KTM AG’s potentially catastrophic financial issues continue to unfold with parent company Pierer Mobility releasing a new statement, this one announcing that Europe’s largest motorcycle manufacturer will be filing for “legal restructuring proceedings with self administration” on November 29th. 

In this phase of what’s become a ride-or-die rodeo for CEO Stefan Pierer, who issued a statement alongside his new co-CEO, financial expert Gottfried Neumeister, announcing that KTM AG will be “self-administering” a debt restructuring plan. This phase of a potential insolvency for KTM AG gives the company 90 days to negotiate with creditors for new debt financing terms ahead of more drastic court-involved insolvency proceedings.

And Pierer has debt aplenty. As of June 30, its net debt had risen by 89% to €1.4 billion, with another €136 million in debt set to mature in 2025.

In other bad news brought to light midway through 2024, Pierer reported its motorcycle sales had dropped by 27% compared to the first half of 2023. The overall loss reported was a stunning €172 million, whereas reports at mid-year of 2023 showed a €53 million profit. 

Post covid supply shortages and inflation were initially blamed for the poor performance and also for quality control issues, though we now know that a mid-year futures downgrade was just the tip of the iceberg. 

During the 90-day grace period, Pierer Mobility AG’s creditors will have their interests protected by a court-appointed supervisor and workers will continue to receive insolvency pay, basically wages guaranteed by the insolvent company’s assets. During this time Pierer will retain control over the company’s assets.

Just ten days ago we reported KTM was seeking a “bridge financing” liquidity infusion in the nine-figure range to stave off potential insolvency, and the infusion seemed most likely to come from Pierer’s longtime partner Bajaj Auto of India, co-builder of KTM’s 390 range. But it looks like Bajaj, which is already deeply invested in Pierer holdings, hasn’t come to KTM AG’s aid with a new injection of cash or else we’d be hearing a different message from Austria. 

There was also speculation that another Austrian giant, Red Bull, which has long partnered with KTM in its motorsports endeavors might step in with a cash infusion, but Pierer released a previous statement saying that was not in the cards. 

For his part, Stefan Pierer is holding firm to lofty visions for KTM and the other brands he’s acquired, which include Husqvarna, GasGas and MV Agusta.  “Over the past three decades, we have grown to become Europe’s largest motorcycle manufacturer,” said Pierer in the official statement. “We inspire millions of motorcycle riders around the world with our products. Now we are taking a pit stop for the future.”

For the affected workforce, Pierer’s scramble to scrape back lost revenue, an overhaul that began with 373 job cuts in the first half of 2024, followed by another 200 layoffs in September with hundreds more in the balance, most certainly does not feel like a “pit stop.” On top of the layoffs, Pierer announced a production freeze for the first two months of 2025, though remaining workers will receive pre-negotiated partial wages during those months. 

Pierer’s co-CEO Gottfried Neumeister seems to understand employee morale is paramount at this stage: “The enthusiasm of our employees is our most important competitive advantage,” Neumeister said in the statement. “Their passion is the reason why KTM is globally synonymous with peak performance.” 

Neumeister goes on to say this moment is about making the company “robust” again in order for KTM AG, which is responsible for 95% of Pierer Mobility AG revenue, to be able to return its focus to “what we do best: building the coolest motorcycles in the world.” 

Meanwhile KTM North America chimed in with a follow-up statement for the North American press reminding that the legal restructuring procedure pertains only to KTM AG and that “North America and all other KTM subsidiaries are not included.” This, of course, does not mean they won’t be greatly affected by what transpires across the pond. 

It’s difficult to believe that KTM, which the press release reminds us has grown from 160 employees and a production volume of 6,000 units in 1992 to a capacity of up to 1,000 motorcycles per day, has slid so quickly to the brink of insolvency after more than a decade of industry-leading growth. 

Having 90 days to complete the self-administering procedure of finalizing a debt restructure plan on its own means by the end of February 2025, KTM will either go into bankruptcy and lose control of its assets, or we’ll see a much more cautious Pierer Mobility AG taking baby steps back from the brink. 

If you didn’t know what was going on beneath the surface you’d think KTM was making more smart moves, including expanding its popular 390 line to include a 390 Adventure R, Enduro R and 390 SMC R. There’s new radar technology on the way that will automatically have your top-end KTM brake and steer away from an impending crash, as well as a new semi-automatic transmission and an expanded TFT display. 

The company is also making a move to repair its reputation for reliability by including a 24-month warranty for all its high performance “R” model bikes, including the 1290 Adventure R and 890 Adventure R. In the past only non-R street models were offered with a 24-month backing, a slight that irked some consumers.

The recent camshaft controversy, which has caused some to turn away from the Pierer brands, potentially affecting long-term consumer confidence, isn’t doing any favors for the flailing giant, though at the moment, KTM has far bigger problems on its plate. 

“The KTM brand is my life’s work, and I will fight for it,” said Stefan Pierer in the face of the brand’s current situation, while Gottfried Neumeister cited KTM’s 510 world championship wins as proof of strength, saying KTM would be back, stronger than ever. 

Author: Jamie Elvidge

Jamie has been a motorcycle journalist for more than 30 years, testing the entire range of bikes for the major print magazines and specializing in adventure-travel related stories. To date she’s written and supplied photography for articles describing what it’s like to ride in all 50 states and 43 foreign countries, receiving two Lowell Thomas Society of American Travel Writer’s Awards along the way. Her most-challenging adventure yet has been riding in the 2018 GS Trophy in Mongolia as Team AusAmerica’s embedded journalist.