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Boise, ID, USA
In plain english: "It's worse than we thought..."
https://www.pierermobility.com/en/newsroom/eqsfeed/2880675?type=adhoc
Part 3 : Don't Catch a Falling Knife : PIERER Mobility AG has to cover additional liquidity requirements at the level of KTM AG.
If you made $1,000 producing a new KTM, you'd need to sell 100,000 bikes to pay back $100M loan (assuming no interest).
Admittedly, 2021 and 2022 were 'good' years, and KTM sold 300,000+ bikes.
Catch the knife, I say!!
Who is we?
Certainly not anybody at KTM because their actions indicated they knew exactly what was going on.
Let me know where I go to sign up for those 0% loans. If you find it, they should refinance the 1.5 billion they already owe at the same place.
Wow i thought Suzuki was the poor one.
The Shop
DeCal Works Huge Plastic Inventory of UFO and Polisport kits.
Luxon 4-Post Bar Mounts
$189.95 - $239.95
I don't know, the math of bike sales always messed with me. A two stroke 300cc off road bike is around 12K, a 1000cc four stroke street bike is around 20K, isn't there more profit on the dirt bike if you sell all the dirt bikes you can make? Why fuck with street bikes at all?
Suzuki isn't poor, they just don't care about dirt bikes.
If bikes are like cars than it's actually pretty close in manufacturing costs for a lower level bike and higher level one. That's why you're bread and butter would be the adventure line, make way more money selling it than a 250cc 2-stroke.
I don't understand it either. Actually, you can get a very high performance 4 cylinder 900cc for $9,999 (just one example). https://www.kawasaki.com/en-us/motorcycle/z/supernaked/z900
I feel dirtbikes have been going the way of the bicycle industry, they just keep raising prices, we keep buying. There is no parity in the motorcycle industry when it comes to pricing vs what you are getting.
Suzuki could by the KTM group with their lunch money.
Without knowing the numbers could it be a scale thing? How many of those z900 does kawi sell?
Then there is the market, if we keep buying when prices go up they’ll keep raising prices.
So yeah, more profit on dirt bikes?
Lol Suzuki is the smart one and flush with cash. Big market cap. KTM/PMG is like a zit on a horse's ass compared to Suzuki in magnitude.
If market capitalization is the measure of success, Suzuki is 82 times more successful with a market capitalization of $19.8 billion, verse Pierer's market capitalization of $240 million.
I know. But hey our bikes have plenty of shit You don't need and crappy suspension.
no I'm thinking cheaper production costs on the z900 cause they make a shit load of them.
This. I read something about this the other day. Every new model a company makes is a loss until they hit a certain sales level to pay for R&D expenses, marketing expenses, and other fixed costs. Once they hit that level, every unit they sell is vastly more profitable. That’s why it is so tempting for an OEM to overproduce. That’s also why an OEM can still make money on higher volume models with big FDIs at the end of the year. It is tougher for an OEM to make money on limited production models because of this. The vast majority of KTMs fall into this category. Limited production models can still be profitable, but there is less margin for error.
KTM new/old strategy of creating a perception of superior quality and wanting to build 1 less bike than the market demands to avoid any pricing pressure seems out of place in today climate. Obviously stuffing the dealer network to keep production and the stock price high was a major fail as well.
GL!
So you’re saying we are finally getting an updated RMZ??
Pit Row
Would KTM be in this same position had they not acquired Husky and GASGAS?
Going off gut feeling I would say probably not.
OEMs do not make much on the sale of a bike if any - yet they make their profit on parts they sell during the life of that bike. Magazines have done this in the past - they figured out the price if you had to buy each part to build an entire bike separate. Probably 30K to buy every part from a dealer to build a bike or more. The longer they don't change a bike. the more of the exact part they might sell. Its a long game. Over time, they stop making parts available, this is why finding vintage parts is so hard now. Now, if they have to discount to move old bike inventory, they might break even on a sale or maybe lose a little at first.
FWIW the market seemed to like the clarity. Stock is up today.
Why, so they can sell 1,000-2,000 RMZs, when they sell 786,000 bikes in India.
Forget about bikes, imagine the number of cars they sell.
In value 12 times more cars than bikes...
I’d like to know how many more KTMs they would have sold had they not offered white and red models. I’m guessing it would be a wash but with a ton more marketing expense. I know going through a recent mini bike stage with my family we bought what color my kid liked and that was the only deciding factor- we had all 3 colors at one point. Long and short of it had those options not been available I like most would have just worked our way up through the orange line up.
This!!!!
I do feel like they could have used Husqvarna to be like the off-road brand. Make all of the XC. XCW and EXE lines white and roll with it. But the way they did it, they were just eating their own. Never made sense, add to it the red bike and it really makes me scratch my head. KTM had such a good thing going and they had to go screw it all up.
To the point made above, I really doubt many people were like, "I'm kinda done with Honda, and no way in hell will I ride a KTM, so thank god there is Husky". I just don't see it. It came down to a color choice and a few little detail changes, but they would never be able to recoup the massive amounts of money spent on branding and marketing for 3 different brands. They would have been better off just issuing KTMs with different color plastic options available as an accessory.
Not quite correct. If you're just going off the cost to build the bike vs what they sell it to a dealer they actually have a lot of profit there. But when you factor in engineering, marketing, and other overhead into each unit the gap gets narrower. If I had to guess it was bicycles that really tanked them, followed by the Gas Gas buyout. Husky was 10 years ago so not near as much of a factor these days.
Once things stabilize I'll toss some money at the stock. They will get back on solid footing and be fine in the long run but I could see them totally getting out of bicycles and possibly nuking Gas Gas entirely. They definitely need to get their SKU count down on the number of models they offer.
KTM would alienate their biggest consumer base if they stopped making xc/f models and let husky do it. Enduro models is what first made them popular in the US.
Obviously the way they did it isn’t working either but they couldn’t give up enduro models under the ktm tent.
KTM race
HUS dual sport/ electric
GG - develop air cooled low budget entry level trail bikes
Seems like something like that could work?
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