Is KTM on the Brink of Withdrawal from MotoGP?

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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.
 
I thought Red Bull basically bankrolled their MotoGP Program?

I think that claim is accurate, but how tight is the relationship is this chaotic environment?

Is Red Bull bankrolling KTM by transferring assets from the F1 team to the MotoGP operation in the form of CFD payments that skirt the F1 rules? Is Liberty going to screw that up? How long will Red Bull tolerate mediocre performance, knowing that the Austrian factory cannot increase their investment? Is Red Bull exposed at all, if they pull the plug on KTM, and the company violates its contract with MotoGP/Liberty?

Red Bull own their F1 team and the facilities and IP to manufacture F1 cars and power units. Are they just circling, waiting for a vulture capitalist feast? There are too many moving parts to take a guess, but KTM's position doesn't seem terribly strong.
 
I have loosely followed the drama with KTM the last couple years, and a very good friend of mine is a KTM dealer. They have been doing a major company restructure the last couple years following covid, like many other companies they got caught with supply shortages, a lot of their investment went into addressing this issue. They moved some of their manufacturing to Asia, changed part suppliers and logistical partners, and built a brand new facility in Temecula Ca.

Was all that investment really needed? The motorcycle sales boom that the industry experienced post covid is over, and the entire industry has seen a substancial slowdown in sales. I am sure this has investors spooked, im sure in the long run it will be better, it might be a while before investors see a return.

As for MotoGP and their racing ventures, they have Red Bull backing them, as well as a lot of their own capital invested long term. I do wonder how much sucess in MotoGP translates to bike sales, you could make an arguement that wins in MotoGP do not necessarily translate to sales.
 
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I wonder if they regret this. Many big businesses are leaving CA.
Most of the manufactures are based near there as well, and I dont know of another part of the country where they could have a facility like that. Honda and Suzuki have their specialty shops right across the street, Yamaha has a facility near by, WP is there as well, and many aftermarket suppliers in the vicinity. There are also test tracks all around, because the weather is good year round. I go out there every winter to meet with suppliers and dealers, and it is very neat to see all these entities in the same place.
 
KTM lost a lot of RC390 sales a couple of years ago here where I live because the delivery dates were late by a mile, I had one on order but cancelled when it became obvious what was happening. They still have discounted new 2022 and 2023 models for sale currently in my area, with many 2024 models still for sale in showrooms.

With the advent of new bikes like the Ninja 500 I'd say KTM needs to step up their game.
 
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Trukenpolz: KTM's MotoGP Project Not in Jeopardy

Trukenpolz: KTM Will Have a Stronger Presence in Motorsport

We'll see. I hope the executives are telling the truth about KTM's difficulties, and the restructuring plans will actually work. The numbers don't look good at this particular moment, but Red Bull might be KTM's knight in shining armor......in MotoGP anyway.

Well KTM whacked 6 executives and kept 2. Not a good sign in my opinion. Their share price is tanking.

We all know once financial difficulties arise, the racing programs are the first to get axed.

I could see Red Bull stepping in and taking over. Well at least I could have seen this when Dietrich Mateschitz was still alive. Not so sure with his son as I don't really know much about him, and whether he shares the same passion for motorsports the way his father did. Then you have the Thai side of Red Bull, and who knows what their thinking is since decisions have to be made with both parties in agreement. Which was what saved Christian Horner from getting sacked; the Thai's wanted him around in that power struggle between he and One-Eyed Jack.

But Red Bull Racing is a different entity these days. Losing Adrian Newey in my opinion was the kiss of death for the Formula One project. Not that there aren't talented people at RBR currently, but they've lost a number of key pieces this season excluding Newey, and I am not convinced at all that without Newey they can remain at the top. Max is unbelievably quick, but McLaren and Ferrari seem to have overhauled them now. And were it not for Max, they'd be a midfield team at best imo since looking at Sergio Perez, there's not much in the way of results to be had. The junior team is still mired in the midfield, though Liam Lawson might be their answer for a number 2 driver. But I don't see any driver's championship for Red Bull next season at the rate Ferrari and McLaren are improving down the home stretch of this season.
 
RBR will no doubt be in a phase of reorganisation with Newey departing. It has its advantages that for the time being, they've kept Horner on. The people departing their team at the moment are part of their institutional legacy. Moving them on at this stage is a good choice, in my humble opinion. They'll be looking to start a new project with the likes of Lawson at the helm, new powertrains, new regulations.

KTM performing a big shuffle is akin to their attitude towards the racing end of their company, so part of their ethos. Good to see the big heads roll, when they're chopping and changing their teams line up. It makes it somewhat easier for all parts of their organisation to accept how they're dealing with internal development.

Being so close to the top, as they are at the moment, both in regards to machinery and riders, hopefully gives KTM an extra incentive to keep pushing and to look for that extra pace, as their riders keep saying.
 
And because Acosta is thought to be a world champion in waiting

Plus if something truly dire happened with KTM and they yanked all the funding for their GP project before next season starts, that would leave Pedro potentially without a ride. Though were that to happen, I wonder how secure some of those seats are at the moment elsewhere on the grid. Plus I wonder how Dorna would even handle that type of situation.
 
We would have "I am calm" 2.0 From Carmelo Ezpeleta.

Remember Kawasaki/Hayate? At worst, KTM would be made to run for a yr while other teams scrambled over Acosta's signature. Or one team would currently buy out an existing rider (just like KTM did with Pol) contract to get him.
 
Plus if something truly dire happened with KTM and they yanked all the funding for their GP project before next season starts, that would leave Pedro potentially without a ride. Though were that to happen, I wonder how secure some of those seats are at the moment elsewhere on the grid. Plus I wonder how Dorna would even handle that type of situation.
If KTM would pull out during the off season, I can see:
HRC
Aprilia
Yamaha
tear up a contract

Would you want
Marini, Mir or Acosta
Rins or Acosta
Bezzecchi or Acosta
Miller, Oliveira or Acosta
Aldeguer, Morbidelli or Acosta
 

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