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KTM's in trouble ?
- Thread starter TK4
- Start date
Sounds like a particular electric car company I won't name, who happens to have an earnings call tomorrow that might not go very well I hear.
Priller
Well-known member
Something similar in RideApart today (minus the trademark bitchy cattyness of Soup):
https://www.rideapart.com/news/7383...agusta-gasgas-lay-off-executive-cuts-revenue/
Sounds like KTM is genuinely in real trouble. They've grown sales aggressively and exponentially, but also took on a bunch of debt and didn't respond nearly quickly enough to slowing sales as interest rates climbed. Was listening to an episode of Front End Chatter recently, and they talked about how there are literally tens of thousands of unsold bikes they've been churning off the assembly line without anywhere to go, meanwhile dealers are stuck with '24 models clogging up the lot. So they're faced with a choice of slashing prices (which then affects future value as well as killing used value, pissing off existing owners) or sitting on hundreds of millions of stock that may end up in the crusher.
And while they finally admitted that they had a problem with the cam finger followers on their '18 and '19 890's, they also admitted that they've known about it for four years, and it took until owner complaints forced their hand to own up. The whole tone of their response has been awful, and they've managed to foster a huge amount of ill will. Doesn't help that the rest of their lineup has developed a reputation for being dodgy as well.
It'll be interesting to see how far they fall. They still sell a huge number of bikes, and have plenty of loyal customers, so I can't see things shutting down altogether, but I could see a takeover from a creditor or some other major shakeup on the ownership end. What a weird business.
https://www.rideapart.com/news/7383...agusta-gasgas-lay-off-executive-cuts-revenue/
Sounds like KTM is genuinely in real trouble. They've grown sales aggressively and exponentially, but also took on a bunch of debt and didn't respond nearly quickly enough to slowing sales as interest rates climbed. Was listening to an episode of Front End Chatter recently, and they talked about how there are literally tens of thousands of unsold bikes they've been churning off the assembly line without anywhere to go, meanwhile dealers are stuck with '24 models clogging up the lot. So they're faced with a choice of slashing prices (which then affects future value as well as killing used value, pissing off existing owners) or sitting on hundreds of millions of stock that may end up in the crusher.
And while they finally admitted that they had a problem with the cam finger followers on their '18 and '19 890's, they also admitted that they've known about it for four years, and it took until owner complaints forced their hand to own up. The whole tone of their response has been awful, and they've managed to foster a huge amount of ill will. Doesn't help that the rest of their lineup has developed a reputation for being dodgy as well.
It'll be interesting to see how far they fall. They still sell a huge number of bikes, and have plenty of loyal customers, so I can't see things shutting down altogether, but I could see a takeover from a creditor or some other major shakeup on the ownership end. What a weird business.
VW has avoided being shady for a bit. Maybe they pick up KTM too. They seem to be trying to get ducati to have some dirt options and that isn't the best fit imo.
I think KTM's issues are well beyond 790 camshafts or internet generated questions about reliability or QC on other models.
In recent years they bought Husaberg, Husqvarna, GasGas, and recently MV Agusta. They closed Husaberg, and started selling Husky & GasGas dirt bikes that were essentially differently colored KTM's. There are (were?) some differences with the Husky's, but for the most part just additional production of the same models and competing with themselves. My 2017 Husky 250 has a different subframe and suspension but isn't much different from it's KTM counterpart as it shares engine parts and many others.
Buying MV was foolish. An expensive, but very pretty niche motorcycle was never going to add anything to either top or bottom line, and the list of previous owners of the marque is as long as your arm. I think Harley sold it for a single dollar.
They also bet big on E-assist mountain bikes, that appear to be sales dogs. Pretty cool and I would like one but they're targeted at a very narrow range of potential buyers.
Too much expansion in too many directions with corresponding over-production has resulted in them competing with themselves.
I also think we're at a time where the prices of new bikes have climbed to a point that a large portion of the riding public can't reconcile. I've heard more and more people saying, "I never thought I'd spend $15k on a bike and now it's well over $20K." I think generational memory is creating a barrier for many would-be purchasers.
A new 2025 KTM 500 EXC-F starts at just under $16k and there are 2 other editions (!!!!!) climbing to $18k (plus a GasGas and a Husky, so 5 500cc models THAT ARE THE SAME!) That's a crap ton of money for a dirt bike, even if it's road legal.
I think consumers get comfortable with the prices eventually, but that resistance combined with high interest rates is making the situation worse.
In recent years they bought Husaberg, Husqvarna, GasGas, and recently MV Agusta. They closed Husaberg, and started selling Husky & GasGas dirt bikes that were essentially differently colored KTM's. There are (were?) some differences with the Husky's, but for the most part just additional production of the same models and competing with themselves. My 2017 Husky 250 has a different subframe and suspension but isn't much different from it's KTM counterpart as it shares engine parts and many others.
Buying MV was foolish. An expensive, but very pretty niche motorcycle was never going to add anything to either top or bottom line, and the list of previous owners of the marque is as long as your arm. I think Harley sold it for a single dollar.
They also bet big on E-assist mountain bikes, that appear to be sales dogs. Pretty cool and I would like one but they're targeted at a very narrow range of potential buyers.
Too much expansion in too many directions with corresponding over-production has resulted in them competing with themselves.
I also think we're at a time where the prices of new bikes have climbed to a point that a large portion of the riding public can't reconcile. I've heard more and more people saying, "I never thought I'd spend $15k on a bike and now it's well over $20K." I think generational memory is creating a barrier for many would-be purchasers.
A new 2025 KTM 500 EXC-F starts at just under $16k and there are 2 other editions (!!!!!) climbing to $18k (plus a GasGas and a Husky, so 5 500cc models THAT ARE THE SAME!) That's a crap ton of money for a dirt bike, even if it's road legal.
I think consumers get comfortable with the prices eventually, but that resistance combined with high interest rates is making the situation worse.
I could see that working to acquire a dirt portfolio, but Ducati and KTM both being under the VW umbrella would make for a very weird MotoGP season competing directly against each other. Dorna can't afford to let another major manufacturer disappear, especially when Ducati is already dominating.
Priller
Well-known member
Everything you say about debt to buy brands, pricing and multiple models with different colour plastic is very true, but I think you're underestimating the huge impact that perceived quality has on buyers, especially when you're trying to market yourself as a prestige European brand. Bikes aren't cars, and people aren't as willing to put up with sh*te reliability for them as as they are in leasing a Beemer for three years and then dropping it like a hot potato before the repair bills start adding up. Also, many of the bikes you list above are dirt-oriented, which is actually where KTM is doing best. Where there has been a total crater in sales is apparently in the street bikes, which are way, way down. And that's where the poor quality perception is worst.
In my experience, the perception of KTM quality has plummeted. Whether this is based on hard data or Facebook comments ultimately doesn't matter. If you said KTM to someone ten years ago, they would likely have associated high performance for the money and fun. Now, I guarantee it'll be about poor reliability and dismissive customer care..
Way, way back in the early '80s, Honda faced the same reputation, so they went well above and beyond to build stone reliable bikes to combat that reputation head on. When Triumph was resurrected, they knew the brand reputation was for poor reliability, so the first decade or so worth of bikes were built like hammers, heavy but indestructible, even if it meant they lagged a bit in performance. In both cases, the companies understood that it was critical to go completely the other way to squish that rep, otherwise people would look at even a normal fault and go, "Aha! I knew those bikes were crap!"
KTM hasn't done any of that, and their PR in regards to perceived failings has been abysmal. Despite admitting cam issues, in downplaying it they still gave the impression that they think the unhappy owners are a bunch of whiners. None of this will achieve what Honda and Triumph achieved by going so far the other way that nobody could ever claim the bikes were poorly built. It only amplifies the perception people already have.
Add the premium pricing you note, and buyers are walking away. Why should anyone pay extra for a bike that very well could be unreliable, and from a company that appears to hold their customers in disdain? Then add the credit crunch, and now they're in real trouble. Would it have been cheaper to go above and beyond a few years ago to address their quality perception than it is to dump a bunch of unwanted bikes on the market at cut rates now? I think it would be. Would it have solved all the issues you list above? Definitely not, but it would have helped a lot.
Dirty Frank
Well-known member
Regarding the investment in E-assist bikes its amazing how many companies have tried to kick that cat with big misses. Its the cooperate equivalent of Charlie Brown trying to kick that football with Lucy.
I have 2 gas gas e bikes I picked up for less than half price they are awesome for 2 grand but for 6 would have been hard to justify.
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Apart from faltering corporate health, I think KTM's bike sales future will be schizophrenic with the dirt bike division experiencing little to no impact moving ahead. The competition is very far behind compared to the depth and breadth of Big Orange's dirt bike offerings.
Where KTM will hurt is their adventure and street bikes segment, as the broader market is saturating the market with very competitive models. Unlike pure dirt customers who were born with a wrench in their grubby little fingers, this target demographic's first instinct to a warning light on the dash will be to take it to a dealership. These buyers will absolutely not stand for that kind of unreliability, especially at these inflated prices.
Where KTM will hurt is their adventure and street bikes segment, as the broader market is saturating the market with very competitive models. Unlike pure dirt customers who were born with a wrench in their grubby little fingers, this target demographic's first instinct to a warning light on the dash will be to take it to a dealership. These buyers will absolutely not stand for that kind of unreliability, especially at these inflated prices.
Dirt riders have been (un?)happily paying the Orange Tax for years.
Priller
Well-known member
Agreed, though the question seems to be whether the street side has gotten so big that it could drag the dirt side down with it. A huge percentage of their growth over the last decade has been on the street side, after all.
Maybe MV Agusta is cursed! Not sure how HD's struggles and subsequent settling down were timed compared to their acquisition and divestment of MV...
Ducati and BMW went through similar reliability issues and they came through it. I think KTM's quality control needs work as does the way they deal with problems when brought to many of their service departments. We all know there's some crap service departments out there regardless of the brand they are that won't help you, KTM just seems to be less obliging.
KTM has some excellent niche models and they'll continue to sell just fine but like Lightcycle stated the models that are more close to other manufacturers models may suffer.
If you want a stompin big HP V-twin KTM is your only option. Same if you want a modern 2-stroke offroader. Same if you want a ADV bike that can hardcore offroad as well right out of the box.
I have two KTM's. There is nothing outside of KTM that can do what these two can do and I ride them the way they have been marketed.
KTM has some excellent niche models and they'll continue to sell just fine but like Lightcycle stated the models that are more close to other manufacturers models may suffer.
If you want a stompin big HP V-twin KTM is your only option. Same if you want a modern 2-stroke offroader. Same if you want a ADV bike that can hardcore offroad as well right out of the box.
I have two KTM's. There is nothing outside of KTM that can do what these two can do and I ride them the way they have been marketed.
Polaris may be there with them. Similar story, tons of inventory, few sales. Some people speculate that cfmoto hurt them by offering a solid competitor st a much lower price.
Mad Mike
Well-known member
Having been around auto and high tech for decades, having worked in product dev with and for large European companies I have learned some things.
Winning on performance and specs are all that counts in product design. Dependability engineering doesn’t happen in any meaningful way, they let customers do the product prooving. Reliance on third party systems is big, vertical manufacturing less so.
Dresden
Well-known member
Not just Polaris as BRP and every other "Toy" manufacturer is there as well. BRP and Polaris though also have sleds as part of their lineup and with last winter's poor conditions it's just another stress on sales. I'll admit this might be my last winter on sleds as well if we don't get much snow.
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