There been a bit of news going around recently about the state of Pierer Mobility AG, the company that owns KTM, Husqvarna, GasGas, WP Suspension, and who recently took a controlling interest in MV Augusta.
In March this year KTM declined to renew Toby Prices contract for the 2025 Dakar, this in itself was interesting as Toby has been KTM’s #1 rider since 2016 but has been showing more interest in 4 wheels for future events. However KTM also didn’t field a single factory entry under any of the KTM, Husqvarna, or GasGas brands in the 2024 World Rally Raid Championship series this year.
Pierer Mobility AG has revised it’s earnings and profits down twice so far in 2024 after announcing earnings were down around 15%.
A statement from Pierer Mobility said “The second half of the year at PIERER Mobility is generally characterized by a high-margin product mix, especially in the offroad segment,” starts the brand’s release, adding, “However, the available registration data for the overall motorcycle market in the USA for the period from January to September 2024 shows a decline of 6.3%. September was also the weakest month since January 2024, with a decline of 14.6%, meaning that a rapid recovery cannot be expected.”
Pierer Mobility AG laid off 373 employees in the first half of 2024 and in September announced another 200 redundancies to take affect this year, and in an almost unheard of move for a large corporation the Pierer Mobility AG Board of Directors will be reduced from 6 to just 2.
Pierer Mobility have indicated they intend to reduce production by up to 25% and shift more production to India and Chinaa where manufacturing is cheaper in an effect to cut costs.
With all of this on top of the KTM cheese camshafts issue some owners of KTM parallel twin 790/890 models are experiencing it’s not been a good year for Pierer Mobility.
UPDATE: 12/11/2024
A couple of weeks after Pierer AG released their latest financial results above they released an ad’hoc statement that hinted pretty strongly that things at Pierer AG are REALLY Bad and they need to borrow or otherwise secure hundreds of millions to keep things going and satisfy debt pauyments. Reading between the lines this could mean the sale of a controlling interest, or one or more of the brands under the Pierer AG umbrella to core shareholder Pierer Bajaj AG, essentially Indian company Bajaj, or another buyer.
‘A standstill agreement, for use in the context of a restructuring, whereby secured creditors agree not to enforce their security or demand payment of their debts for a period of time with the aim of enabling a consensual restructuring to be negotiated’, essentially a standstill agreement is a deal with creditors to not force payback of debts or otherwise try to wind the company up while s restructuring or refinancing deal is made.
Pierer AG’s statement said:
The Executive Board is currently working on securing the financing of KTM AG, in particular on bridge financing in the three-digit million range.
To this end, discussions are ongoing both with the core shareholder Pierer Bajaj AG and with existing financial creditors. The aim is to agree a standstill agreement with the financial creditors involved for the duration of these discussions as basis for the financial restructuring.”
