Interview: KTM’s Stefan Pierer Part II

Cycle News Staff | April 16, 2013

Last week we began our two-part interview with KTM President/CEO Stefan Pierer. This week the man many consider the most powerful in European motorcycling discusses the purchase of Husqvarna and more…

If you missed part one, you can read that by clicking on the following link:

Well, talking about the dirt, was 2012 KTM’s most successful year ever in off-road competition?

Yes, it’s been incredible! It was our best year ever in racing, and whatever we do, this will still remain one of the most important things we do at KTM, because off-road is where we’re coming from, it’s our heritage. We won all three Motocross World Championships, we won the AMA outdoor title, we finished on the podium in AMA Supercross for the first-time ever, and we won all the Enduro World Championships – and one of them with Husaberg, which was nice. So pretty much a clean sweep. And this year already for the first time we won both classes the same day in AMA Supercross, at Anaheim – that was an historic achievement.

However, even though KTM was so successful in off-road competition last year, the off-road market has declined, hasn’t it? Have your off-road sales flattened out?

Yes, they have. In some countries they have declined, but lucky enough we have had remarkable growth in the USA and Australia, and this has almost compensated for what we lost in Europe. In the USA we’re seeing that the market is stable and we’re gaining nice market share, and we’re also doing very well in Australia – it’s an outstanding market for us, and South Africa, too. In the USA we had a percentage increase of 30 percent in sales, and Australia was not less than that. But on the other hand in Italy, which was a really big market for us, we lost 80 percent. In some countries together with Husaberg we now have more than 70 percent market share, so there is limited growth potential, and the market is very badly affected in Southern Europe by the economic crisis. Our typical motocross or enduro rider is a guy working for a construction company, who works a lot of overtime and has some money to spend, but if he is out of a job then he doesn’t buy an enduro bike.

However, this isn’t just an issue with off-road, but on-road too. In the so-called developed markets like North America I would say it has found a base level, and for a year and a half it’s been stable, maybe slightly increasing by 2-3 percent, while Australia and Canada actually went up quite a lot. But the European market in 2012 lost 12 percent compared to 2011, and if you’re looking at southern Europe then it’s a 25 percent decline year on year. It’s the fifth year in succession it’s gone down. So, every market sector is losing out, and especially the off-road as well, and that’s the reason for the consolidation in the motorcycle industry. Germany is still doing very well, and also the central European markets of Poland, the Czech Republic, and so on. But then Italy is a nightmare – it’s a free-for-all. In my opinion it was heavily influenced by the strategy of Mr. Monti. He’s well perceived outside of Italy, everyone talks very highly of him, but I believe he didn’t do a good job because he tried to correct the country overnight, and more or less the mentality of the Italians if you talk to them now, is that the glass is half empty, not half full. Normally with them there’s always something to celebrate, but these days they’re really depressed – so they don’t buy bikes because nobody dares to spend money.

So this makes KTM’s presence in the developing markets all the more vital?

It’s a must. As a European manufacturer, basically you are standing on three feet: the emerging markets and Asia; North America which is still a good market because the currency and the exchange rate are okay; and then Europe is our home market and that’s where you need it to stay strong.