The legendary brand of the motorcycle world has gone bankrupt.

The legendary motorcycle brand KTM, unable to overcome the economic downturn, has declared bankruptcy. The shares of the brand's owner, Pierer Mobility, have lost 84% of their value since the beginning of the year. KTM (Kraftfahrzeuge Trunkenpolz Mattighofen), an iconic brand in motorsports known for its orange color, was founded in 1934 by Austrian engineer Hans Trunkenpolz as a metalworking shop. KTM, which produced its first motorcycle in 1954, gradually became a manufacturer of models preferred by the world's best racers in the enduro and off-road segments.

CHALLENGING TIMES IN KTM'S HISTORY

The 1990s were quite difficult for KTM. The company went bankrupt in 1992 and was divided into three separate units: KTM Sportmotorcycles focused on motorcycle production, KTM Fahrrad on bicycle production, and KTM Kühler on automotive radiators. In 2005, KTM formed a partnership with Canadian ATV manufacturer Polaris for the North American market, but ended this collaboration within two years. However, Polaris engines continued to be used in the ATVs produced by KTM.

In 2007, KTM signed a partnership with Indian motorcycle manufacturer Bajaj Auto, selling a 14.5% stake to Bajaj. Over time, Bajaj increased this stake to 47.99%. Under the agreement, Bajaj provided production support for KTM models below 250 cc, while KTM took on the responsibility of marketing its motorcycles in the Indian and Southeast Asian markets.

COLLAPSE AFTER THE PANDEMIC

Experiencing economic difficulties after the pandemic, KTM continued production, but Pierer Mobility's financial statements suffered deep wounds. The company announced that it was facing a three-digit million euro financing gap. Pierer Mobility stated that they would enter a restructuring process by negotiating with creditors and announced plans to reduce KTM's production volume and gradually decrease its inventory. Accordingly, the output of the production facilities in Austria will be reduced by more than 1 billion euros over the next two years.

PIERER MOBILITY'S SHARES PLUMMETED

Pierer Mobility's bankruptcy announcement had a severe impact on the stock market. The company's shares fell by 45%, dropping to $7.8, with a total loss of 84% since the beginning of the year. This decline was recorded as the largest single-day loss in Pierer Mobility's history.

SIMILAR BANKRUPTCIES IN THE AUTOMOTIVE WORLD

This situation reminded many of other bankruptcies in the automotive sector. Last July, the indispensable seat brand for sports cars, Recaro, and the famous wheel manufacturer BBS also announced their bankruptcies. BBS was unable to pay employee salaries, while Recaro stated that it would focus its production solely on aircraft, office, and gaming chairs, as well as baby safety products.