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Just weeks after announcing weak results and withdrawing its financial guidance for the rest of the year, Pierer Mobility is cutting back production, laying off more workers, and seeking additional financing.
Pierer Mobility is the parent company of KTM, GASGAS, and Husqvarna, and earlier this year took full control of MV Agusta, as well. The company has issued a statement saying that it is seeking "bridge financing in the three-digit million range," so more than €100 million. The company is in discussions with current creditors to seek concessions while it tries to arrange additional financing.
In addition to previously announced layoffs, the company says more cuts are coming and it will build fewer motorcycles "with the aim of reducing inventories at both KTM AG and the dealer level to an economically sustainable level by significantly reducing production volume."
"The aim is to stabilize costs and sales at a redimensioned level from the 2025 financial year and thus create the basis for sustainable competitiveness and profitability," the statement said.
KTM has been following a growth strategy in recent years but that left the company overextended when sales slowed in key markets in Europe and the United States. It faced backlash from consumers who were unhappy with the way it handled problems with camshaft wear in some models and the parent company lost even more money on unsuccessful bicycle ventures.
Since even Pierer's executives aren't confident about how this is going to play out, it would be pointless for me to speculate. Some are predicting a sale, others a retrenchment. To find any lasting solution, the company has to solve its immediate liquidity problems first.
