Pierer Mobility AG, the parent company of the motorcycle brands KTM, Husqvarna and GasGas, is on the verge of change.  The company has announced plans to cut up to 300 jobs in Austria and to relocate parts of its production and research and development activities to China and India.  This move marks a significant shift in the company's strategy due to both economic conditions and the need for more cost-efficient production.

Relocation of production and R&D outsourcing

The relocation of production capacity primarily affects the brand’s in-line two-cylinder models.  The 790 Duke is already manufactured entirely in China, and it is expected that further models in the 890 and possibly the new 990 series will be produced by CFMoto in Asia.  The joint venture between KTM and CFMoto, which has been in existence since 2017, specializes in the development, production and distribution of motorcycles.

Another strategic partner of KTM is Bajaj in India.  They have been working together since 2007, and all 125, 200 and 390 models as well as the 401 models from Husqvarna have been manufactured in India since 2011.  In January 2023, the 1,000,000th KTM motorcycle rolled off the production line in Pune.

 

Job cuts in Austria

The decision to cut up to 300 jobs in Austria mainly affects the headquarters in Mattighofen.  Pierer Mobility justifies this step with the unfavorable economic conditions in Europe and the cost advantages in Asia.  The reduction is to be achieved mainly through natural fluctuation and a reduction in the number of temporary workers from 350 to 250.  Only a small number of direct redundancies are expected.

 

Bicycle business and future plans

Parallel to the restructuring in the motorcycle segment, Pierer Mobility is consolidating its bicycle brands.  The R Raymon brand has already been sold to the makers behind Winora and Haibike, and the American bike brand Felt is to be sold in the course of 2024.  However, the electric bikes from GasGas and Husqvarna will remain in the portfolio.

 

Outlook

These strategic decisions are part of a comprehensive plan to secure Pierer Mobility’s long-term competitiveness.  The relocation of mid-range motorcycles with a displacement of 700 to 900 cubic centimeters is aimed at increasing cost efficiency and strengthening the market position.  Despite the challenges, the supply framework conditions in the sporty and high-performance off-road segment in Europe remain advantageous.

The future will show how these changes will affect the quality, design and market positioning of KTM and the other brands of the Pierer Mobility Group

 

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