In a shocking move, KTM’s parent company Pierer Mobility Group has removed four directors. As such, their board of directors with be downsized from six to only two members.
The decision will leave only CEO Stefan Pierer and Co-CEO Gottfried Neumeister to helm the company. The biggest name to be cut is Hubert Trunkenpolz, who is the grandson of one of KTM’s founders Hans Trunkenpolz – the “T” in the brand’s name. The other three directors are Alex Pierer, Florian Kecht, and Rudolf Wiesbeck.
The decision follows the group’s continued financial struggles which already saw two rounds employee downsizing. They had cited high costs of living in the United States and recession in Germany.
According to the company’s statement, “The European economy is stagnating, with the important German market in particular in recession.”
“In the USA, consumer purchasing power remains low due to the high cost of living and long peirod of expensive consumer credit.”
PMG has seen a -6.3% decline in registrations in the US from January to September 2024. September alone saw a decline of -14.3%. Such alarming figures had prompted PMG to claim that “rapid recovery cannot be expected.”
The company which owns KTM, Husqvarna, GasGas and MV Agusta announced earlier this year that they are planning for more growth in non-European markets in partnership with Bajaj Auto (India) and CFMoto (China).
The statement adds: “Despite the slight reduction in inventories, further destocking remains an important objective.”
“Pierer Mobility remains clearly committed to supporting dealers and suppliers as a strategic partner in these difficult times. As a result of measures taken in this regard, working capital and consequently the company’s net debt and interest expenses increased.”
Due to the worrying circumstances, PMG has landed itself in, it confirmed that it is also revoking its 2024 guidance.
The statement concludes: “As a result of these circumstances Pierer Mobility will fall short of expectations in terms of revenue and earnings, as well as with regard to the reduction in working capital and net debt in the current financial year, and is revoking its guidance for the 2024 financial year.”
“A new review of non-cash value adjustments will also be carried out by the end of the year.”
