Is KTM on the Brink of Withdrawal from MotoGP?

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JPSLotus said:
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.
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You are way optimistic saying RBR a midfield team. W/O Max they will be just be in the last 2-3 spots aiming to fight with Sauber :p
 
Certainly in the Toronto area where I live the struggles of KTM have been evident for a few years already.

My prediction is that KTM will emerge in a few years either as a shell of it's former self, or be broken up and sold off to someone else. Trying to build bikes to compete against the Asians on a cost basis is pretty much futile now, no wonder many smaller bikes of most brands are built in Asia (including many KTM bikes).

Given the perils that KTM faces I would be reluctant to buy any of their bikes now until the dust settles.
 
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There is value at KTM and the company has assets. KTM like the rest of the industry saw a bump in sales during and shortly following covid, but they also had a supply problem. So they invested heavily in their supply infrastructure, shifting a lot of their manufacturing to Asia. The problem was that the industry as a whole has slowed down, and they are not going to be able to see a return on those investments as fast as they promised investors.
 
They have passion for racing clearly. The motoGP operation will be costing them millions of $.
It doesn't appear to make financial sense to keep it going. I hope they do. The price is getting to steep it seems to me.
 
There isn't much information on how much money Red Bull pays KTM, but I believe it costs around $25-30 million a season to run a factory team. So you have to imagine it is a considerable portion of that.
 
I dont think this will effect their GP program because they have sponsors and partners as well as customers. They also have the ability to make anything they want from raw materials, they have the equipment and engineers on staff, so I dont see this costing them much in terms of development.
 
warthog1 said:
They have passion for racing clearly. The motoGP operation will be costing them millions of $.
It doesn't appear to make financial sense to keep it going. I hope they do. The price is getting to steep it seems to me.
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The costs are high, but the overriding issue, imo, is that the racing divisions continue to soak the shareholders for money, using "marketing operations" as a nebulous justification. KTM's problem doesn't seem to be lack of marketing. Looks like they've taken a variety of ill-advised strategic risks, and mixed them with faulty manufacturing operations. In their defense, they probably didn't have covid on their bingo card.

The old days of manufacturing bloodsport are over. It was viable when the motorcycling/car companies were closely-held, family operations and ego, dignity and pride were on the line. Who cares what Count Agusta or Soichiro Honda want to do with their spare millions. MotoGP? Why not? Today, the manufacturers capable of sustaining gratitous motorsport spending are no longer interested in gratitous spending.

Modern prototype motorsport is an answer to the following question: Who can build a competitive rapid-prototype boutique manufacturing operation based upon the sanctioning body's specifications using a specified annual commercial payment? MotoGP is not modern. WSBK is trying to modernize. Maybe the commercial payments are not high enough for motorcycle racing to modernize. Maybe that's where Liberty steps in.
 
Yes I am no economist.
It just seems to me, given the declining sales of sports bikes, and the huge expense of the four stroke era, it is pricing manufacturers out, as you seem to indicate in a more structured way.
The money all of that aero andvride height control has added must be substantial. Added to the already more expensive 4 stroke engines searching for a higher rev limit. Carbon frames and swingarms, carbon discs. Where is the justification in terms of improved sales? What is the justification from a shareholder perspective? Is there one? Dunno, I am a bit of an economic dunce.
Regardless, it would be very interesting to see an estimate of what it has cost Ducati to get where they are. An absolute shedload I reckon.
 
I think at some point the teams and manufacturers are going to start expecting to at least break even doing the series. Obviously none of us a privy to the financials but given how much the series is worth and that the manufacturers etc make the product possible are going to want a piece of the pie (if they don't already have it), to significantly subsidize their racing efforts so it is closer to a 0 cost sum. If the new owners want more manufacturers etc significantly lowering the cost of racing for the factories could go a long way to ensuring their participation.

Someone here will be better situated to know than myself but I believe Ferrari get a significant kickback from the series (on top of their merchandise which is where they make most of their money IIRC) to make it financially viable.
 
p4p1 said:
I think at some point the teams and manufacturers are going to start expecting to at least break even doing the series. Obviously none of us a privy to the financials but given how much the series is worth and that the manufacturers etc make the product possible are going to want a piece of the pie (if they don't already have it), to significantly subsidize their racing efforts so it is closer to a 0 cost sum. If the new owners want more manufacturers etc significantly lowering the cost of racing for the factories could go a long way to ensuring their participation.

Someone here will be better situated to know than myself but I believe Ferrari get a significant kickback from the series (on top of their merchandise which is where they make most of their money IIRC) to make it financially viable.
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Other motorsports have reverted to spec engine parts, for example NHRA Top Fuel, Funny Car, and Pro Stock, even Pro Stock Bike has strict rules regarding the engine (i.e., cases, blocks, heads). A number of motorcycle road racing series put horsepower limits on bikes to keep things relatively even amongst the teams (at least from a technical standpoint). NASCAR has strict limits and spec parts to keep a lid on costs as much as possible, including engines, chassis, suspension components, transmissions, etc.

Perhaps it is time for MotoGP to have similar rules regarding the engine and associated electronics, basically everyone starts with the same basic parts and puts their efforts in to getting the most from what they are given, the result is closer competition and more emphasis on rider skill and team dynamics.

F1 is a perfect example of where things have gone whacko, spending hundreds of millions to field a car team, I often wonder if MotoGP will suffer the same fate over time and become so expensive to keep up that funding will dry up as teams or potential teams throw in the towel.
 
You wonder if the tales of insolvency may become a bit of a feedback loop :(
Those considering a bike purchase may look elsewhere if it seems the company is about to fold. May strangle sales further.
 

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