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At KTM, production was shut down from December 13, 2024, to March 17, in order to reduce the inventory of up to 130,000 motorcycles. But in mid-March, only 200 of 4,100 employees initially returned to work, and presumably only 60 to 100 motorcycles were assembled in the first week. All four production lines were supposed to restart by June in order to be able to produce the planned 230,000 motorcycles in the 2025 fiscal year.
This plan seemed very optimistic from the start, as the financial decline of KTM AG had already become apparent in the second half of 2024 and drastic restructuring programs and cost-cutting measures had to be implemented.
The insolvency proceedings also disrupted the supply chain of Europe's largest motorcycle manufacturer, which had produced 381,555 motorcycles from brands such as KTM, Husqvarna, and GASGAS in 2023.
On February 25, creditors accepted KTM's offer to pay 30 percent of its liabilities amounting to €1.8 billion by May 23, 2025. To do this, fresh capital of €600 million had to be found. In addition, the major Indian shareholder, Bajaj Auto, transferred €150 million by April 1 to enable production to be ramped up again.
But late on Tuesday, April 22, Pierer Mobility AG announced that the new investors had not yet made a binding commitment for the €600 million cash injection, so the topic of the capital increase was removed from the agenda of the extraordinary general meeting on Friday, April 25.
This morning, Pierer Mobility AG went public with more bad news: KTM must cease production again! The Innviertel-based motorcycle manufacturer has no choice but to shut down production again. The Mattighofen plant will be shut down again as early as next Monday (April 28). After just six weeks, KTM is short of various components.
Insiders are not surprised, as the supply chain stretches across dozens of countries – from Eastern Europe to Italy to China. In Asia in particular, delivery times have been significantly delayed since the COVID crisis, reaching up to a year after the order. For most components, KTM has to accept delivery times of more than 20 weeks, even from partners in Europe. One can imagine that, given KTM's strained financial situation, some suppliers are only accepting prepayment.
Pierer Group employees were informed of the production stoppage this morning via a video message from new KTM CEO Gottfried Neumeister. More bad news for employees: The entire company returned to a 30-hour workweek through a works agreement, resulting in corresponding wage cuts. The agreement is valid from May 1 to July 31 and is intended to prevent further layoffs.
Neumeister informed the workforce on Thursday about the problems with the supply chain. Several components are missing to continue production at the Mattighofen plant, caused by the more than three-month shutdown after the turn of the year.
Due to the insolvency proceedings initiated in November, KTM managers were no longer authorized to order new components that were not manufactured in-house. Some suppliers therefore stopped producing KTM parts, as they feared the company's total collapse. Some suppliers in Austria themselves found themselves in financial difficulties due to the KTM bankruptcy. When the first of four production lines was restarted on March 17 2025, employees were faced with partially empty spare parts warehouses. The available material was only sufficient to build 4,200 motorcycles, company boss Neumeister admitted today. The question of when the urgently needed supplies will arrive in Mattighofen cannot be answered at this time.
Full operation on all four production lines is now scheduled for July 27, and then in early or mid-June.
