KTM is in troubled waters, the depth of which was only hinted at when parent company Pierer Mobility Group released alarming mid-year financial reporting over the summer, which was accompanied by seemingly appropriate plans for major restructuring, including significant production cuts and the appointment of a “co-CEO” with a finance background. 

The company’s more recent Q3 report showed an even deeper spiral for sales and revenue, numbers that when viewed through a longer three year lens, to include any pandemic-induced losses, shows deficiencies in the neighborhood of a shocking 2.5 billion euros. 

On the heels of the Q3 numbers, Pierer Mobility has now released an “ad hoc announcement,” appealing for a minimum €100 million “bridge financing” liquidity infusion it needs to cover KTM AG’s short term debts, showing the world how those troubled waters have now reached a boiling point.

“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,” the statement reads. It goes on to say negotiations for a “standstill agreement” with its creditors are ongoing while the company looks for financial assistance. 

Additional wording appears to point to Pierer’s longtime counterpart in India, Bajaj Auto, for potential rescue, which makes sense when you take into account that Bajaj, via an ever-evolving Pierer Bajaj AG coupling, has already given the Indian corporation an indirect majority vested interest in KTM. Yes, you read that correctly. While the Indian company currently owns a non-controlling 49.9% share of Pierer Bajaj AG, the entity of Pierer Bajaj AG owns 78.16% shares in Pierer Mobility AG, owner of KTM. This arrangement makes KTM’s survival just as important to Bajaj as it is to Pierer. 

Of further interest, the announcement reveals that within Pierer’s portfolio, which includes KTM, Husqvarna, GasGas and the majority stake of MV Agusta, the KTM brand alone is responsible for 95% percent of Pierer Mobility AG’s revenue. 

The physical manifestation of KTM’s troubles began with an adjustment in production intended to meet downgraded demand in Europe and North America, which entailed the loss of 300 Austrian jobs in the first half of 2024. Mid-year adjustments brought another 200 layoffs and now hundreds of additional jobs are on the chopping block, and that’s aside from the Mattighofen plant’s impending shift to a single-shift production line, which could impact remaining workers. 

Furthermore, in a recent interview with the Austrian publication OÖNachrichten, Pierer announced that the Mattighofen plant will entirely freeze production for the first two months of 2025 as KTM tries to scrape back its astounding losses. Thankfully, the thousand or more affected workers will retain a paycheck during the freeze after representatives successively negotiated a temporary 30-hour reduced workweek agreement.

How in the world did we get here? It was less than three years ago that KTM was celebrating 12 straight years of record growth with a 13-percent sales increase and 19-percent gain in its revenue stream. In 2023 KTM and Pierer opened a North American Headquarters, boasting that it cost $53 Million, this, on the heels of a pandemic that had killed other industries. 

It appears a set of compounding circumstances are at play here, beginning with the idea that Stefan Pierer had been anointed with a Midas Touch, turning everything he put forth into gold. And for a time, the magical momentum created by his choices could not be denied, creating what was perhaps a high level of overconfidence at the corporate level. 

So, it was “more, more, more” for so long, with financial results that backed up the breakneck growth, and then along came the global pandemic and a heightened demand for isolation-friendly leisure items, including motorcycles, and even Pierer couldn’t keep up with orders. And it remained all systems go, even as supply chain issues backed up production lines, a harbinger for quality issues to come.

And then suddenly, the winds of fortune changed, not only for KTM, but for all manufactures of leisure products. Post pandemic, consumers no longer had leisure time and booming inflation had purses snapping shut the world over. 

Pierer Group has already made official statements pointing to the pandemic as the reason for its current financial woes, and it’s true Pierer is not alone in having misread a pandemic boom as a new norm. Companies like Harley-Davidson and Polaris are also suffering frightening losses in 2024 as slumping sales and a glut of product have begun to drown dealers in high-interest loans on stagnant inventory. 

For KTM, however, it’s been more of a peeling onion situation, as its recent financial woes have been unfurled alongside a storm of consumer outrage regarding the company’s controversial handling of camshaft failures in its middleweight LC8C-powered adventure bikes. 

It could be a giant-killing coincidence, really, as a growing boycott by consumers is gathering strength just as the company grapples with an unprecedented glut of product now piling up like cordwood at dealerships across North America and Europe.

What’s going to happen next is anyone’s guess, though updates are likely to continue in rapid fire, eerily in step with news releases on new products, such as the 390 Adventure R, Enduro R and 390 SMC R, freshly unveiled at EICMA and a new Freeride E dual-sport, machines initiated long before the dark waters of financial peril had dampened KTM’s confidence. 

A company like Harley-Davidson is lucky the American government is quick to throw lifelines, while Stefan Pierer’s KTM looks to its own corporate family for a bailout. It will indeed be an interesting turn if India’s Bajaj Auto, which already produces the 390cc line for KTM, takes an even bigger stake in one of the world’s most famous adventure-bike brands.

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.