There was a brief spell from 2020 to 2023 where every powersport manufacturer was flush with cash. It was at the height of the pandemic, interest rates were low, people were desperate to go outside, and every company that made something to explore those boundless lands and roads was raking in cash hand over foot.
It was the good times.
But as the pandemic wained, interest rates rose sharply, consumer credit dried up, and the world became somehow more chaotic than it had been when everyone was locked down, people stopped dropping their hard-earned cash on playthings. At least, they stopped spending that money on the type of powersport machines that cost an arm and a leg.
Gone were the impulse buys of fully-loaded Can-Am Maverick Rs and Polaris Khaos snowmobiles. No longer were people dropping $40,000 on Slingshots or Kawasaki H2Rs. But the companies that got hit the hardest were the premium motorcycle manufacturers. Specifically, Pierer Mobility AG, the parent company of KTM, GASGAS, Husqvarna, and MV Agusta.
And now, just a few months after the company announced that not only would it be acquiring a controlling stake in MV Agusta, as well as laying a handful of folks off, and then cutting revenue forecasts, it's doing so again. But in a far more worrisome way. Folks, the board is being cut.
That never happens.
The statement was released just ahead of EICMA, where Pierer was meant to showcase how awesome all of its brands are doing in terms of product and product development. But the story is likely now to be one of damage control. "The second half of the year at PIERER Mobility is generally characterized by a high-margin product mix, especially in the offroad segment," starts the brand's release, adding, "However, the available registration data for the overall motorcycle market in the USA for the period from January to September 2024 shows a decline of 6.3%. September was also the weakest month since January 2024, with a decline of 14.6%, meaning that a rapid recovery cannot be expected."
That's not good for any company, but worse when you consider all the companies Pierer controls. But the release goes further, stating that the company's board of directors will be reduced from six members to just two, with Stefan Pierer and Gottfried Neumeister remaining as CEO and Co-CEO respectively. Like I said, you don't cut executives unless things are really hitting the fan.
Furthermore, Pierer is fully revoking its 2024 revenue, working capital, and net debt projections. The company revised it only a few short months ago when it laid folks off after purchasing a controlling stake in MV Agusta—it held a minor stake prior.
To combat some of the revenue freefall its experiencing, Pierer says that it will prioritize "de-stocking" of dealership inventory across its brands which, honestly, could be a great thing for you and I. Why? Because what that guidance means is that Pierer's brands are going to be either slashing dealership inventory prices or offering rebates and cash incentives to move product. So you and I are likely to get a screaming deal on a new motorcycle or e-bike.
Heck, maybe these price slashes will even make some of Pierer's motorcycles affordable for the average consumer?
But what will become of the brands going forward? That's still unclear. They're all still set to make a splash at EICMA, but as I stated earlier, that'll likely be more damage control than the frivolity that the company would've likely loved to embrace both by the media and public at large. Likewise, there's a host of new motorcycles on the horizon that might turn the ship around. Well, maybe.
We'll have to wait and see how this all shakes out, but for right now, things aren't looking good for Pierer.
