mattighofen
phone: +43(0)7742/6000-0
FAX: +43(0)7742/6000-5216
mail: ir@ktmpowersports.com
WWW: www.ktm.com
sector: Technology
ISIN: AT0000645403
indexes:
stockmarkets: official dealing: Wiener Börse AG
language: English

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