Due to overproduction and sluggish sales, KTM has accumulated an inventory of 130,000 machines, some of which were still manufactured according to the Euro5 emission standard – but Euro5+ will be used from 2025. What now?
The discount war has started for a long time, KTM and its dealers are facing a lot of price pressure. KTM has been offering a lot of discounts since September this year, in Germany reaching a VAT of 19 percent. Recently with a court application for revision on November 29, 2024, the price structure began to deteriorate.
It’s not just bargain hunters who take advantage of this by asking dealers for generous discounts up to breakdowns on new machines. KTM dealers also put the factory under pressure by offering the manufacturer to take delivery of stock machines – at a special price. These discounts are passed on to bargain hunters, eroding customer prices.
An additional problem arises in the form of brand new stock machines, most of which are dated 2023 or older, which are still assembled according to the Euro5 emission standard. These can no longer be allowed in the EU from January 1, 2025 – theoretically. In practice, the manufacturer can request an exemption for the so-called “expiring series”, which means that they can be approved for road traffic until the end of 2026. Each country regulates this exception independently. Offered at a rate of 10 percent of the expected sales volume of the corresponding model. MV Agusta took advantage of this exception when it introduced Euro5 in 2021.
If, for some examples, more than this 10 percent of the annual demand has not yet been changed according to Euro5+, it is only known as daily registration. A dealer or factory must register a new motorcycle in one day under Euro5 this year. This results in a cost of approximately €150 per motorcycle and causes a decrease in the value of the bike because it is then a used motorcycle that can be registered for road use again after January 1, 2025.
The legal situation is different in Switzerland, where the import date applies: All motorcycles imported into Switzerland by 31 December 2024 can be registered for Euro5 road traffic at any time, even years later.
In retrospect, it makes more sense: Although KTM and its sister brands Husqvarna, GASGAS and MV Agusta were able to report a record 381,000 motorcycles sold in 2023, more motorcycles were produced last year. There is no other stock information for the 2023 models.
While the decline came in the first quarter of 2024, especially in the USA and Asia, production was already at another sales record in 2024. Now not only is the factory sitting on inventory that causes costs, dealers also have unsold motorcycles. These are not in the commission there. On consignment means: The factory puts the motorcycle in the dealer’s showroom and he has to pay for it when it is sold. KTM does not, but presents motorcycles with payment terms. These deadlines have now been partially extended. However, you don’t have to be a prophet to predict that dealers will also get into financial trouble because they are forced to pay the factory for motorcycles that they find difficult to sell (or at a discount) due to the saturation of the market and the economic downturn for many. the country.
