In late November 2024, KTM, one of the world’s leading motorcycle manufacturers, declared bankruptcy due to mounting debts totaling nearly US$3.09 billion (€3 billion). The company has since entered self-administration under Austria’s insolvency laws, granting it a 90-day protection period from creditors1. This move is part of a broader effort to restructure and stabilize the company’s finances.
The financial troubles have led to a temporary halt in production at KTM’s Mattighofen factory until the end of February 2025. This pause aims to clear the backlog of unsold bikes, with approximately 130,000 units in stock, many of which do not meet the new Euro 5+ emissions standards. The halt in production is a significant step as KTM works to manage its inventory and reduce costs.
According to the proprietary Power Systems Research Database OE Link™, KTM group production volumes, including their JVs with Bajaj and CFMOTO, dropped from 350,000 bikes in 2023 to 250,000 or less in 2025, depending on how the restructuring will evolve in coming months. This figure could change significantly if KTM decide to sell some of the brands they have in their portfolio, such as Gas-Gas, Husqvarna and MV Augusta.
Despite these challenges, KTM has managed to attract investors willing to inject US$720.9 million (€700 million) into the company. The next court hearing on Jan. 24, 2025, will provide more details on the debt situation and potential rescue plans. This financial lifeline is crucial for KTM’s survival and future operations.
The company initially proposed cutting 500 jobs, but after negotiations, this number has been reduced to 300. Unpaid wages from November will be covered by an Insolvency Compensation Fund, providing some relief to affected employees. KTM has also assured customers that there will be no disruptions in the supply of motorcycles, spare parts, or customer service, despite the ongoing financial turmoil.
KTM’s racing division continues to perform well, with notable successes at the 2025 Dakar Rally. Daniel Sanders and Edgar Canet secured multiple stage wins, showcasing the company’s competitive edge in the motorsport arena. Additionally, KTM launched over 50 new models in 2025, including the popular KTM 790 DUKE, which has been praised for its agility and unique engine sound.
However, KTM’s parent company, Pierer Mobility AG, reported significant losses in 2024, with motorcycle sales dropping by 27% and bicycle sales falling by 36%, leading to a net loss of €172 million. The company’s debt grew by almost 90%, exacerbating its financial woes. The overproduction during a period of slowing demand has resulted in a stockpile of unsold motorcycles equivalent to a year of global sales.
In response, KTM has implemented a restructuring plan aimed at reducing costs and improving efficiency. This plan includes layoffs and temporary production halts at its Austrian facilities, affecting around 300 workers. Some production has been relocated to China to cut expenses while maintaining product quality.
The future of KTM remains uncertain, but there are potential scenarios for recovery. If the company secures the necessary investments and successfully restructures, it could stabilize its operations and continue production. However, if KTM fails to secure enough investment or if the restructuring plan is not approved, the company might face further financial difficulties, potentially leading to a complete shutdown or sale of the company2.
KTM’s involvement in MotoGP for the 2025 season is also under scrutiny, with plans to withdraw from the sport by 2026. The company’s racing division is implementing a 100-point plan to cut spending and focus on core operations2.
Despite the challenges, KTM’s commitment to innovation and customer satisfaction remains strong. The company’s ability to navigate this financial crisis will depend on its restructuring efforts, investor support, and continued success in racing and product development.
Possible Scenarios for the Coming Months
- Successful Restructuring: If KTM secures the necessary investments and successfully restructures, it could stabilize its operations and continue production. This would involve significant cost-cutting measures and possibly selling off some assets4.
- Continued Financial Struggles: If KTM fails to secure enough investment or if the restructuring plan is not approved, the company might face further financial difficulties, potentially leading to a complete shutdown or sale of the company.
- MotoGP Involvement: KTM has stated that it plans to continue its involvement in MotoGP for the 2025 season, but there are plans to withdraw from the sport by 2026. The company’s racing division is implementing a 100-point plan to cut spending5.
- New Investors: There is interest from big players like Bajaj Auto, CFMoto, and Hong Kong-based investment firm FountainVest, which could bring fresh funding and help KTM navigate its financial crisis.
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Emiliano Marzoli is Manager, European Operations, for Power Systems Research
