As the Coronavirus pandemic gradually disappears in the rear-view mirror, in its aftermath the global motorcycle industry continues to experience rapid and sustained growth. Leading this charge among European companies is the KTM Group, whose parent company PIERER Mobility AG finished 2022 on a continued high, after a 12th successive record year which saw sales of its three current brands (KTM, Husqvarna and GASGAS) continue spiralling upwards to 375,452 motorcycles in 2022, an increase of 13% compared with the previous year. 268,575 of these motorcycles carried the KTM badge, 75,266 were Husqvarnas and 31,651 were GASGAS. Add to that the 118,465 pedal cycles and E-bicycles sold in the same period under its Husqvarna, GASGAS, Felt and R Raymon labels (up 15% compared to 2021), and the company’s overall revenues increased to €2.437 billion, up 19% year-on-year.
This resulted in an EBIT (Earnings Before Interest and Taxes) gross profit of €235 million, a massive 22% increase over one year ago, meaning its President/CEO Stefan Pierer, 66, duly celebrated the 30th anniversary of his taking control of a bankrupt KTM and its 160 employees in January 1992 (making 6,300 motorcycles that first year), by consolidating his place as the most significant figure in the European motorcycle industry. PIERER Mobility is a global player in practically every different model sector, both on- and off-road, with combustion engines and, increasingly, electric power. The chance to speak with him at length in his office in KTM’s home factory, at Mattighofen in West Austria, uncovered the background behind this success, and his plans to build on it for the future.
AC: Stefan, in 2022 PIERER Mobility achieved its 12th consecutive year of record sales. But could it have been better if not for problems with the supply of components?
SP: Yes, I’m sorry to say that we lost 15,000 units in the first half year of 2022, owing to our Tier 1 electronics supplier Bosch operating a sort of triage system, whereby they reduced the supply of all orders by 30%. So we got 70% of what we ordered from them, which in overall terms equals 15,000 customers waiting for streetbikes. So, apologies to them – but it was outside our control. Otherwise we might have ended up with a 35% sales increase instead of just 19%! And then, there was also a boom in demand for the new five-nanometre semi-conductors, and the old 20-nanometre type. They stopped production of the 5nm ones to increase the quantity of the 20nm versions, but still we had limited availability.
AC: Has the war in Ukraine affected your production, also?
SP: Not in the motorcycle business, more for the car industry, because there are some specific supply companies located there. So automotive wiring harnesses and suchlike were heavily affected, but not for motorcycles. In the short term the escalating price of energy supplies was a concern, although that’s finally reducing, but jumping back to the first half of last year, the ridiculous increase in transportation costs was a serious concern. We had double digit cost increases for air freight, and sea freight was up to eight times higher! Normally, a 40-foot container from China to Rotterdam or Hamburg should cost around $3,000/3,500, but a year ago it was $24,000! And when you asked the logistics company, ‘Hey, is that for real?’ they’d reply, ‘Would you like to get the goods, or not? Otherwise we have another customer for that shipment.’ Crazy!
AC: So did these
