Words by: Phil West
Published on 2 December 2024 | 0 min read
You’re likely to have seen news of KTM’s difficulties. The Austrian giant – currently Europe’s biggest motorcycle manufacturer – announced on November 26 it was entering a period of ‘self-administration’ following a series of crises resulting in a crashing share price and reported debt of 1.4bn euros.
The consequences of this have included a boardroom reshuffle ousting four directors to leave just long-time CEO Stefan Pierer and recently appointed co-CEO Gottfried Neumeister. The company is meanwhile well into a 90-day period of ‘self-administration’, during which it seeks to restructure to avoid insolvency. Beyond that, however, little is certain. So, how did KTM get to this point? And what does all it mean for current – and perhaps future – KTM buyers, and those of its partner brands like Husqvarna and MV Agusta?
The consequences of this have included a boardroom reshuffle ousting four directors to leave just long-time CEO Stefan Pierer and recently appointed co-CEO Gottfried Neumeister. The company is meanwhile well into a 90-day period of ‘self-administration’, during which it seeks to restructure to avoid insolvency. Beyond that, however, little is certain. So, how did KTM get to this point? And what does all it mean for current – and perhaps future – KTM buyers, and those of its partner brands like Husqvarna and MV Agusta?
It all appears to be the cumulative result of a number of factors. To recap, KTM had been one of the success stories of European motorcycling given as recently as the early 90s it was a small-scale off-road specialist with barely 160 employees building 6,000 machines a year. Pierer took over in 1992 and, starting with the first Duke in 1994, expanded into road machines from where it grew quickly, particularly after launching its first 950 Adventure V-twin in 2004.
Today, KTM is a major force in MotoGP, part owned by India’s Bajaj, has a partnership with CF Moto in China, bought Husqvarna in 2013, GasGas in 2019 and MV Agusta in 2022, taking a controlling share in the latter just this year. It now employs over 5,000 workers and has the capacity to build 1,000 bikes a day. However, after a successful post-Covid period, its fortunes quickly unravelled. A particularly aggressive series of model launches for 2024, including the new 1390 Super Duke and 990 Duke, unfortunately then coincided with growing reports of camshaft issues on its 790cc/890cc LC8c parallel-twin engines and an wider market slump.
Today, KTM is a major force in MotoGP, part owned by India’s Bajaj, has a partnership with CF Moto in China, bought Husqvarna in 2013, GasGas in 2019 and MV Agusta in 2022, taking a controlling share in the latter just this year. It now employs over 5,000 workers and has the capacity to build 1,000 bikes a day. However, after a successful post-Covid period, its fortunes quickly unravelled. A particularly aggressive series of model launches for 2024, including the new 1390 Super Duke and 990 Duke, unfortunately then coincided with growing reports of camshaft issues on its 790cc/890cc LC8c parallel-twin engines and an wider market slump.
As a result, KTM sales in the first half of 2024 were down a whopping 27 per cent on the previous year, prompting workforce layoffs, a production ‘pause’, aforementioned board reshuffle and a forecasted loss for the first time in years. That in turn caused share prices to plummet below 8 euros (from 89 euros in September 2021) while company debt – exacerbated by taking that controlling share in MV Agusta – is now reported at 1.4bn euros, up from 300m euros two years ago. As result a market capitalisation, or company value based on its share price, of just 345m euros yet a debt over four times that spells just one thing – trouble.
So, how does all this affect you? Well, in some ways not at all, in others a little and, in the long term, potentially quite a lot. Some of it perhaps even for the better. First, immediately following the ‘self-administration’ announcement KTM was quick to assure customers and new customers they had nothing to fear. “Nothing will change for our customers,” management claimed just the following day. You’d be forgiven for thinking ‘they would say that, wouldn’t they’ but it’s almost certain a brand as big as KTM will survive in some form and continue to sell and service bikes while honouring its obligations to customers even if its company structure and ownership changes. At the time of writing expectations of Bajaj taking a bigger share had, according to reports, fallen flat while CF Moto’s future involvement is not yet known.
So, how does all this affect you? Well, in some ways not at all, in others a little and, in the long term, potentially quite a lot. Some of it perhaps even for the better. First, immediately following the ‘self-administration’ announcement KTM was quick to assure customers and new customers they had nothing to fear. “Nothing will change for our customers,” management claimed just the following day. You’d be forgiven for thinking ‘they would say that, wouldn’t they’ but it’s almost certain a brand as big as KTM will survive in some form and continue to sell and service bikes while honouring its obligations to customers even if its company structure and ownership changes. At the time of writing expectations of Bajaj taking a bigger share had, according to reports, fallen flat while CF Moto’s future involvement is not yet known.
Second, for some, it’s actually a good thing. KTM’s poor 2024 sales resulted in a glut of unsold bikes and a raft of discounts being offered. You don’t have to look hard, for example, to find dealers offering well over £2,000 off the new 1390 Super Duke Evo. Not great news for the dealers already battling a stagnant market but there could be some bargains if you’re in the market.
Third, beyond KTM itself it’s hard to imagine the family of brands it includes continuing as it has. Which, while sad in many ways, may yet have some silver linings and a streamlining of the business. Its future in MotoGP has to be in question now, and Husqvarna, GasGas and – especially – MV Agusta are perhaps vulnerable given the difficulties faced by KTM dealers in shoehorning these brands into their businesses. But whatever happens there and with the camshaft issues on the LC8c engine you’d have to hope any new owner, or management, will surely resolve these problems once and for all. We’ll have to wait and see, of course. All will begin to come clear from April after the 90-day self-administration period launches into a new era, but there is hope for KTM yet. Bargain hunters can by all means snap up a deal right now, but anyone with longer ambitions might be better off waiting until then to see what happens once the dust settles. Photos: Felix Steinreiber/Marco Campelli/Philip Platzer/Simon Cudby c/o KTM
Third, beyond KTM itself it’s hard to imagine the family of brands it includes continuing as it has. Which, while sad in many ways, may yet have some silver linings and a streamlining of the business. Its future in MotoGP has to be in question now, and Husqvarna, GasGas and – especially – MV Agusta are perhaps vulnerable given the difficulties faced by KTM dealers in shoehorning these brands into their businesses. But whatever happens there and with the camshaft issues on the LC8c engine you’d have to hope any new owner, or management, will surely resolve these problems once and for all. We’ll have to wait and see, of course. All will begin to come clear from April after the 90-day self-administration period launches into a new era, but there is hope for KTM yet. Bargain hunters can by all means snap up a deal right now, but anyone with longer ambitions might be better off waiting until then to see what happens once the dust settles. Photos: Felix Steinreiber/Marco Campelli/Philip Platzer/Simon Cudby c/o KTM
