Pierer AG, the parent company behind KTM, Husqvarna, MV Agusta and GasGas, is planning a series of internal changes after the first half of 2024’s financial results painted a grim picture. The changes include downsizing production, shipping some work overseas, and laying off hundreds of workers.
Pierer AG has been very up-front about money issues over the past year or so. In late 2023, Pierer announced plans to tighten its belt so its sub-companies (including parts manufacturers like WP along with the four big manufacturers mentioned above) could survive into the future. With interest rates rising and consumer spending on shakier foundations as a result, Pierer’s bigwigs moved some production and other work overseas (now, 790-series bikes are made in China) and appear to be cutting the race budget as well (the rally raid team is gutted, compared to its strength pre-2023).
Well, expect more of the same in months to come. In their report on the Q1/Q2 results, Pierer said profits were nuked, debt increased, and their revenue went down about 27 percent. Yikes! But at least they had prepared, and told their investors this was coming—and now they’re planning to do more.
For starters: Layoffs are coming again. The Pierer AG press release says they plan to let go 200 workers who aren’t directly involved with production—presumably these will be people from the European HQ. The PR also says that they will ship more production overseas, so expect more made-in-China or made-in-India machines. And, more R&D for new models will come as cooperative efforts with Pierer’s overseas; they will be building bikes overseas with advice from the people building them.
Interesting. And it’s also interesting to see that Pierer says the MV Agusta acquisition deal is still going as planned, and they plan to continue to develop their premium brands. Don’t expect a bunch of el-cheapo bikes from India and China; KTM et. al. still plan to sell pricey flagship machines with high-end features. But maybe there will be fewer of them, because one other method that Pierer says it will use to ease the financial woes is a reduction in production. Scaling back the number of bikes being built means less financial pressure on dealers and probably KTM/Husqvarna/GasGas/MV Agusta themselves, and that appears to be maybe the most important thing of all right now.
Making more bikes in China is going to make sure that I don’t buy any more of their bikes.
Much like General Motors in the bad old days – KTM/Husqvarna/GasGas (and sometimes even CFMoto) – the differences from one make to the other are often subtle. Maybe if Pierer made a more valiant attempt at differentiating the products other than Bold New Graphics and tank badges they would help themselves and the average consumer understand better ?