If the new KTM CEO, Gottfried Neumeister, thought that the worst of the period was behind him after the successful conclusion of insolvency proceedings at the end of May, he was seriously mistaken.
First, the second three-month production shutdown had to be restarted at the end of July and the broken supply chain for the approximately 75 models of the three brands KTM, Husqvarna, and GASGAS had to be put back on track. To achieve this, inventory levels had to be further reduced, the power struggle against the previous majority owner, Stefan Pierer (68), had to be resolved, and a credible business plan for 2026 and 2027 had to be presented to the new company boss, Rajiv Bajaj.
But even Neumeister's first business plan for 2025 didn't live up to its promise. In December 2024 the Pierer Group still hoped to sell 230,000 motorcycles in 2025. In the spring, the number was revised to 150,000 in consultation with Bajaj.
Since restarting at the end of July, production has been taking place on four lines, but only in one shift instead of the previous two. This means that approximately only 10,000 units are produced per month, and some components are still missing.
The future Indian majority owner, Rajiv Bajaj, declared three months ago that motorcycle production in Europe was dead because costs were 30% higher than in Asia.
Rajiv Bajaj recently told CNBC TV18 that KTM's immense costs would have to be reduced by more than 50%. This affects the areas of research and development, marketing, administration, and IT. Above all, a significantly reduced number of managers at the three management levels will ensure leaner structures.
If 50% savings are also required in the motorsport program, some of the 40 factory riders face dismissal. In 2025, KTM still had 60 million euros available for the Ready-to-Race concept.
Works council chairman Friedrich Baumgartner reported in an interview with the daily newspaper OÖN that 3,400 people are still employed at the six locations in Austria, including approximately 1,450 in production. The number of employees at Pierer Mobility was reduced by 874 in 2024, from an original 6,184 to 5,310. Further positions were eliminated during the restructuring process. Following Bajaj's recent announcements, hundreds more employees fear for their jobs.
KTM downplayed speculation about further job cuts in a statement. The savings measures are to be achieved through structural measures and organizational improvements, it is said.
Rajiv Bajaj accuses the old KTM management under Stefan Pierer of greed and ultimately of gross errors in estimating production figures, which led to the high inventory levels and the company's collapse.
However, Bajaj has held a stake in Pierer Mobility AG since 2007 and has never complained about the greed of the old management in the past. When visionary Stefan Pierer revealed his plans to transform KTM into Europe's largest motorcycle manufacturer and the world's third-largest sports motorcycle manufacturer, no one in the entire group contradicted him.
A trained restructuring expert, Pierer initially managed extremely clever and inexpensive acquisitions of brands such as Husaberg, WP Suspension, and Husqvarna. In the pursuit of perpetual growth, organic growth was neglected and sales and unit sales were largely boosted by acquisitions of ailing brands such as GASGAS and MV Agusta. However, the financial cost of increasing brand value was apparently underestimated. In addition, the new bicycle division generated a loss of €400 million, which led to insolvency at the end of 2024.
Even when KTM CEO Stefan Pierer doubled sales from €1.3 billion to €2.6 billion between 2017 and 2023 and then targeted the €3 billion mark – we're talking €3,000 million (!) – Bajaj raised no objections.
But when the economic conditions deteriorated due to the COVID crisis, the war in Ukraine, inflation, rising interest rates and wages (they climbed by a total of 23% in Austria in three years), and high energy costs, the business model that had been successful for years collapsed.
Rajiv Bajaj collected hefty dividends in its best years, when the Pierer Group achieved earnings before interest, taxes, depreciation, and amortization (EBITDA) of €381 million in 2022. This represented an increase of 22% over the previous year!
Profits in 2023 were still impressive: 381,555 motorcycles were sold, and Pierer Mobility AG reported an EBITDA profit of €323.5 million. However, this figure was already 15% below the previous year's figure.
For all the justified criticism of Stefan Pierer, one should not forget that even giants like Daimler Benz and BMW lost €6 billion to €10 billion in their pursuit of higher market share with projects like Smart and Rover, and Porsche just reported a 96% drop in profits compared to the previous year.
What Bajaj describes as "greed" could also be described as commercial ambition, profit-seeking, and bold entrepreneurship. As a major shareholder, Bajaj was always adequately represented on the supervisory board and apparently remained silent, even when timid resistance to Pierer's dynamic expansion policy arose on the board of directors.
Stefan Pierer ensured 13 consecutive record years up to 2023. No one in the company could or wanted to slow down its frenzied expansion drive.
In addition, in March 2023, the one-millionth motorcycle for the Pierer Group was completed at Bajaj in India. The profit margin per motorcycle is expected to be 30%. A lucrative business for the Bajaj Group.
By November 10, 2025, the Bajaj Group could own 100% of Pierer Bajaj AG. Previously, Pierer Industrie AG owned 50.1% and Bajaj B.V. 49.9%. But thanks to a financial injection of approximately €800 million, Bajaj will now take control of Pierer Bajaj AG, which holds a 75% stake in Pierer Mobility AG. The remaining 25% of PMAG is in free float.
A solution is now emerging regarding the real estate leased by the motorcycle manufacturer. Affected are properties such as the "House of Brands" in Munderfing, which houses executive offices, as well as logistics buildings and flagship stores. These properties previously belonged to Pierer Immoreal and have been consolidated into the new company MR Immoreal, based in Wels and owned by Stefan Pierer.
Negotiations are now underway for the sale of MR Immoreal to KTM AG, which has been granted a right of first refusal. However, Stefan Pierer does not currently intend to sell the properties leased by KTM; but renting the properties is not an option for Bajaj in the long term.
Pierer Mobility AG will soon convene an extraordinary general meeting, at which name changes will also be on the agenda. The Pierer name will most likely be removed from the company names at this time.
As a result of the insolvency, KTM had to sell most of the family's assets. Sardarov has reacquired the 50.1% stake in MV Agusta Motor, the GASGAS headquarters in Spain has been closed down, and the X-bow car company Sportscar has been sold off.
But the reduction in personnel, the squandering of assets, and cost-cutting measures such as the cancellation of certain motorsport commitments by Husqvarna and GASGAS are unlikely to be enough to return the group to profitability by 2027.
The Pierer Group's sales force has been significantly reduced. Numerous renowned dealers are already looking for additional brands for their outlets.
KTM CEO Neumeister recently complained in an interview with the business magazine TREND that he had not had sufficient information about KTM's impending insolvency when he took office in September 2024. In reality, however, the collapse had already become apparent in the last quarter of 2023. Apparently, there were already around 70,000 unsold motorcycles at the end of 2022.
At KTM Factory Racing, the first cost-cutting measures were implemented at the end of 2023 because the slowdown in growth was already clearly evident in the 2023 annual report.
Then, payment deadlines for dealers were extended, discount wars began, and production continued at full capacity for too long, until warehouses were bursting at the seams.
Neumeister has undoubtedly taken on a challenging task at KTM. In the USA, the Pierer Group generated sales of approximately $960 million in 2023. But since then, market share in the United States has been declining.
In the 2024 fiscal year, Pierer Mobility AG, KTM's parent company, recorded a sharp decline in sales of 29% to €1.879 billion. Earnings before taxes (EBT) were also negative, at €1.276.6 billion.
A further significant decline in sales is expected for 2025 due to the two production shutdowns. But at least the restructuring profit will restore positive equity.
In its report for the 2024 financial year, Pierer Mobility AG announced: "The restructuring plans provide a basis for a likely positive development in the 2025 financial year, despite an expected decline in sales."
But the second production stoppage from the end of April to the end of July 2025 and the challenging supply chain problems soon dashed these hopes.
Neumeister must constantly combat new sources of conflict and at the same time spread confidence despite the adverse circumstances.
Since the completely failed, euphoric TV interview on Sunday at the Brno GP ("We build the best motorcycles in the world", he announced after the first MotoGP podium of the season), Neumeister has avoided prying questions from TV stations. He prefers to record homemade film sequences and post them on the company's own social media channels.
Communication at KTM has been severely restricted since last year; apparently, primarily compliant and subservient reporters are welcome.
But the concept of this attempted "message control" has not significantly improved the situation at KTM AG.
In May Bajaj Auto International Holdings B.V. entered into a call option agreement with Pierer Industrie AG, which allows Bajaj B.V. to acquire Pierer Industrie AG's 50.1% stake in Pierer Bajaj AG by the end of May 2026, and thus indirectly control the financial holding company Pierer Mobility AG. Such a change of control requires regulatory approvals, which were granted on October 14. The shares can now be transferred to Bajaj B.V. under this call option, which will then acquire control of Pierer Mobility AG.
Bajaj Auto will then own a clear majority stake of 74.9% in the financial holding company Pierer Mobility AG and 100% in Pierer Bajaj AG. Around 25% of PMAG is in free float and is traded on the Vienna and Zurich stock exchanges.
Stefan Pierer, a longtime KTM CEO who purchased KTM in 1992 and stepped down from all positions in January 2025, may no longer hold any shares in the Pierer Group by mid-November.
However, the 68-year-old industrialist owns extensive other investments and an impressive real estate company. The structure of the holding company Pierer Industrie AG (PIAG) includes a considerable industrial portfolio: It holds 100% of the shares in Abatec in Upper Austria, a leading company for electronic components in Austria; revenues of €250 million, 220 employees. PIAG also owns 80% of the Pankl Group, which produces and develops high-tech components for racing, aviation, and mobility with a total of 4,500 employees and annual revenues of €1 billion. The Pankl Group also includes Schwäbische Hüttenwerke Automotive GmbH (SHW), which supplies pump systems and engine technology for the automotive industry. In addition, PIAG, through Robau-Beteiligungs GmbH, holds a 34.5 percent stake in Rosenbauer, a leading global provider of fire and disaster protection, which develops and produces vehicles, extinguishing technology, equipment, and digital solutions for fire departments. Pierer still owns 49.9 percent of the major German automotive supplier Leoni AG, after selling a 50.1 percent stake to the Chinese Luxshare ICT Group on July 10, 2025.