KTM enter 'self-administration' as 2024 financial year expected to end in 'three-digit million' loss

CEO of KTM, Stefan Pierer has announced the Austrian brand will undertake a 90-day ‘self-administration’ process in a bid to restructure the company and move toward the end of their current financial difficulties.

Speaking in a statement alongside newly appointed Co-CEO Gottfried Neumeister, Pierer said: “Over the past three decades, we have grown to become Europe’s largest motorcycle manufacturer.

“We inspire millions of motorcycle riders around the world with our products. Now we are taking a pit stop for the future. The KTM brand is my life’s work, and I will fight for it.”

KTM’s reputation took a hit in the summer months of this year when accusations of excessive camshaft wear began to emerge surrounding their LC8c twin-cylinder engine platform. Following media and owner pressures, this later resulted in a goodwill scheme for repairs, whether still in warranty or not.

Secondly to this, like other manufacturers, the Ready to Race brand is experiencing issues with excessive stock in the marketplace – with sales struggling in locations including the UK, brought on by issues including the cost of living, a General Election, rising insurance prices, the perceived threat of motorcycle theft, and more.  

The application for the self-administration will be submitted on November 29 and will effectively allow KTM 90 days to manage their assets under supervision and potentially agree a new reorganisation plan with their creditors.

The announcement is the latest in a long line of drastic changes, with parent company Pierer Mobility already cutting their executive board from six to two members this year. Hundreds of job losses have also already occurred, with increased manufacturing migration to India and China, as well as a 25% drop in planned production announced back in early September.

“The enthusiasm of our employees is our most important competitive advantage,” Gottfried Neumeister added. “Their passion is the reason why KTM is globally synonymous with peak performance.

“We build our motorcycles reliably and robustly for every race, for every terrain. Now it’s about making the company robust. Robust for the future. So that we can quickly focus again on what we do best: building the coolest motorcycles in the world.”

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Despite Neumeister’s positive tone, a separate statement released by Pierer Mobility on the same day stated that the company expects KTM to end the 2024 financial year with a negative net financial outlook said to be in the ‘very high’ hundreds of millions.

Further to this, to help turn the tide on excess stock on the market, KTM are also aiming to cut over €1 billion worth of operating performance at their Austrian plants in 2025 and 2026 – a move likely to result in further job cuts.

Since 1992, KTM has grown from 160 employees and a production volume of 6000 bikes, to over 5000 employees and the capability of producing 1000 motorcycles per day.