Due to overproduction and a decline in sales, KTM has built up a stock of 130,000 machines, some of which were still produced according to the Euro5 emissions standard – but Euro5+ applies from 2025. What now?
The discount battle has long started and KTM and its dealers are under enormous price pressure. KTM has been offering generous discounts for some time now and the restructuring on November 29, 2024 has only made that worse.
It’s not just bargain hunters who benefit from this by asking dealers for generous to ruinous discounts on new machines. Solvent KTM dealers also put pressure on the factory by offering to buy stock machines from the manufacturer – at special prices. These discounts are in turn passed on to bargain hunters, further reducing prices for the end customer.
An additional problem is posed by the large stock across the entire model range, usually from 2023 or older, that are homologated according to the Euro5 emissions standard. In principle, these can no longer be registered in the EU from January 1, 2025, because Euro5+ will come into effect from next year.
In practice, the manufacturer can apply for an exemption for so-called “discontinued series”, which means that they can still be approved for road use until the end of 2026. Each country regulates this exemption independently. It is awarded in the order of 10 percent of the expected sales volume of the corresponding model. Several brands have used this scheme in the past.
If for certain models more than this 10 percent of the annual requirement has not yet been homologated according to Euro5+, the only option is a so-called day approval. The dealer or factory must register the new engine for Euro 5 this year. This does entail a number of costs, including the BMP that must be paid in the Netherlands. Moreover, it is a brand new ‘used’ motorcycle.
The legal situation is different in Switzerland, where the import date applies: all engines imported into Switzerland before December 31, 2024 can be registered for on-road use with Euro5 at any time, even years later.
KTM currently has 130,000 unsold motorcycles in stock. This enormous stock arose because on the one hand production was continuously increased and on the other hand the market collapsed, especially in the US and Asia.
Now the factory is not only left with valuable inventories, but dealers also have unsold engines. However, these are not on consignment. Consignment means that the factory places the motorcycle in the dealer’s showroom and that the dealer has to pay for it when it is sold.
KTM does not do this, but supplies the motorcycles with payment terms. Some of these deadlines have now been extended. Yet you don’t have to be a prophet to predict that dealers will also have financial problems because they have to pay the factory for engines that they have difficulty selling (or at a discount) due to the saturation of the market and the recession in many countries .
– Thanks for information from Motorfreaks.