KTM, one of the most recognised motorcycle brands in the world, finds itself in a financial mess. KTM AG is jointly owned by Bajaj Auto and Pierer Mobility AG where in Bajaj holds 49.9 per cent stake in PTW Holdings AG, which is the parent company for KTM AG. The company has already implemented a cost reduction in the core business along with a reduction of personnel along with consolidation of all R&D activities but urgently seeks an infusion of at least 100 million euros just to stay afloat.
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A statement from Pierer Mobility AG says, “the available registration data for the overall motorcycle market in the USA for the period from January to September 2024 shows a decline of 6.3 per cent. September was also the weakest month since January 2024 with a decline of 14.6 per cent, meaning that a rapid recovery cannot be expected. In Europe, the registration data for the overall motorcycle market from January to September 2024 is at the previous year’s level due to increases in the low-price segment. However, they show a slowdown in momentum.”
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“The Executive Board is currently working on securing the financing of KTM AG, in particular on a bridge financing in the three-digit million range. To this end, discussions are ongoing both with the core shareholder Pierer Bajaj AG and with existing financial creditors. The aim is to agree a standstill agreement with the financial creditors involved for the duration of these discussions as basis for the financial restructuring.”
KTM AG revealed that its net debt grew from 775.9 million Euros at the end of 2023 to 1.47 billion Euros by mid-2024. An important note here is that KTM AG acquired 50.1 per cent stake in MV Agusta in March 2024, taking on MV Agusta’s supply chain and logistics.
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The statement from the company further says, “against the backdrop of a challenging economic environment, an even more far-reaching operational restructuring is being driven forward with the aim of reducing inventories at both KTM AG and the dealer level to an economically sustainable level by significantly reducing production volumes. Furthermore, overheads are also to be significantly reduced once again.”
Pierer Mobility AG also said that among its other brands like Husqvarna, GasGas, MV Agusta, KTM AG contributes to 95 per cent of group’s revenue. The company might stop production at KTM’s Mattighofen plant in Austria for the first two months of 2025. KTM’s financial troubles mean rough waters for Bajaj Auto as well, who no doubt is monitoring the situation and is probably talking to folks in Austria for a solution to KTM’s current problems.
KTM recently launched 10 motorcycles in India ranging from the 890 Duke R, 890 Adventure R, 1290 Super Adventure S, 1390 Super Duke R to a variety of enduro and off-road models in India barely days ago and it is unknown whether the sales of these motorcycles will be affected in India or not, since all of them will come to India as CBU’s.
