The Pierer Mobility Group, owner of iconic brands such as KTM, Husqvarna, GasGas and MV Agusta, is going through a period of major financial turbulence, fuelling speculation. Here's a look back at the challenges faced, the denials made and the measures taken to alleviate the crisis.
Severe economic difficulties for Pierer Mobility (KTM Group)
Since the pandemic, Pierer Mobility has had to contend with difficult global economic conditions. Inflation, rising interest rates and rising production and labor costs are taking their toll on the motorcycle industry. The historically strong European and American markets are experiencing a significant drop in sales, ranging from 10 to 15%. Added to this are overproduction and quality problems which, in the words of former CEO Hubert Trunkenpolz, have "damaged the KTM brand". As of June 30, the KTM AG Group accounted for over 95% of Pierer Mobility AG's sales.
These poor performances also led to a collapse in the share price, which fell from over €50 in January to under €10 in November. As a result, Pierer Mobility has revoked its financial forecasts for 2024 and is now operating in survival mode.
The Pierre Mobility group issues a statement on its situation:
Pierer Mobility will not be able to achieve its targets for sales and earnings, as well as for the reduction of working capital and net debt in fiscal year 2024.
To limit the effects of the crisis, Pierer Mobility has launched a far-reaching restructuring involving management downsizing, redundancies and increased outsourcing. While these measures are aimed at cutting costs, they also raise the question of whether the quality standards for which KTM is renowned can be maintained.
KTM, victim of its own success?
In 1992, KTM had 160 employees and produced 6,000 motorcycles a year. A remarkable rise, given the company's current production capacity of up to 1,000 bikes a day. A fact not lost on the company's CEO when explaining the difficulties it faces.
Stefan Pierer, CEO of KTM AG:
Over the past three decades, we have become Europe's largest motorcycle manufacturer. We inspire millions of motorcyclists around the world with our products. Today, we pause to prepare for the future. The KTM brand is my life's work, and I will fight for it.
Red Bull takeover: Pierer Mobility denies everything
Mark Mateschitz and RedBull can take heart from Max Verstappen's fourth consecutive F1 title.
Despite speculation in the Austrian media, Pierer Mobility has categorically denied any talks with Mark Mateschitz, heir to the Red Bull empire, about a possible stake in the group. " There are no ongoing discussions," the group said in an official statement. This denial comes at a time when Red Bull, KTM's main competition sponsor, is seen by some as a potential financial savior.
Commitment to sport: an unshakeable pillar
Against this difficult backdrop, KTM refuses to give up any ground in the world of competition. The brand is committed to maintaining its sporting programs in all disciplines, including participation in MotoGP 2025, where it will field Pedro Acosta and Brad Binder in the factory team. Although KTM has not won a Grand Prix since 2022, the goal of returning to the top remains intact. At the same time, KTM continues to invest in grassroots sport, such as the Junior Rookies Cup program, to ensure a competitive next generation
Pit Beirer, Director of Sport at KTM, was keen to reassure his world:
Our commitment to competition, including MotoGP, remains intact despite the crisis. We remain in all the series in which we participate. We'll do everything we can to stabilize the company and get through this difficult phase together.
KTM: Two of us, supported by over 5,000 employees working behind the scenes
It was a busy start to the week for KTM, as the two members of the company's Management Board decided to have their say. Stefan Pierer, CEO of KTM, and Gottfried Neumeister, co-CEO since September 2024, addressed the company's 5,000 employees on Tuesday. Together, they unveiled an ambitious plan to overcome the current financial challenges and secure a solid future for KTM."The enthusiasm of our employees is our greatest asset. Thanks to their passion, KTM remains synonymous with top performance," Neumeister emphasized. Pierer also praised his contribution:"With his experience and vision, Gottfried plays a key role in this period of transformation."
The duo announced the launch of a self-administered legal restructuring procedure, scheduled for November 29, with the aim of concluding it within 90 days. Their ambition: to keep KTM at the cutting edge with ever more Ready To Race motorcycles.
So, to overcome this crisis, Pierer Mobility is exploring several options. But while these measures testify to a desire for resilience, they also illustrate a critical turning point. Will KTM, a symbol of performance and innovation in the world of two-wheelers, manage to emerge from this tumult? On Monday November 25, the group, via its subsidiary Pierer Mobility, announced that it was in talks with its creditors and main shareholder, Pierer Bajaj, to obtain bridging finance worth hundreds of millions of euros. The future looks as uncertain as ever, but the challenge is worthy of its reputation.
