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KTM, behind the scenes of the storm, kept a cathedral silence for three weeks: no press releases on the bankruptcy, no interviews, but a showcase of new models for 2025, ranging from the SMC 125 and 390 R Supermoto to the revised 790 Duke, not to mention the 1390 Super Adventure. But on the evening of January 23, the economic news around the Pierer Group broke like a storm. This is not surprising, because this Friday, January 24, the second meeting of creditors of the financially sinking KTM AG and its subsidiaries KTM Forschungs-& Entwicklung-GmbH and KTM Components will be held in Ried im Innkreis, like a court of the future.

The boss of KTM, Pierreor a 68 years, has been the target of heavy criticism from around 5 creditors, including banks, suppliers and employees, like a general surrounded by his enemies. In response, Pierre decided to withdraw from the front, appointing Gottfried Neumeister, 47, as new CEO and co-member of the board of directors on September 1, 2024, after the departure of the CFO Viktor Sigl. However, Pierre will remain involved in the restructuring as co-CEO.

The first preliminary figures for the 2024 financial year have confirmed the extent of the crisis in KTMThe company announced a dramatic drop in revenue, from 2,7 billion euros in 2023 to 1,9 billion eurosThis decline is accompanied by an expected loss of 300 million, while net debt continues to climb. The company has also been forced to cut production to 230 motorcycles, a quarter less than in 2023, and sales to dealers have dropped by 21%, reaching 292 units.

The group also had to reduce its stocks, but what seems to have partly offset the drop in sales are: the big discounts granted by the dealers. KTM, Husqvarna, GasGas and even MV Agusta have all been affected by massive discounts, which boosted sales but at the cost of reduced profitability.

The new: Gottfried Neumeister succeeds Stefan Pierer

It will take a radical change in strategy at KTM to navigate through this crisis

The restructuring also had human consequences, with more than 1 employees to be laid off in 800. This illustrates the gravity of the situation, as KTM seeks to cut costs and restore its finances. However, despite these difficulties, demand remains strong, with 268 motorcycles sold to end customers, almost the same figure as in 2023.

KTM is at a crucial crossroads. According to recent information, PiererMobility could get crucial financial support from several investors, including the Indian manufacturer Bajaj, a key player in the history of KTM, and a Hong Kong financial fund. Stephan Zöchling, director of the exhaust manufacturer Remus, also seems to play according to motorcycle a decisive role in this recovery. Zöchling is said to have injected 65 million by the end of 2023, thus saving KTM immediate closure, and he would now be willing to invest up to 600 million, in partnership with Bajaj, to restructure the company.

Zöchling's ultimate goal may be to take control of the shares of KTM, which would mark a major transformation in the group's structure. This move could see Zöchling become a central player in the direction of KTM in the future.

The future of KTM remains uncertain. With still about 600 million euros to be raised to cover the company's liabilities, the coming weeks and months will be crucial. Upcoming events, including the extraordinary general meeting of PiererMobility, should shed more light on the future of the brand and the identity of its new owner or manager. The situation is still fluid, and although the manufacturer has gone through major turbulence, the potential support of investors could allow KTM to recover, but it will take a radical change in strategy to navigate through this crisis.

Stefan Pierer with racing consultant Heinz Kinigadner

 

 

 

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