KTM has enjoyed steady growth in sales volume and market share over the last decade, but is there trouble in paradise? KTM's parent company (Pierer Mobility AG) has seen their stock slide over 60% in the last calendar year from €80 to below €30. The stock was crushed in December of last year, when the company issued guidance that EBIT would decline despite revised sales growth from 7% to 9%. To deal with sliding EBIT, the company announced that it would reduce it's European workforce and increase production in India and China, but this has done little to arrest the falling stock price, partly because their bicycle segment has been reporting grim numbers.
This matters for MotoGP for several reasons. First, revised guidance that tanked KTM's stock price last year, coincided with KTM's push to acquire additional grid slots, including a failed attempt to have one of KTM's subsidiaries (like GasGas) qualified as a separate manufacturer. At the time, we assumed KTM wanted equal standing with Ducati in the paddock, but it's also possible that this was an attempt to find new sources of Dorna commercial revenue to prevent that budget cut rumors that are currently circulating. Second, and perhaps most importantly, Pierer Mobility purchased a controlling interest in MV Agusta this March, and they made plans to bring the Italian brand back to MotoGP. The details of the MV Agusta takeover deal were not disclosed, but it's unlikely that Pierer Mobility handed over a bag of cash. Recently, rumors have been swirling in the Italian-blogosphere, that KTM are not actually able to complete the purchase, and they've pitched several hail-mary attempts to salvage the deal and complete the sale.
It's difficult to judge the exact situation. Pierer Mobility is under pressure. Their sales and financial forecasts have been getting progressively worse for the last year. Investors are not excited about the job shift from Europe to Asia, nor are they bullish about the MV Agusta takeover. KTM's MotoGP performance has also been particularly lackluster this year, which threatens their relationship with Red Bull. Maybe this explains why Pedro Acosta went to Austria to inquire about KTM's future plans?
On the other hand, KTM have barely begun to fortify their racing operations from the manufacturing business. While Acosta was in Austria, he tested with WP. This was presumably to improve their suspension and increase global sales in racing paddocks. KTM will also release their new 990 Supersport bike. If the competition model is sold directly from the factory, and it's halfway decent, it could attract significant funds from customer race teams. And who knows? Maybe Dorna will pay factory money for an MV race team, if they have a bespoke chassis and aero kit.
Regarding the purchase of MV, it could just be Italian misinformation. Ducati is German. MV Agusta is Austrian. I'm sure there are wealthy Italians with an interest in blowing-up the MV deal, but Pierer has given them a wealth of "explosive" bad news so maybe the Italians do need to make anything up.
I don't think KTM are on the brink right now, but they are on the brink of being on the brink, if you know what I mean. A few more papercuts could finish the job.
This matters for MotoGP for several reasons. First, revised guidance that tanked KTM's stock price last year, coincided with KTM's push to acquire additional grid slots, including a failed attempt to have one of KTM's subsidiaries (like GasGas) qualified as a separate manufacturer. At the time, we assumed KTM wanted equal standing with Ducati in the paddock, but it's also possible that this was an attempt to find new sources of Dorna commercial revenue to prevent that budget cut rumors that are currently circulating. Second, and perhaps most importantly, Pierer Mobility purchased a controlling interest in MV Agusta this March, and they made plans to bring the Italian brand back to MotoGP. The details of the MV Agusta takeover deal were not disclosed, but it's unlikely that Pierer Mobility handed over a bag of cash. Recently, rumors have been swirling in the Italian-blogosphere, that KTM are not actually able to complete the purchase, and they've pitched several hail-mary attempts to salvage the deal and complete the sale.
It's difficult to judge the exact situation. Pierer Mobility is under pressure. Their sales and financial forecasts have been getting progressively worse for the last year. Investors are not excited about the job shift from Europe to Asia, nor are they bullish about the MV Agusta takeover. KTM's MotoGP performance has also been particularly lackluster this year, which threatens their relationship with Red Bull. Maybe this explains why Pedro Acosta went to Austria to inquire about KTM's future plans?
On the other hand, KTM have barely begun to fortify their racing operations from the manufacturing business. While Acosta was in Austria, he tested with WP. This was presumably to improve their suspension and increase global sales in racing paddocks. KTM will also release their new 990 Supersport bike. If the competition model is sold directly from the factory, and it's halfway decent, it could attract significant funds from customer race teams. And who knows? Maybe Dorna will pay factory money for an MV race team, if they have a bespoke chassis and aero kit.
Regarding the purchase of MV, it could just be Italian misinformation. Ducati is German. MV Agusta is Austrian. I'm sure there are wealthy Italians with an interest in blowing-up the MV deal, but Pierer has given them a wealth of "explosive" bad news so maybe the Italians do need to make anything up.
I don't think KTM are on the brink right now, but they are on the brink of being on the brink, if you know what I mean. A few more papercuts could finish the job.
