[UPDATE, January 3, 2025: AKV offered RideApart some clarification about subsidiaries that may soon also declare insolvency, as well as Pierer's real estate dealings.
For the sake of clarity, I'll add the relevant updates to the relevant sections of this original piece, and clearly note where the new information has been added. Normally, I'd stick an update right up at the top here, but they will make more sense in context, and we want to maintain as much clarity as possible.]
Original piece follows.
Ever since news of KTM AG's restructuring and insolvency broke, we've been finding more details that are worth paying attention to. Why? Because no matter how the KTM situation shakes out, the motorcycle industry will be impacted at multiple levels.
As most motorcycle enthusiasts who aren't totally new to the niche already know, KTM owns Husqvarna Motorcycles (not its chainsaws or lawnmowers, which are separate companies), as well as GasGas. It also currently holds a controlling stake in MV Agusta, which it's now busy trying to sell its shares in after working so hard to acquire it over the past few years. To be clear, it doesn't own MV Agusta outright, unlike the situation with Husqvarna and GasGas.
But there's more to it than those four motorcycle OEMs, which is what this explainer is about. Buckle up, because it's all a bit complicated, but I'm going to try to untangle it for all of us right now.
There's More Than One Business Entity Called KTM
To further clarify, there are a lot of individual subsidiaries within the KTM organization that are also called KTM. So, to keep things absolutely clear, I'm talking here about KTM AG, which is the main entity that's currently going through insolvency proceedings in Austria.
KTM AG is the motorcycle manufacturer that you know and love. But as AKV Europa has elucidated in its restructuring reports, three separate Pierer subsidiaries that have KTM in their names have declared insolvency and are currently undergoing self-administered restructuring efforts.
These are, in order:
- KTM AG (motorcycle manufacturer)
- KTM Forschungs & Entwicklungs GmbH (research and development)
- KTM Components GmbH (self-explanatory)
If you look at an organizational chart for the entire group that KTM AG is part of, there's a lot more to it.
The umbrella company over all of the Pierer organizations, including KTM AG once you go down far enough, is Pierer Industrie AG. It's here that we can see the most recent publicly available organizational chart. Although it's been simplified (I'll get to that in a minute), we can still learn some things from it.
In Pierer Industrie AG's most recent company presentation, which dates from October 2024 (or just before all the bad news broke), we can see that there are three entities that sit below Pierer Industrie AG: Abatec (electronics manufacturer), Pierer Bajaj AG, and Pankl AG.
Pierer Bajaj AG is a joint venture formed between Pierer Industrie and Bajaj Auto Limited. This joint venture, says the org chart, owns 75 percent of Pierer Mobility AG. Pierer Industrie owns 50.1 percent of Pierer Bajaj AG.
For most motorcycle enthusiasts, it's Pierer Mobility AG that you're most concerned with. The org chart divides the sub-entities that sit under Pierer Mobility into the following categories: Motorcycles, Bicycles, Design/R&D, Digital Transformation/IT, and Motorsport.
Under Motorcycles, Pierer Mobility lists KTM AG, which includes Husqvarna, GasGas, its shares in MV Agusta, and its ongoing partnership with CFMoto. Note that Zeeho is listed here as well; Zeeho is CFMoto's EV-only sub-brand.
Under Bicycles, KTM lists Husqvarna, Gasgas, and Felt after divesting of some of its other bicycle brands in the past year.
Under Design/R&D, it lists Kiska, KTM Forschungs & Entwicklungs, and Cero (prototyping/design firm).
Under Digital Transformation/IT, it lists Pierer Innovation, Avocodo, KTM Informatics, and LX Media.
Finally, under Motorsport, it lists KTM Factory Racing.
Dip down into the footnotes, and you'll see additional orgs that aren't listed in the main org chart. Strangely, the October 2024 presentation doesn't mention WP Suspension even once, even though previous org charts have listed WP Suspension as a brand that nestles under KTM AG, alongside Husqvarna Motorcycles, GasGas, and its currently-owned shares in MV Agusta.
Examples from the footnotes include Pierer Industrie AG's 100 percent ownership of WESS Promotion GmbH, 100 percent of Moto Italia SRL, and 33.33 percent of a private jet charter service called JetFly. If you click the WESS link above, you'll see a good example of this situation extending beyond only the Pierer business entities that are encapsulated by Pierer Mobility.
Now, Pierer Industrie AG notes that this is a simplified organizational chart, but the closer attention you pay to AKV Europa's published findings so far, the more of an understatement you begin to understand that phrase to be.
For example, AKV mentions that "payments to subsidiaries of the KTM Group that are not essential to operations have been stopped." It goes on to add that, "as a result, several subsequent insolvencies of other KTM companies are now expected."
Elsewhere, it mentions that there are "over 60 subsidiaries" to the KTM Group in total. To clarify, it's absolutely not clear at this point which and how many of these subsidiaries may be facing insolvency next. What we do know is that AKV expects the first three won't be alone for long.
[UPDATE January 3, 2025: AKV offers the following clarification about the subsidiaries previously discussed:
"Subsidiaries are mentioned here, especially in the area of IT support; names that have been mentioned are Avocodo GmbH, Pierer eCommerce GmbH and KTM Technologies GmbH. We do not yet have any precise information, but it can probably be ruled out that this is one of the sales subsidiaries, as these are considered relevant for the continued existence of the KTM Group," AKV told RideApart.
"However, it is suspected that MV Agusta may be sold," the firm concluded.]
It's Even Bigger Than Just KTM, Though
As I alluded to when talking about some of the investors that have shown interest in KTM AG parent company Pierer Mobility, KTM already has significant ties with two other major international motorcycle OEMs. Here's where we'll talk about what those ties entail.
First, let's talk about Bajaj Auto. The Indian OEM has had a long-term partnership with Pierer, and it's a joint venture between Pierer Industrie AG and Bajaj Auto that actually owns the entirety of Pierer Mobility (which, in turn, owns KTM AG). With me so far? Good. As KTM motorcycle fans may already be aware, it's also Bajaj that manufactures many of KTM and Husqvarna's small-displacement roadgoing machines. Think about the 390 Adventure and Duke, or the Vitpilen and Svartpilen 401s.
What you may or may not also be aware is that Bajaj also distributes KTM's bikes in India and Indonesia, which are two of the biggest motorcycle markets in the world (by volume). Now, Bajaj also manufactures a ton of other motorcycles that it sells under its own name, in multiple markets around the world. We dove into those numbers in another Data Deep Dive, in fact. Bajaj also manufactures the Speed 400 and Scrambler 400 X under license for Triumph, which have also been selling like mad.
KTM also has a long-term manufacturing and distribution partnership with CFMoto. While you may be aware that the 790 and 890 engines are made by CFMoto under contract for KTM, it's also worth noting that since 2023, KTM has been CFMoto's exclusive motorcycle distributor in Europe. This includes CFMoto's Zeeho EV sub-brand.
The Stakes For Powersports Are High
So, to summarize, here are all the powersports brands that could directly be impacted by the ongoing KTM situation:
- KTM Motorcycles
- Husqvarna Motorcycles
- GasGas Motorcycles
- WP Suspension
- Bajaj Auto
- CFMoto
If you're wondering why we aren't talking about Pankl here, that's because Pierer Industrie AG's current organizational chart lists Pankl as significantly removed from either Pierer Mobility AG or KTM AG. At the same time, since the World Hard Enduro Championship was also not located anywhere near Pierer Mobility AG on the org chart, it's anyone's guess how safe Pankl actually might be when all the dust settles.
Another interesting thing the AKV report mentions is the sale of shares in another Pierer entity that isn't listed on the org chart, Pierer Immoreal GmbH. That's a real estate company, which apparently owns things like the massive manufacturing complex at Mattighofen, KTM stores, and more. This raises additional questions.
If Pierer ends up getting rid of some of the real estate that it currently owns, that means one of two things will happen to those properties. Either a) they'll no longer be necessary, since AKV also mentions plans for "(partial) relocation of production," or b) Pierer will end up renting those facilities from their new owner.
It's unclear how this would save money, exactly, but RideApart is also neither a business nor a tax publication, so this is well outside our purview.
[UPDATE January 3, 2025: AKV offered the following clarification to RideApart regarding the real estate question. The restructuring administrator also cautions that the current reorganization process is still very much uncertain.
Here's a direct quote about the real estate thing, though:
"The planned sale is already close to completion and is not a property per se (and therefore not the new operating property), but shares in a property company that was only purchased shortly before the insolvency began. I cannot confirm a planned sale of the business property."]
Both Bajaj and CFMoto are mega international OEMs in their own right. While they'll no doubt be impacted by KTM's current struggles, they'll both likely land on their feet. Just probably not entirely unscathed, which is why it seems to be in their interest to make the kinds of potential investor overtures they reportedly already have.
Source: AKV Europa
