Stefan Pierer Interview Part One

Alan Cathcart | February 12, 2015

KTM President/CEO Stefan Pierer is the most significant person in European motorcycling. With an 8.5 percent share of the total European motorcycle market, and booming sales in emerging markets worldwide, the Austrian company (in which Bajaj Auto, India’s second largest manufacturer, holds 47 percent of the equity) is a global player in practically every different model sector—both on and off road.

Things kept getting better in 2014 for Pierer and partner Rudi Knünz in KTM’s holding company, Cross Industries, when KTM continued to promote its ‘Ready to Race’ mantra via competition success. Tony Cairoli (MX1) and Jordi Tixier (MX2), completed a clean sweep of the Motocross World Championship for KTM. It also totally dominated the World Enduro Championship via Christophe Nambotin and Matthew Phillips, with Pierre-Alexandre Renet completing the Austrian firm’s dominance by winning the Enduro2 crown on a Husqvarna made in KTM’s Mattighofen factory. Marc Coma also registered KTM’s 13th successive victory in the grueling Dakar Rally in 2014.

KTM also defeated the might of Honda to retain the Moto3 road racing Manufacturers’ World championship, which the Japanese giant had upped its game to try to win back. But Honda did succeed in turning the tables on the Austrian firm to win the Moto3 Riders’ title for the first time ever, as Aussie Jack Miller was unable to catch the younger Marquez brother in points in spite of winning the last race of the season at Valencia. That  final round was also where Pierer announced that KTM would be returning to MotoGP competition in 2016, after its last experience in the category ended in tears in 2005.

The chance to meet Stefan Pierer for yet another one-on-one in-depth interview in his private office at Pierer Industries—his own personal holding company—uncovered the background behind this roll call of success and his plans to build on it for the future.

Stefan, it seems KTM continues to fly high. Can you give me a summary of where it stands right now?

Yes, we had another record year in 2014, with an increase of 20.7 percent in turnover to 864.6 million [Euro]. So based on preliminary figures we reached 865 million Euro in sales, and we made 158,760 units in total, 28.2 percent up on 2013 and including 15,000 Husqvarnas. It’s an outstanding result with an EBIT [earnings before interest and taxes] ratio of 9 percent… So 72-73 million Euro in profits, something like that. And in 2014, for the first time in KTM’s company history, more than 100,000 motorcycles were produced here in Austria at our factory in Mattighofen, in which we invested around 85 million [Euro]. This means that since 1999, when production started in this plant, more than 1.2 million vehicles have been manufactured there according to our ‘Ready to Race’ philosophy.

What was the balance of KTM streetbikes built in 2014 compared to off-road models?

This was the first year that on-road was bigger that off-road. So although we also had an increase in off-road sales, on-road is growing much faster than anything else. So we basically had two strategic success elements: the first one was that KTM is now seriously on-road with big bikes like the 1290 Adventure and 1290 Super Duke, and then the growth in volume of our joint venture products coming from India.

How are those sales split between developing markets like India and South America, and mature ones like Europe, the USA, Australia and Japan?

2014 was the first year where we had more than 50 percent of sales outside of Europe—48 percent in Europe and 52 percent outside. Then in the USA and Canada it’s around 23 percent of sales, because the market in the States seems to have recovered and is continuing to grow. We saw a year-on-year increase there of 20 percent to about 25,000 bikes, and it’s still our biggest market.

But our big growth is coming from Asian countries like Malaysia, Indonesia, the Philippines, Vietnam and Cambodia. Plus, Latin America is also growing fast, and the most successful country there for KTM is Colombia. There our distributor is a big, but very serious local company that’s selling around 120,000 Bajaj motorcycles a year that they assemble from CKD [complete knock down] kits, and almost 4,000 KTMs, with 90 percent coming from Bajaj in India in CKD form.

How many other assembly plants does KTM have at present?

We have them in Malaysia and Colombia already. Then Brazil is going online in the next months, after that Argentina, and then the Philippines is under serious planning. But the biggest one of course is with our partner Bajaj in India, with 300 people in its Pune plant making 60,000 KTMs last year on two separate assembly lines. And last year we also began KTM assembly in China, with our partner CFMoto. They produced 1,000 bikes in the first year from CKD kits delivered from India, and it’s running very, very well. That’s going to increase quite a lot since we’ve already agreed on a joint venture to start during 2015.

To read the rest of part one of the Stefan Pierer interview in this week’s issue of Cycle News, click here


 

Alan Cathcart | European Editor

Cathcart has ridden practically every road racer and streetbike ever built and written about them in Cycle News. They don’t call him Sir Alan for nothing.

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