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Recapping KTM's Sad 2024 Saga

Recapping KTM's Sad 2024 Saga

December 13, 2024

CHICKEN SOUP FOR THE KTM SIMP 🍊 🔪 🏍️

KTM HAS HAD A HELL OF A YEAR

HERE ARE THE MAJOR

STORIES FROM 2024

In early 2024, the Pierer Mobility group (PM), KTM’s parent company, announced it was taking over majority control of MV Agusta. This was almost two years earlier than the projected timeline. The company confirmed MV Agusta would retain its own engineering and design, and not cross-platform engines from KTM models.
In April, KTM suspiciously announced they would be extending the warranties on all KTM and Husqvarna models to 24 months, free of charge. The catch, all service must be done at the dealership. It is almost as if they were trying to get ahead of something… Maybe catch some failing cams before the owner caught wind? More on that later.
By May, KTM had announced it would be selling a full-sized street legal sport bike for the first time since the RC8 was discontinued in 2010. This was exciting news. The new 990 RC R stands to be a worthy contender alongside the YZF-R9 and the new Ducati Panigale V2 in the next generation of super sport motorcycles. If team orange is still in business by the time its set to release, that is.
The rumor mill started churning in Summer 2024, when the rapid growth Pierer Mobility experienced immediately following the COVID pandemic started to collapse. Alongside the earliest news of “slowing sales”, PM announced it would be moving more production to China and India to “utilize the favorable economic conditions in these regions to secure it's competitiveness”. WOO! CHEAP LABOR! Global manufacturing is complicated, and I’m no expert. But often, when we see a company manufacture certain bikes in India, it often means they will be sold for a cheaper price. KTM’s business model is based on high-profit margin sales, so I don’t think cheaper models were ever in the cards.
Finally, after years of questionable build quality, especially in relation to the cams in their 790/890 models, KTM issued a statement in July directed to the ~10k members of the KTM Cam Failure Facebook group. The initial release was something along the lines of “idk wut ur talking about. We fixed that like 3 yrs ago lawlz”. They have since back-pedaled a bit, and have offered more Good Will Warranty work for cam failure sufferers who are now outside of their factory warranty.
It started to seem like the cam scandal was just the tip of the iceberg, though. As a few months later, Pierer Mobility revoked its 2024 revenue, working capital, and net debt projections for the year. They laid off about 300 people and claimed to prioritize “de-stocking” dealer inventory. This led to corporate restructuring and a search for a “significant cash infusion”. KTM is already in partnership with Indian manufacturer Bajaj, and it is speculated they made take on more ownership of KTM to alleviate cash flow problems. The short of it is KTM, and PM as a whole, are in dire straights.
🎤 🎶 it’s the most wonderful time of the yearrrrrrrr 🎸 🎼 Nothing says “Happy Holidays” like thinking you might not have a job in a few months. After already laying off 300 people, PM announced they will be halting production in January and February of 2025. Just a few weeks ago, KTM has entered “self-administration” in attempt to restructure the business in the coming months to avoid insolvency. Essentially KTM (including GasGas, Husqvarna, MV) is unable to pay their debts. And there is a lot of debt.
The strange part is that KTM, specifically their cam issues, expensive tech packages, and diminishing consumer trust, has been kind of a red herring when it comes to Pierer Mobility’s seemingly insurmountable economic problems. PM as a whole owes nearly 3 Billion Euros, and a third of that debt comes from brands other than KTM, while KTM is responsible for 95% of the company’s profits. A significant bulk of the company’s financial burden comes from the brands they bought in recent years like GasGas, Husqvarna, MV Agusta, and a bunch of cycling companies. Who would have thought that once those COVID Stimmy Checks dried up, people wouldn’t be so eager to drop a bag on an expensive Austrian bicycle?
Amidst these financial woes, many have been curious how it will effect KTM’s racing efforts. We’ve come to find out that KTM plans to temporarily pause its MotoGP development program from the 2025 season. The length of this pause has yet to be determined, but when it comes to Gran Prix racing, if you’re not continually adapting, you will fall behind very fast.