It was just a couple of years ago that Pierer Mobility - owned KTM celebrated 12 straight years of record growth. Now, the company is in a dire crisis that requires a halt in production and the sacking of more than 300 employees. How did it get here?
Overproduction and quality issues are two of the main reasons for KTM’s state of affairs. In an emergency announcement released this past week, Pierer Mobility AG disclosed that KTM AG's liquidity strategy for the 2025 fiscal year will require additional funding to the tune of a "nine-figure sum in dollars." That's in the hundreds of millions for those not wanting to count zeroes.
To cut inventory, a production halt is planned in Mattighofen in Austria. This will result in around 300 layoffs. KTM states that investor talks are in progress and that it remains to be seen if these "measures are sufficient." The KTM AG group accounts for more than 95% of Pierer Mobility AG’s revenue.
For a while now KTM has been announcing layoffs and job relocations to China. The managers at Mattighofen have previously downplayed the situation, claiming that Europe's biggest motorcycle manufacturer could handle its current financial crisis on its own. However, that crisis has worsened.
It all started towards the end of last year when KTM AG decided to shift production of its “mid-range models” and certain R&D from Austria to China (CF Moto) and India (Bajaj Auto) – all of which resulted in job losses for some 300 employees in Austria. At that point, the board of directors cited discouraging economic conditions in Europe, slowing economic growth, increasing inflation, and higher interest rates as the reasons behind the moves.
Wanna know what the real problem is here? We all like new shiny things, but I've been horrified by all the unnecessary tech and huge price tags attached to bikes these days. We need a dose of realism in motorcycling! If several of the big manufacturers (HD, BMW, Ducati - I'm looking at you) don't get that message & soon - some folks will get tempted to go to the dark side & buy into those dreadful Chinese bikes. As it is, in the UK, we've seen several major motorcycle dealerships go bust - in just the last few months. We need to encourage youngsters in - not just pander to older geezers with lots of available dosh! Have a look at this excellent video "The Affordability Crisis in Motorcycling" by Yammie Noob - it says it all...
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