From everything I have read, it sounds like KTM has nearly 2 years of bikes sitting in a shed they can't move. I understand they cant come out and just sell them to the general public at cost price as this will cause massive issues with their own re sale value, trade value, and will obviously upset a lot of people who have just paid a substantial amount more for their bikes however what I dont get is why they dont use these bikes to up their support program.
I dont understand why KTM doesn't go to local dealers and say, "We have these bikes in storage. Here is the cost price on them. Offer these bikes to the riders, supermini dads, customers who have shown you support or who you have wanted to work with in the past but haven't been able to get them a deal and have them sign NDAS around the purchase price.
- This clears the bikes for KTM
- This helps riders who are racing local races and or gets more teams/ riders onto KTMS opposed to other brands
- This doesn't affect their resale value and trade-in value
These riders/ people who purchase these bikes can then race them for a year and potentially sell them for what they paid for them on the used market!
Now for everyone saying "but they are last years models" as much as we all think we need to be on 2025 factory KTM bikes 98% of us dont!
They then have to try to sell new bikes at a profit to a market that would then be flooded with orange and spoiled on the new crazy-low price standard? I’m assuming that’s how it would go.
The NDA bit is interesting, but you can’t tell me that news wouldn’t end up leaking to the rest of us.
Lots of the bikes you read about are small displacement street bikes that aren’t even sold here.
You understand that KTM are currently making losses and not profits?
Which means the product they’re selling is already UNDER ‘cost’ price.
‘Cost price’ includes everything.
Not just the material cost in the machine, but everything to run the business..
Material cost, manual labour, staff, machinery, design, development, testing, properly rental & upkeep, computers, phones, WiFi , marketing, sponsorship, travel, fuel, paper for the printer, brooms to sweep the yard, pens for the staff, and every other conceivable item required for that business to run.
This is all the ‘cost’ price of the bike. And if they’re making a loss, then the product (bike) is already being sold below ‘cost’ price.
JESUS! What? That helps in no way! They are not able to be giving bikes away, the administrator has to try to get the company back on it's feet, that's the idea, always. Giving away bikes are part of a support program, not good for business, they need MONEY to get things back on track, not just handing our freebies, that's what got them into this situation!
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This. We don't know the model breakdown of their huge 2 years inventory but I would hazard there are not many competition bikes nor dirt bikes in there. KTM sells more street bikes than dirt bikes anyway.
As other people have said, we don't know which models are unsold.
Street bikes for the European market, may not meet the Euro V+ standards, so won't be able to be sold in Europe.
Apparently you forgot about the KTM dealers they're not the ones in financial trouble but yet you want them to sell their product at cost....that will work well....
Unless they are accelerating depreciation and amortization. These are non-cash expenses that can be figured into a product show a "loss" while generating cash flow, mitigating income taxes and keeping the business alive.
OR ….. They could crush them and throw them in the dumpster and take the tax break.
Im not saying the dealer sells them at cost, Im saying KTM sells them at cost. They say to a dealer, "Here is a bike with an RRP of 14k, you can take it for 10k and on sell it"
This gets the bike out of KTMS' hands, this gets the last year model sold sooner, and this gives the dealer a chance to help someone out with a cheap bike that they want to offer support to.
I know they need to make money moving forward, but how do they expect to do this when they also still have so much old stock sitting around?
Breaking even is sometimes as important as making a profit in business. It still is cash flow, it still is moving product, and it still is moving towards an end goal.
And yes when I say cost I mean the cost of the bike, the cost of the assembly, the cost of storage for the year and everything in between.
If my local KTM said to me You can buy a 2024 EXC 350 for 12k I would take it! (Australia-based) As I know, in 12 months it would still be worth around 11k, so it makes for a cheap brand new great bike.
KTM North America already auctioned off their excess warehouse inventory to dealers.
Other regional subsidiaries probably had similar situations.
Not every expense is part of cost of goods sold. You can have a gross profit and net loss.
Sure, they should lose more money on every deal, they'll just make up for it on volume.
Their margin is smaller than you might think, here are their 2023 numbers (motorcycles only).
Revenue: €2 416.4 M
Sales: 381 555 motorcycles
Average revenue per motorcycle: €6333
EBITDA : €371.0 M (15.4%), average of €972 per motorcycle.
EBIT: €214.4 M (8.9%), average of €562 per motorcycle.
9% EBIT that's €1 100 earned before interests and taxes on a €12 500 450 SX-F.
It's all based on average, I would assume they have their highest margins on premium adventure bike, not sure about 450s but bottom line is that they start losing money real quick after rebates.
Same reason you don’t work for zero dollars an hour?
I sent this thread to your boss!
That is crazy math. Building 450f doesnt sure cost much its pretty simple bike and been same for many years but overhang they are build around brand is just too much. They should least get double of that to make any profit with 12.5 as other 450f are around 10k not 12.5k. If thet somehow could build premium bike with higher price but i dont see difference against other brands. Strong point earlier was they dealers had parts ready for your bike but thay have just gone model where they keep inventory at factory and order parts when needed and that have bring some long delays.
10% margin is quite common in the motorcycle industry.
Yamaha Motors (2024) EBIT 10%, net margin 7%
Ducati (2023) EBIT 10.5%
Pit Row
Look at Rivian lmao
Nobody wants a duke 200 or a 250 ecx-f-xec-xcf-w
The best way they could shift some bikes is to offer dealers longer lines of credit or to give discounts to dealers, however this likely only improves their cash flow and gets rid of surplus stock, it is also very unlikely they’re in the position to be able to offer longer lines of credit, from the gypsy/anton wass pod; if what he was saying is true it sounds as if the length of credit terms with dealers could be playing a part in the mess they’re in as it is, he stated payment terms of over a year which is completely crazy unless they have the capital reserves to facilitate which they clearly didn’t,
This doesn’t address the wider issue that the company currently isn’t profitable from what we’re hearing, cutting margin to sell more units doesn’t automatically improve bottom line profitability it just means you have to shift more units to make the same profit as selling them at full price.
I think most people are going to wait this out to see what happens. I would be hesitant to buy a new KTM at even 2/3 price if I wasn't sure I could get parts for it later.
I'm one of em
Yeah 10% is good when your selling price is par to others. Now you can get Honda/Yamaha/Fantic/Triump 450f for 10k(Kawasaki even less) and KTM asking 13k from same bike. They should have that 10% from same level as others to make it work. I also see MX bikes just basic products when road bikes have much more components cutting their margins but maybe im just wrong.
KTM is suffering from the new Kawasaki standard: $3000 off for all eternity.
Kawasaki has had this promoton going on since early fall 2023
So when I (cash buyer) look at the KTM promotions, which usually just consist of low or zero percent financing, I am not at all tempted.
Where are you guys getting $13,000 for a standard KTM? My dealer when buying the first inventory of the new model year the 450 and 350's are $10,300. That's within $500 of Honda and Yamaha 450's at the same dealer for new models.
I work for myself. I've taken on many jobs over the past 20 years that have not gone ideally. We managed to get out of those jobs, breaking even, which meant we could move on and keep moving forward.
It is VERY common for a business to suffer a loss at some stage and trust me when I say breaking even is far more important than a loss
I'd assume it's cheaper to build in Japan than it is to build in Austria.
It used to be the other way around, have KTMs ever been cheaper than Japanese bikes?
European countries are also big on pensions and social safety nets, and I bet they retire younger than Japanese. It's probably why KTM has been sourcing parts from Asian countries, trying to keep the costs down.
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