Where Does KTM Go?

So, what happens now?

The future of KTM AG will be decided over the next three months. Already, the company is reducing headcount and announced plans to pause production in January and February, but there’s no way to know whether these, and any other measures, will be enough to keep the company afloat.

Other than that, it’s been business as usual, with KTM announcing several new and updated models over the last few months, plus the adoption of new technologies such as  automatic manual transmissions

 radar-backed safety aids and tablet-sized infotainment screens (having 21% of your workforce working in R&D will do that). Whether these innovations will pay off will play a role in KTM’s fate.

 

ktm ag enters self administration to restructure debt

Things can turn around quickly if KTM manages to find a new investor. As of Oct. 11, Pierer Mobility ownership consisted of 25.0% in free flat shares and 74.9% controlled by Pierer Bajaj, which in turn is owned by Pierer Industrie (50.1%) and Bajaj (49.9%). Bajaj is an obvious candidate to step in with a larger investment, but if that was easily achievable, it probably would have happened already.

 

Photo by Rob Gray (Polarity Photos).

Red Bull has been a longtime partner in KTM’s motorsports programs, leading to speculation last week that the energy drink company’s owner, Mark Mateschitz may step in. Pierer Mobility was quick to shut that rumor down, releasing a statement on Friday denying any discussions with Mateschitz about acquiring a stake.

Of course, that leads us to the question of whether KTM’s racing efforts will go under the knife. GasGas is already ending its MXGP and MX2 and MotoGP factory programs, while both GasGas and Husqvarna are pulling out of rally racing. The KTM brand itself will continue in MotoGP and rally racing, Red Bull continue to provide sponsorship support, without any indication it intends to do more.

Barring a savior suddenly entering the picture, we’ll have to wait and see what Pierer and Neumeister can do to avoid bankruptcy.