Pierer Mobility, the parent company of KTM, GasGas and Husqvarna (and major shareholder of MV Agusta) has announced major cuts. In addition to focusing on its own e-bikes, an even larger part of production will be moved to India and China, as well as R&D, which will result in a loss of 300 jobs in Mattighofen.
Pierer Mobility announced a major reorganization in a press release this week. The bicycle brand R Raymon will return to the hands of founders Felix and Susan Puello, while the other bicycle brand FELT will be sold in early 2024 to a consortium in which Florian Burguet (former manager of KTM Canada and member of the board of directors of Pierer Mobility) is a member. matters.
Instead of the bicycle business, Pierer says he now wants to focus entirely on electric bicycles that are marketed under the brand names GasGas and Husqvarna and which will be expanded in the near future.
In addition, Pierer announces that it will move an (even larger) part of production to India and China, which will result in the loss of 300 jobs in Mattighofen. According to Pierer, those jobs will be moved to India and China. Production will be increased at Bajaj and CFMOTO. In addition to production, part of R&D will also be moved to Asia.
Pierer Mobility says it has taken the step because management is concerned about the economic situation in Europe and that moving production and R&D to Asia will save on labor costs. “This is, among other things, intended to leverage the cost advantages in these regions and accelerate development and industrialization processes,” the press release said.
According to Pierer, inventory costs at dealers have risen enormously this year due to significantly higher interest rates, despite good market demand. Pierer Mobility says it is strengthening the dealer structure by offering extended payment terms and larger discounts.
Pierer says it has sufficient liquidity resources to support not only its dealers, but also its suppliers to absorb the significantly increased financial burden due to interest rate increases and to improve their liquidity.
The reorientation of the bicycle branch will have a significantly negative impact on the overall result of 2023, for which reason the Board of Directors has adjusted the guidelines for the 2023 financial result to an expected growth of the 2023 financial year from 7 to 9 % and an EBIT margin of 5 to 7%.
Pierer Mobility expects the global economic environment to be difficult in the financial year 2024. It will be a year of consolidation for the group, which will be used to strengthen its core business. To ensure profitability, management will implement double-digit cost savings in fiscal year 2024. The Board of Directors expects turnover to remain unchanged.
– Thanks for information from Motorfreaks.