KTM undoubtedly has big problems, but how serious is this and will the brand disappear from the market?

Video from KTM AG below

https://www.youtube.com/watch?v=1P8uT_7JGNM

According to KTM AG, they have entered into so-called “legal structural proceedings” which can be described as a kind of bankruptcy protection that gives the ownership group some protection, room for maneuver and a little more time to find solutions. KTM AG is doing this to show that they are taking action and have both the will and ability to survive, whether the two largest owners agree with this is not known. However, there is no doubt that KTM has struggled in recent years, technical challenges have cost a lot, they have produced too many motorcycles in a failing market and changing geopolitical conditions that have affected people’s finances and purchasing power. Declining demand in combination with increased costs and overproduction is a bad combo and definitely a risk. In other words, a series of coinciding conditions that are often referred to as “the perfect storm”. Such “storms” can actually topple large companies, it has happened before.

But will KTM fall over?

Hardly, and there are two factors in particular that support this. The KTM brand is strong enough to survive regardless of who owns the company and the owners still have the opportunity to succeed with a restructuring and a refinancing. Part of this exercise will be about reducing costs, getting rid of debt or financial obligations. If KTM fails to do this, it is likely that someone will buy the remains and start again in a new and restructured form. There will no doubt be others who will be very interested in buying this. But regardless of the outcome of this financial exercise, there will be consequences. KTM must now restructure, which essentially means cutting costs. This may have consequences for the model portfolio, the size of production and otherwise a tough prioritization that in total could contribute to KTM becoming a smaller player that can become less aggressive and visible in the market. But that KTM will disappear as a brand is not particularly likely. Importers and the dealer network will act as buffers between the customer and KTM, and during this period all parties will do their utmost to get KTM back on track, as they say in the video.