Could MV Agusta and MotoGP teams be on the chopping block? AMCN explores the causes and effects of a meltdown that has shaken the world

Europe’s largest motorcycle manufacturer has gone into self-administration and is working through a 90-day period to restore its financial stability. After a torrid period that’s seen its parent group – Pierer Mobility – lose 90 percent of its share value since its peak in 2023, KTM AG has entered ‘self-administration’ in an effort to stave off bankruptcy.

It has debts totalling a whopping 3 billion euro ($A5b). Self-administration, under Austria’s insolvency laws, gives companies a 90-day window of protection from creditors. KTM’s self-administration application was submitted on 29 November. The resulting restructure is expected to include a substantial reduction in the company’s manufacturing output, despite KTM making a significant number of lay-offs earlier this year.

The Austrian legal situation doesn’t involve overseas distributors, but new model releases will be delayed.

The problems stem from a sudden drop-off in demand, thanks in part to high interest rates in many of KTM’s key markets, after several years of growing sales and increased production. That’s left an oversupply of unsold bikes and too much manufacturing capacity.

KTM is the central pillar of the Pierer Mobility group of companies, which also includes Husqvarna, GasGas, WP and a controlling stake in MV Agusta. The recent completion of 51 percent of MV Agusta put a strain on the company’s cash reserves.

Stefan Pierer, KTM’s CEO, said: “The KTM brand is my life’s work and I will fight for it.”

In September, the company appointed a co-CEO, Gottfried Neumeister, to help Pierer.

Neumeister said: “The enthusiasm of our employees is our most important competitive advantage.”

Pierer isn’t afraid to take drastic steps. Back in 2023 Pierer Mobility cut 300 jobs at its plants in Austria to transfer production to its partnership companies in India, with Bajaj, and in China, with CFMoto. The relocation also included some R&D activities.

The world on their shoulders… Gottfried Neumeister and Stefan Pierer have just a few weeks to save KTM

If KTM can’t refinance itself, there is speculation that Bajaj could step in. This conglomerate has deep pockets, with a net worth of over $A30 billion, and undertakes much of KTM’s small-model production.

Rumours are abounding about KTM’s MotoGP plans. Tech3 has said it has an assurance the current MotoGP program is safe but the company has already pulled back its involvement in off-road racing with subbrands GasGas and Husqvarna to concentrate on a more stripped-down KTM-branded effort in the Dakar.

The KTM situation is dire but it almost pales into insignificance when compared to Volkswagen, which owns Ducati via its subsidiaries Audi and Lamborghini. Now 200 billion euro ($A325b) in the red, it has become the world’s most indebted listed company. There are plans to close three factories in Germany and sack tens of thousands of workers. These are dire times for Germany both economically and politically, while other Euro nations, like Spain, have strong economic growth.

Recent reports also suggest that MV Agusta could be on the chopping block. In March 2024, Pierer Mobility increased its stake in MV Agusta to 50.1%, but it seems they are now considering divesting from the Italian marque to reduce costs and focus more on core brands.

In response to the rumours, MV Agusta issued a statement reiterating its independence and ongoing viability, saying:

“With 4,000 motorcycles sold in 2024, an annual growth of 116 per cent, by July we had already reached the same sales volume as all of 2023. The test ride requests received in October 2024 alone equalled the total number of requests received in the entire previous year.”

“The people who made these results possible will remain in Varese, and nothing will change regarding business operations, as the ownership has never interfered with them.”

“The current situation of the shareholding structure is still being defined, with shareholders working together to determine the future corporate structure, aiming to ensure that MV Agusta continues to grow and reach the heights it deserves.”