Slump in sales at KTM – restructuring at the motorcycle manufacturer – News

• The largest motorcycle manufacturer in Europe, KTM, is struggling with a slump in sales.
• The Austrian company is therefore undergoing restructuring proceedings.
• The problems are also the aftereffects of the corona pandemic.

The ailing motorcycle manufacturer KTM wants to undergo restructuring proceedings. The financial hole at the Austrian company amounts to around 250 million euros – and the management “does not assume that it will be possible to secure the necessary interim financing in a timely manner,” said the owner Pierer Mobility AG in Mattighofen near Salzburg.

KTM will apply for judicial restructuring proceedings under self-administration, it said. The company announced a reduction in production over the next two years in order to reduce inventory and “sustainably ensure” the survival of the KTM Group.

Production is suspended for two months

It was also emphasized that the Pierer Group was not over-indebted. Nevertheless: Because of the problems at KTM, the stock market price has fallen by more than 80 percent since the beginning of the year.

In response to the collapse in demand, the company announced in mid-November that production would be cut back. Around 300 jobs will be cut by the beginning of 2025. Production will be suspended from Christmas to the end of February. Previously, 700 jobs had already been cut this year. KTM currently employs around 5,000 people in Austria.

KTM is part of the Pierer Industrie group. He announced on Monday that he would initiate a European restructuring procedure in accordance with the restructuring regulations. According to this procedure, only certain creditors are affected; the remaining liabilities should be serviced as agreed.

A consequence of the corona pandemic

Pierer is an important industrial company for Austria. Sales in 2023 amounted to around 2.7 billion euros, around 330,000 KTM motorcycles and around 100,000 e-bikes of the same brand were sold worldwide. However, business is currently bad, especially with e-bikes. KTM has given away several thousand e-bikes to its employees in recent months because the market for them has collapsed.

The problems on the market for motorcycles and e-bikes have primarily to do with the corona pandemic: in 2020 and 2021, demand for both motorcycles and e-bikes rose massively, and production could no longer keep up with demand.

But the resulting increased production and the now full warehouses are now meeting with lower demand: people are increasingly flying on vacation again – and are buying a motorcycle or e-bike less often.