News & Events

27
December
2023
KTM Owner Moves Production to China

KTM Owner Moves Production to China

Pierer Mobility Group is cutting costs..

By Bruno dePrato Source CycleWorld

Pierer Mobility Group, owner of KTM, Husqvarna, and GasGas, has decided to cut 300 jobs from its Austrian assembly lines and move additional production and some R&D jobs to China.KTM

After acquiring the original Austrian KTM brand, the Pierer Mobility Group has grown to be the No. 1 European powered two-wheel manufacturer with 190,293 bikes sold in the first half of 2023, with a sales volume increase of 16.5 percent over the same period of 2022. Pierer Mobility Group is determined to further increment its position and its sales volume for 2024, and consequently the top management decided to sell the R Raymon and Felt bicycle makes, while promoting the Husqvarna and GasGas e-bicycle production.

This decision was taken to further focus the activity on the four motorcycle brands that constitute the Group: KTM, GasGas, Husqvarna, and MV Agusta. In addition, Pierer Mobility Group will cut 300 jobs at its production plants in Austria and will transfer production to its partnerships in India, with Bajaj, and in China, with CFMoto. The relocation will also include some R&D activities.

This move is based on a sharp analysis of the economic and financial situation in Europe, with 2024 looking at a contraction over 2023, especially since the European Central Bank confirmed it will keep the interest rates at the present level. This situation already forced the Group to trim the dealer network to make it more efficient.

Thanks to its solid liquidity condition, the Group assisted a number of dealers in reducing the burden of high banking rates while also assisting some suppliers that were facing financial problems. This was possible thanks to the solid liquidity condition of the Group. Thus the board of directors took the decision of strengthening the core business, making 2024 a year of consolidation.

On the other hand, the decision of relocating part of the production activity in Austria appeared logical given the fact that the cooperation with CFMoto appears very positive to the point that production of the mid-displacement models 790 Duke and 790 Adventure has already been relocated in China. This not only takes advantage of the lower production costs, but also strengthens the KTM image on the Far East markets that are still growing faster than any other.

Pierer Mobility Group plans to cut costs for 2024 significantly.KTM

Pierer Mobility Group and CFMoto have planned to increase the joint production activity from 50,000 to 100,000 units. The board of directors is fairly optimistic that next year’s sales should remain at 2023 levels, with EBIT margin in the region of 5 to 7 percent. In order to secure the Group’s profitability, the management will implement cost-cutting measures in the double-digit million range in the 2024 financial year.

As for MV Agusta, Pierer Mobility reassured the manpower in Schiranna that the Group is very confident in one of the most legendary makes in the history of motorcycling. The new MV Agusta LXP Orioli adventure model powered by the new 900cc three-cylinder engine promises to be a big success on the market as much as it was at EICMA last month. To further support the projection of MV Agusta on the worldwide market, its models are going to be distributed through the Pierer Mobility Group dealer network.

MV Agusta’s LXP Orioli has potential for success.MV Agusta

Finally, the call option granted to KTM AG on the basis of the annual financial statements as of December 31, 2025, to acquire a majority stake in MV Agusta will be exercised in spring 2026, and that will be a big turning point for the Italian legend that will finally exit the years of financial uncertainty.

By Bruno dePrato Source CycleWorld