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Production is scheduled for a year before a bike comes to market so you can’t just stop making things. I’m not a KTM fan or hater, and I think they will come through this relatively well having cut down their bottom line considerably and abandoning projects they didn’t want, but this is down to a bit of arrogance that has lead to them not keeping tabs on the market and the decline. The way KTM force dealers to take bikes and product for target rebates means their intel was delayed, and now they have to regroup. They’ll come out of this better, I wouldn’t be worried
Oem sends bikes to dealer. Flooring co. sends funds to oem for bikes. Flooring co. charges dealer interest on each unsold unit. Dealer sells bike and pays flooring co. Oem pays rebates direct to dealer on slow moving product. Oem offers incentives, like cash spiffs and free trips, to dealer sales people as well.
^^ ok thanks so basically the dealer will have to pay the flooring co msrp or whatever and then get reimbursed by the OEM for incentives after the sale.👍🏼
Yes, If ktm offers large rebates in order to move all the unsold inventory, They will have to retroactively offer the same discount to the dealer on all products in stock. If not the cost of old units will be higher than the new stuff, or they just fuck the dealer. We will see.
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That's what I'm hoping for as I'm in the market for a 25 350 and I'm a cheap ass
I already have a new gen 350 and have no reason to buy the 250sx, but if prices keep dropping I’ll likely pick up a leftover 24 and put some spring forks on it. The only other 2t that is appealing to me is the beta, and I need a 250cc GP bike, so I’m hoping for an RX in the future
Same, makes me nervous
Bought a new 2025 with just contingency couple months ago
This excess inventory must just be on certain bikes. When I was looking for a 300 XCW this year all local dealers(and by local being generous, over 250 mile radius) except one trying to sell over MSRP were sold out.
some MX and XC models (350s & 300s) are not the issues. From what I understand its more Dual sport and Post covid excess with everything else.
The Japanese Brands have 100 years of experience on how to handle market trends and managed the post covid surge much better than the KTM group.
I would be afraid of the resale value plummeting on a new KTM if they didnt figure out how to pull out of this mess.
The other way an OEM can work around this is to give the dealer a certain amount of incentive money that can be applied to the sale of existing inventory for each new bike they order from the OEM.
I am a fan of KTM/Husky/GasGas have 4 in the garage I really am not real concerned on parts etc going into the future. I am concerned with KTM not having some kind of press conference stating the current situation and putting minds at ease. If I was a dealer I would be really concerned with losing customers. Keeping the consumers like us in the dark seems another bad decision.....
Did you not see the video they did with the co-CEO's? This is merely a "Pit Stop". lol
But you are right about consumer confidence and I believe that's a big part of the reason they need to keep racing. Make it seem business as usual in the public eye or risk a huge drop off in sales.
I worked for Enron back in the late 90's, early 2000's and I remember Jeff Skilling(CEO) telling us right before the big collapse, that the "company has never been stronger or in better financial shape. It's simply negative press driving the stock price down". I was out of job and the company collapsed a few months later!
Worth noting that when the OEM pays the rebate, it’s as a parts account credit. The dealer has to request a check back for the funds if they don’t want to use it to cover their parts ordering.
Additionally, those funds don’t come immediately. So let’s say a small dealer is sitting on 12 units with $3,000 in rebate each and they blow them all out. They have 3 days from registering the unit to pay off the flooring company, but it might be a couple of months til they see the rebate money. That’s especially important when dealers are selling the units well below the invoice amount because of the pending rebate. So now that dealer is having to float $36,000 for several weeks until the rebate money can be requested back as a check or ach payment.
I worked for a company that went bankrupted 15 years ago. The restructure didn't work and the bank came in to sell off all of the company's assets. The banks got paid first.....there wasn't much after that to split up. The secured creditors got paid next. Anyone that did business with this company wound up getting screwed at the end. I think, for example, the riders might be the last to get paid. This will shake things up and change the way that the contracts are drawn up.
Well said, this could kill a lot of small dealers and put good folks out of work. Even in good times it is a struggle.
Pit Row
As long as they still get to play MotoGP it's all good.
Ryan Dungey might even get hit by this. Depends on how his contract was structured.
Funny thing is ktm sales are up 22 percent over last year.
Do they count units sitting at dealerships as sold?
Kind of, if dealers have bikes sitting on the floor for a long period of time the dealer will pay the bike off from the oem to get rid of the flooring costs. So if they wanted to be disingenuous they could probably show those numbers as well since technically it was sold.
You shouldn't worry for KTM. Worst case, bancrupt and the bidders will fight to take over.
It's a good business, specially if you get to hit the reset button and lose all luggage.
Gasgas and Husky however, that I'm not so sure of it would continue. Gasgas would be first to be cut.
On the other hand. Spareparts isn't rally a problem. Buy orange plastic and call it a KTM when you sell it and most people that buy used bikes wouldn't care. Maybe 500 usd off compared to a real orange ride?
Terry Everett is going to sneak in while nobody is watching, register the KTM trademark, and start selling Chinese Rokon knockoffs under the name.
If KTM can survive running air forks they can survive this
I'm curious about what deals they made with suppliers during Covid... Any long term guaranteed minimum orders for parts/raw materials? Might help explain some of the glut.
Only asking because I've heard that is an issue with a few MTB companies now.
By dungey, do you mean sexton?
RD's last bonus would have been paid out years ago.
Joe had to take a smoke break.
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