KTM GROUP ACCELERATING TOWARDS THE ASIAN MARKET
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KTM GROUP
ACCELERATING TOWARDS THE ASIAN MARKET WITH SUPPLY CHAIN EXCELLENCE WRITTEN BY
LAURA MULLAN PRODUCED BY
CHARLOTTE CLARKE
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LUCA MARTIN, MANAGING DIRECTOR AT KTM ASIA MOTORCYCLE MANUFACTURING INC., REVEALS HOW THE FIRM IS READYING ITS SUPPLY CHAIN FOR ITS NEXT FRONTIER: ASIA
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f you’re a motorcycle enthusiast, KTM Group will be a company firmly on your radar. Offering everything from trailblazing street
bikes to dirt-shredding motorcycles, KTM has earned its reputation as Europe’s largest motorbike manufacturer and now, on the road ahead, it has 04
its eyes firmly set on a new horizon: Asia. One integral player at the heart of this expansion is Luca Martin, Managing Director at KTM Asia Motorcycle Manufacturing Inc. Martin is a seasoned professional when it comes to two-wheeled vehicles: he started his career as a mechanical engineer, specifically working on vehicle engine development where he used artificial intelligence (AI) to optimise mechanical components. His next career move saw him at Ducati. “I helped to create the complete supply chain of Ducati in Asia from scratch,” Martin recalls. “We had to find new suppliers, develop new components locally to optimise the factories out there.” This was no mean feat, but Martin helped to establish Ducati’s Asia presence and therefore when KTM Group readied itself to enter the Asian market, Martin was an ideal candidate for the job.
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“ WE STARTED PRODUCTION FOR BOTH LOCAL AND EXPORT MARKETS JUST OVER A YEAR AGO AND WE ARE ALREADY PRODUCING MORE THAN 7,000 UNITS A YEAR”
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— Luca Martin, Managing Director at KTM ASIA Motorcycle Manufacturing Inc
As part of this ambitious strategy, the company forged a US$2mn joint venture with Ayala Group’s offshoot Adventure Cycle Philippines Inc and a new subsidiary, KTM Asia Motorcycle Manufacturing Inc. (KAMMI), was born. Today, the company produces bikes such as the KTM 200 Duke and RC 390 at its state-of-the-art manufacturing facility in Laguna, right in the heart of the Philippines, offering the perfect springboard for KTM Group to enter Asia. “We started production for both local and export markets just over a year ago and we are already producing more than 7,000 units a year,” enthuses Martin. “We have big hopes for the Southeast Asian market.” Tackling a new location is a challenge for any firm, but with its strong local partnerships, KTM Group has been able to hit the ground running. “Thanks to Ayala’s support, we’ve been able to start production in a very short time: we’ve been able to move from a startup to a scaleup company,” Martin observes. “They really helped us establish strong relationships with local suppliers and this is one of the key advantages of setting up this joint
CLICK TO WATCH : ‘KTM FACTORY RACING 2019 DAKAR RALLY REVIEW | KTM’ 07 venture.” As one of the largest and
suppliers are used to working in the
most diversified business groups in the
automotive segment and they’re used
Philippines, Ayala Corporation is
to helping manufacture millions of cars
present in markets including real
every year. Our challenge is to help the
estate, banking, telecommunications,
supplier understand that by working
water, power, industrial technologies
with a well-known brand, there’s more
and more. This has allowed KTM
opportunity to grow. In the long term,
Group to gain a deep understanding of
we hope to increase our more and
the Philippine market.
more bikes.” In doing so, KTM Group is
Entering this new market was a
not only helping to meet the burgeon-
challenge from a supply chain per-
ing demand for its motorbikes, it’s also
spective as it meant developing a new
helping to boost the local economy
network from scratch. However, this is
and generate employment for more
a challenge that KTM Group has taken
Filipinos. “Many of our suppliers are
head on. “Many Asian companies and
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(SMEs),” explains Martin. “By working
working with some partners in Asia to
with us, they get the chance to grow
develop a supplier rating platform
not only in terms of revenue, but also in
where each and every supplier can log
terms of qualities and process.”
in, create a profile and get feedback
Always keen to race ahead, KTM
about their performances. I think this
Group has also sought to digitalise its
digital approach is important for the
supply chain. “We’re finding new ways
future of procurement.” Data is
to get in contact with suppliers,” Martin
probably one of the most powerful
says. “In the past, we used to get
tools that supply chain professionals
hundreds of emails every day with
have today, however whilst technology
different company profiles and most of
is set to disrupt the sector for good,
the time I simply didn’t really have the
Martin affirms that a human approach
time to physically go through all these
is also vital. “If we want to build a very
potential prospects. Now we are
strong relationship with suppliers, I
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E XE CU T I VE PRO FI LE
Luca Martin Turnaround CEO with 10+ years of experience in the automotive business. Developing high-quality business strategies and plans ensuring their alignment with short-term and long-term objectives. Leading and motivating directors to advance employee engagement, developing a high performing managerial team. Setup of operational and financial goals, informing and advising Board members, managing the organization’s resources, promoting the enterprise to its stakeholders, recommending a proper budget, with an emphasis on cost savings. Start-up approach on new operations. Business angel and startup mentor/investor.
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1953
Year founded
â‚Ź1.14bn Approximate revenue 2016
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HQ
Mattighofen Austria
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Twice the power, Twice the possibilities
LEARN MORE
www.vpic-group.com | pndat@vpic-group.com
CLICK TO WATCH : ‘THE JOURNEY OF A LEGENDARY BRAND HUSQVARNA MOTORCYCLES’ 13 think it’s important that we visit them. We need to create a face-to-face relationship,” he asserts, “but at the same time, I think that digital platforms can help buyers be more productive because they can count on reliable data to select suppliers.” As well as developing a new supply chain, KTM Group also had to contend with the challenge of getting the right talent and expertise on board, however when your brand is one associated
“ THANKS TO AYALA GROUP’S SUPPORT, WE’VE BEEN ABLE TO START PRODUCTION IN A VERY SHORT TIME: WE’VE BEEN ABLE TO MOVE FROM A STARTUP TO A SCALEUP COMPANY” — Luca Martin, Managing Director at KTM ASIA Motorcycle Manufacturing Inc
with adrenaline and speed it seems that finding employees who are passionate about the product isn’t too w w w.k t mgrou p . com
Proud to be part of.
Creating value for all.
Creating value by combining the power of innovation and product quality and passionately creating world class solutions catering to two wheeler, passenger cars, commercial vehicles, construction and agricultural machines and rolling stocks. Visit us at: motherson.com
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wiring harness rearview mirrors moulded plastic parts and assemblies injection moulding tools moulded and extruded rubber components modules and systems machined metal products cutting tools aluminium die casted products sheet metal parts thin film coating metals IT services wireless power hot stamped parts
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KTM Engine Factory in Mattighofen
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difficult. “We’re lucky that we produce a product which you could call an entertainment product so you can tell talent, ‘Look, if you are passionate for the motorcycles, we are producing one of the best that you can find in the market’,” says Martin. “This is a very valuable retention tool. A lot of KTM employees are passionate about motorcycles or are even professional riders. On the other hand, we do believe that this isn’t the only thing we offer. We also try and onboard local
“ KTM GROUP HAS RECORDED RECORD VOLUME PRODUCTION EIGHT YEARS IN A ROW” — Luca Martin, Managing Director at KTM ASIA Motorcycle Manufacturing Inc
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“ IF WE WANT TO BE SUCCESSFUL ABROAD, WE NEED LOCAL TALENT”
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tion, the Asian market will play a key role in its future growth strategy. “KTM Group has recorded record volume production eight years in a row. Every year we’re producing more and more bikes and in 2018, we saw a total sales increase of about 10% to 261,000
— Luca Martin, Managing Director at KTM ASIA Motorcycle Manufacturing Inc
well-known brands for off-road in
people who believe in our values. If we
equipment manufacturers) but the
want to be successful abroad, we need
future growth of KTM Group cannot
local talent because only they can help
be as strong without Asia.”
KTM better understand the local culture.” The Philippine plant is KTM Group’s
motorcycles. KTM is one of the most North America and in Europe we are now one of the biggest OEMs (original
KTM Group’s reputation precedes it. To disrupt the Asian market KTM Group
third manufacturing facility, with its first
will undoubtedly rely in on its race-
located in its home country of Austria
proven success. Its distinctive orange
and the second in India. In selecting
motorcycles have crossed the winning
Asia as a key market, Martin contends
line at 18 Dakar Rallies in a row and
that as the group ramps up its produc-
KTM racers have gained 281 world
KTM Board of Directors
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CO MPAN Y FACT S
• 281 world championship titles up until now • 18 consecutive wins at the Dakar Rally • Europe’s biggest motorcycle manufacturer • Total sales 2018 increase of about 10% to 261,500 motorcycles
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“ WE TRY TO TRANSFER WHAT WE’VE LEARNT FROM OFFROAD IN TERMS OF PRODUCT QUALITY AND EASE OF MAINTENANCE AND BRING THAT TO OUR STREET BIKES. WE ALWAYS WANT TO BE ON TOP OF TECHNOLOGY” — Luca Martin, Managing Director at KTM ASIA Motorcycle Manufacturing Inc
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championship titles up into now. Martin wants to bring this same world class quality to Asia. “We want to show the Asian market that KTM represents
We always want to be always on top of
quality and more importantly, we’re
technology.” KTM Group has also
ready to race. We want to bring this
shrewdly kept track of emerging trends
racing spirit to Asia and we truly believe
in the motorcycle space. For instance,
there will be a bright future for big bikes
whilst the firm noticed a dip in demand
in this market.” The firm won’t just rely
for superbikes they tapped into the
on its legacy though: it’s keen to invest
growing uptick for smaller bikes.
in new innovation so that it can create
“This was a strong move by KTM,”
the best race machines in the market.
notes Martin. “We focused on smaller
“One of our biggest competitive
displacement bikes but our competi-
advantages is that we try to transfer
tors didn’t.”
what we’ve learnt from offroad in terms
Just as consumer demands are
of product quality and ease of mainte-
shaking up the market, the rise of
nance and bring that to our street bikes.
electrification could always change the
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motorcycle market for good. “We are
a challenge but with the right partner
now in an era of new mobility,” Martin
we will be able to prepare for this shift.”
asserts. “We truly believe that sooner
Looking ahead, the future is bright
or later they will be a move to electric
for KTM Group. The firm has cemented
motorcycles. We have been developing
its position as Europe’s largest
off-road electric bikes for many years
motorbike manufacturer, and now
already. We’re seeing a shift in that
Asia’s motorheads need to look no
direction and we want to be part of this
further if they want to get their hands
movement.” This market swing won’t
on a high-quality race machine.
come without its challenges though. Whilst the weight of a battery may only slightly alter the performance of a car, it can “completely change the handling of a bike”, according to Martin. “This is w w w.k t mgrou p . com
KTM Group Stallhofnerstrasse 3 5230 Mattighofen Austria T +43 7742 60 00 www.ktmgroup.com