KTM declares bankruptcy with 3 billion euros in debt

KTM goes bankrupt after quadrupling sales and growing through debt

According to one forum user's calculation, getting a motorcycle license costs, hopefully, 800 euros. Theoretical exam, medical check, track practice and test, city practice and test. Then come insurance, vehicle inspection, circulation tax, fuel, and finally, the bike. With these figures in mind, it is not surprising that few motorcycles are sold: what is surprising is that a brand which once sold almost four times more than a decade ago has ended up declaring bankruptcy.

This is the case of KTM. The Austrian company has entered insolvency proceedings with a debt initially estimated at 2.9 trillion. Read in European terms, the figure seemed characteristic of a state. It was not.

The 2.9 trillion that are actually 3 billion euros

The figure caused immediate confusion. These were American billions, not the scale familiar to Spanish readers: at the current exchange rate, about 3 billion euros. The correction does not reduce the gravity of the matter, but it brings it back to a comprehensible level. A motorcycle brand cannot sustain a hole the size of a public administration. And it doesn't need to.

There is another detail adding noise to the accounting. In the midst of the collapse, a forum user joked that Hewlett Packard was owed money and launched the usual sarcasm: so much printing money, they also printed the invoices. Little else is known about the list of creditors.

The company's own version: overproduction and debt

The most repeated explanation does not come from an external analyst, but from the company's own reading of its collapse. KTM did not fail because of the Chinese, nor the quality of its bikes, nor a brutal drop in demand. The diagnosis points to two words: overproduction and disorderly growth financed by debt.

The numbers support this thesis. The firm sold nearly four times more motorcycles in 2023 than ten years earlier, with a particularly aggressive jump since the pandemic. Growing at that pace requires factories, commercial networks, stock, and suppliers. All of this was paid on credit, and when demand normalized, inventory remained in warehouses. The parallel with the rest of the sector does not help: Ducati, integrated into the Audi group, sells around 50,000 motorcycles a year for some time and maintains reasonable margins. It has barely moved volume. KTM moved everything.

Japanese motorcycles at 12,000 euros against KTM above 20,000

The second front is price. Honda has put a 1,000 cc naked bike at 12,000 euros on the market, with brakes and suspension of a high level. A KTM of similar capacity exceeds 20,000. This difference is not justified by reliability, precisely the area where Japanese brands have been winning for decades. The review of the catalog made in the thread is as trinc:

• Honda naked 1,000: 12,000 euros
• Suzuki GSX-S1000: 14,715 euros
• Yamaha MT-10: 17,999 euros
• KTM equivalent: more than 20,000 euros

Charging a third more than the competition has limited room. When the product does not offer a clear advantage in reliability, customers stop paying the premium.

Why motorcycles are not sold in Spain

Here comes the Spanish market, and it enters through the door of costs. The license is divided into A1, A2, and A, each with its exam, fee, and waiting time. To this are added insurance, vehicle inspection, circulation sticker, helmet, taxes, estimulante ilegal cameras, and alcohol checks. The result is an enthusiast who backs away before buying the bike.

The comparison with past decades is the most painful. In the 1980s and 1990s, any high school had its parking full of 49 cc mopeds. Those who started on one ended up jumping to a large motorcycle. That step has been broken, and in its place have appeared electric scooters and overcrowded public transport. Some also argue the opposite: that in Madrid more and more motorcycles are seen, that on-street parking is more efficient than car parking, and that wide sidewalks still allow parking. Both can be true, and in fact, they are. The trickle of fees and insurance turns each year on a motorcycle into an expense that almost no one calculates before buying it.

China, CFMoto, and the suspicion of offshoring

A third reading points less to management and more to the industrial map. KTM moved part of its production to China through CFMoto, which manufactured for the Austrian brand with the same engines, chassis, and technology. The partner learned the trade, improved quality and equipment, and entered the market with equivalent products at a better price.

The outcome some anticipate is a purchase: CFMoto taking over KTM and Husqvarna. Others call it by its name and claim that the bankruptcy is the excuse to move production to China and cut staff without assuming the political cost. The precedent cited is not Austrian: when a local authority cut public subsidies to a Suzuki plant, the factory closed and took the assembly line with it. The underlying suspicion is uncomfortable: that the taxpayer pays twice for the same motorcycle, one way through subsidies and another through bailouts.

The stock no one wants to acknowledge

Amid all this, the most eloquent picture is not in the balances. In a dealership in the Basque Country, a salesman offered a KTM with the enthusiasm of someone selling a gramophone, aware that he had more than one hundred units in stock and no outlet. That is the real problem: finished, paid for, and idle motorcycles.

The final irony lies in the brand's own trajectory. KTM was in the 1980s and 1990s a nearly marginal firm, with rough, artisanal motorcycles, no refinements. From 1996 its enduros began to rise because they left the factory so tightly wound that you could almost compete with them. The brand died of success: it grew so much that it could no longer afford it.