Since purchasing KTM in 1992, Stefan Pierer has steered his company through difficult times and achieved remarkable success. He was partly surprised by the events of 2024.
Under graduate engineer Stefan Pierer, who turned 68 on November 25, Pierer Mobility AG has grown into Europe’s largest motorcycle manufacturer over the past several decades. In 2023, around 382,000 motorcycles were sold under the KTM, Husqvarna, GASGAS, CFMOTO and MV Agusta brands. .
The Upper Austrian bought the bankrupt KTM motorcycle factory in 1992, and since then things have gone from strength to strength. The workforce grew from an initial 150 employees to over 6,000 in the best of times.
KTM survived the 2008 financial crisis with a black eye, also thanks to government support, and faced the 2020/2021 Corona crisis admirably. In 2022, the record year of 2018 was surpassed, and this was achieved again in 2023.
As of 31 December 2023, a total of 6,184 employees were employed in the Pierer Group, including around 5,000 in Austria. The 2023 fiscal year was dominated by a major model offensive with a total of 72 new and revised models from three major brands: 280,206 motorcycles from KTM, 67,462 from Husqvarna and 29,532 from GASGAS. With additional motorcycles from MV Agusta (1852) and CFMOTO (2503) sold, Pierer Mobility was able to reach a total sales of 381,555 motorcycles (2022: 375,492 units).
The 2024 sales volume forecast had to be revised down several times. On October 21, 2024, Pierer Mobility announced: “The difficult economic conditions are generally longer than expected. The European economy is slowing down, and the important German market in particular is slowing down. In the United States, the purchasing power of consumers remains low due to high cost of living and long term consumer credit. In Europe, registration data for the overall motorcycle market from January to September 2024 is at the level of the previous year due to an increase in the price share of down; However, they show weak power.
In 2024, several developments came together that had a negative impact on the Pierer Group and were perhaps not recognized early enough: high inflation in many countries was compounded by rising wages, production and credit costs in Austria – and sales also fell sharply.
The company was not sufficiently prepared for this and production was not reduced quickly enough after 2023. Tens of thousands of motorcycles have not been sold in stores and the payment terms of dealers had to be increased.
On November 26th we received bad news that shook the motorcycle industry and Austria as a region. KTM AG, which accounts for 95 percent of Pierer Mobility’s sales, said: “Management assumes that it will not be possible to obtain the necessary interim financing in a timely manner. Therefore, the Board of Directors of KTM AG has decided to submit a request for the initiation of judicial restructuring proceedings by itself on the assets of KTM AG and its subsidiaries KTM Components GmbH and KTM F&E GmbH on November 29, 2024.
Changing the scale of production should cause excess inventory at KTM and its dealers to be adjusted over the next two years. This will lead to job losses in Austrian regions totaling one billion euros in 2025 and 2026 – almost a quarter of the more than 6,000 workers temporarily lost or losing their jobs.
Due to the restructuring process, there is an additional possibility of losses, which is why the company expects an annual negative result of around one billion euros for the financial year 2024.
Stefan Pierer, CEO of KTM AG: “We have grown into the largest motorcycle manufacturer in Europe over the past three decades. We inspire millions of motorcyclists around the world with our products. The KTM brand is my life’s work and I fight for it. Major shareholders they stand with KTM together with Pierer Mobility and its stock market.The goal is clear: KTM should emerge stronger from this difficult time.
Since September 2024, Gottfried Neumeister has been a new member of the board as co-CEO. “He brought interesting experiences and fresh air and made a great contribution to the current situation,” praises Pierer. “I am confident that he will work with me to get the company back on the road to success.”
Media reports that Mark Mateschitz, who owns 49 percent of Red Bull, was joining as an investor were denied by Pierer Mobility on November 22.
