Pierer cut back | KTM parent company forced to axe jobs and move production abroad to stay afloat

Pierer Mobility, the parent company of KTM, Husqvarna, GasGas, WP Suspension, and 50.1% of MV Agusta have released a statement describing a shortfall in overall sales for 2024, with the poor performance expected to continue throughout the year. 

• Related: KTM respond to allegations of expensive engine defects on their LC8c models

Following three years of “above-average success”, the company announced its motorcycle sales figures, both in the European and U.S. markets, have “slowed significantly”, with total sales volumes for the year expected to fall 10 – 15% below previous levels in the motorcycle and bicycle divisions.  

In light of the news, Pierer has announced job cuts to its workforce, stating: “With the growth in sales figures over the last ten years, the number of employees at the motorbike subsidiary KTM AG has more than doubled.

“In view of the changed location and market situation, the number of employees has now had to be adjusted. This reduction in personnel after years of rising employment is painful, but necessary in order to maintain and secure the competitiveness of the production site.”

Blame has been placed on both high interest rates in the U.S and market volatility within Europe – including rapidly increasing production costs. 

Dealerships too appear to be facing difficulty shifting new units, tying up large amounts of capital in overly stocked showrooms. As a result, Pierer says it will support its distribution network through extended payment terms and larger discounts – which will further affect total profit. 

In addition to the reduction in European workforce, the brand outlined plans to further migrate production away from Austria. 

Pierer already maintains an established partnership with Chinese brand CFMoto and Indian company Bajaj, and the news suggests more of the brand’s motorcycles will be built in China, India or other low-cost environments. 

The statement continues: “Due to the increasingly fragile supplier industry in Europe, the PIERER Mobility Group is utilising the favourable economic conditions in these regions (India and China) to secure its competitiveness. An efficient and high-quality supplier industry is being established there.” 

Whilst the news appears bad for the brand’s motorcycling division, its board has forecast that the above mentioned cost saving measures will compensate to such an extent that a balanced or even profitable year may still be salvaged.