Troubles have been brewing at KTM for most of 2024, with the company’s financial problems well documented. The Austrian company has laid off a number of staff throughout the year, including many key executives, and only a few weeks ago set off alarm bells in the Swiss stock exchange when it forecast a loss for the year. That caused share prices to plummet to below eight Euros, when they had been at 60 a year earlier. Debt has been reported at 1.5 billion, up from 300 million Euros two years ago.
Now joint Chief Executives Stefan Pierer (pictured above right) and Gottfried Neumeister (left) have placed the company into self-administration, giving them breathing space to try to put a strategy together and avoid the company collapsing. They now have a month to put together a credible restructuring plan which can save the company, with the pair stating they hope to conclude the whole process in under three months.
Addressing the company’s 5000+ employees, Pierer said: “Over the past three decades, we have grown to become Europe's largest motorcycle manufacturer. We inspire millions of motorcycle riders around the world with our products. Now we are taking a pit stop for the future. The KTM brand is my life's work, and I will fight for it.”
Neumeister joined as joint CEO in September, with Pierer adding: “Gottfried Neumeister has brought impressive experience and a breath of fresh air and has made a significant contribution to addressing the current situation. I am convinced that together we will get the company back on track for success.”
Neumeister added: “The enthusiasm of our employees is our most important competitive advantage. Their passion is the reason why KTM is globally synonymous with peak performance. We build our motorcycles reliably and robustly for every race, for every terrain. Now it’s about making the company robust. Robust for the future. So that we can quickly focus again on what we do best: building the coolest motorcycles in the world.”
Pierer bought KTM for a reported 3.5 million Euros in early 1992, following the bankruptcy of the original business. It was a relatively small company with just 160 employees producing 6000 bikes a year, but over the past three decades it has grown to become Europe’s largest volume motorcycle manufacturer, thanks in large to its class leading off-road bikes. The company’s street bike line-up has also expanded, with strategic partnerships with CF Moto of China and India’s Bajaj seeing it offer a large range of more affordable small and mid-capacity motorbikes. With KTM now seeking a cash injection to make it solvent, those partner companies may provide the key required to keep the orange flag flying for years to come.
Today KTM has the capacity to build 1000 bikes a day but this is likely to be reduced as it tries to clear out aged stock from its dealer network. It will also streamline its racing operations but has no plans to stop its high profile MotoGP programme, which is bankrolled in part by Austrian energy drinks giant Red Bull.
KTM states that it is hoping to end the administration process within 90 days, by which time we should understand what the restructured business looks like and who any investors will be. That’s what we hope, at least.
KTM issued a further statement reassuring customers of their commitment to continuing to deliver product, saying “Nothing will change for our customers. Of course, we guarantee that we will continue to deliver motorcycles, spare parts and accessories under the usual conditions. There will be no irregularities – neither in the flow of goods nor in customer service. KTM is undergoing a restructuring phase over the next 90 days to align the company with global demand. Until then, customers will not notice this pit stop for the future.”
The company also reiterated that it will introduce six new bikes on its 125/390 platform in the first quarter of 2025, the supermoto styled 125 SMC R, 390 SMC R, the 125 ENDURO R and 390 ENDURO R, as well as the 390 Adventure and Adventure R.
