Cycle News is a weekly magazine that covers all aspects of motorcycling including Supercross, Motocross and MotoGP as well as new motorcycles
Issue link: https://magazine.cyclenews.com/i/128353
TM is still on a roll, with little letup eve n in its key marke t - the USA. There, the fall in value of Uncle Sam's greenback against the Euro dollar co ntinues to deflate revenues eve n thou gh KTM sales are still spurt ing ahead, allow ing the Austrian firm to overtake BMW as the top selling European motorcy cle marque (in terms of units sold) in the American market from a year ago. After tr eading the path over the past decade fro m bankruptcy to booming times , fueled by a succes sion of motocr os s and enduro World titles , and now by victory t his season in the rival sec tor of 125cc road racing Grand Prix, the Austrian kings of the off-road world have built a global re putation for the excellence of their custo mer prod ucts on the back of success in racing. This is a similar pat h to that followed by KTM's road racing cou nte rparts at Ducati, w hose do minance of the spo rting V-twin four-stroke sector KTM is now even more fi rmly targe ting, with the first of its 100-percent tarmac V-twins - the 990 SuperDu ke - entering production t his month. Behind the walls of KTM's modem , new 25,000-square -mete r factory in the small town of Mattighofen, not far from Salzburg, lies one of the mode rn-day motorcycle world's greatest ongoing success stories. Most of the credit for orchestrating the turnaround in KTM Sportmotorcycles AG belongs to the man wh o, for the past decade, has been the fi rm 's managing director : 4B-year-o ld Stefan Pierer, the firm's principal individual shareholder and the guy with the vision to build the comp any into its pre sent dom inant position in the world's off-road and dual-purpose markets. The chance to quiz the architect of the company's success for a progress repo rt on KTM and to learn more abo ut its future plans was as revea ling as eve r. K Q Stefan, since we las t spoke a year ago, has KTM continued to grow? so. Th is model 2004 we increased arou nd A Yes, very much77,000 units, repyear ofing Euro 403 million production byincluding in tu rnover, 9 percent , to resent 14,000 sport minicycles. But this has been held do wn by the we ak U.S. dollar - without that, we 'd have bee n loo king at an 11- to 12-pe rcent increase over 2003, because North America represents 30 percent of our turnover, more t han $100 million last year. Still, compared to three years ago, when our volume of prod uction was 45,500 units annuallyand our turnover just Euro 220 million, that's stillquite a satisfactory rate of growt h, eve n if it's slowed a little because of the curre ncy situation. T his has me ant w e 're los ing an ex tra $ 10 million in profit, w hich is th e re aso n we dec ided IB mo nth s ago to cancel the idea of go ing MotoGP raci ng wit h o ur 990cc V4. Q How big is the KTM workforce now? A We have 1667 empl oyees at present, of w hich aro und 1200 are in Austria, the "",,"est in our company-owned importers around the wo rld. These now include not on ly North America - so, the USAand Canada - but also Japan, the UK, France, Italy, Germany, Spain, Benelux and Switze rland, and we start now too in the Eastern European cou ntries, with ou r first such wholly-owned co mpany in Hungary. Australia is still an independent import er, but the y do such a good job we don't believe we could do any better ourselves, so we're happy to leave things as th ey are! Q Given Austria's location at t he crossroads of Europe and KTM's status as the first Western motorcycle manufacturer to raise its profile in the old Communist bloc countries back in the I970s, when Guenady Moiseev of Russia won t he World motocross title with a KTM, are the Eastern European countries likely to grow in importance for you in the fut ure? A Yes, they are - and we've just started to get a lot of demand from Russia, so I'm ",""ure th is will be even more important in the future , too. There's still a certain tradition for off-road racing in these countries, which helps us get esta blished in places like this - plus, with so many of the grow ing countries from the old Eastern bloc now joiningthe EU, it assists ou r stra tegy to try to minimize losses on the U.S. do llar by concen trating for the next three years on increasing sales in Europe, w hile we check out how the new on-road strategy works. This is partly the reason we're not going to sell t he 990 Duke in the USA to start with - we're a ve ry aggress ive company in terms of pro duct deve lopment into road markets, but we 're very conservative w hen it comes to exposing ourselves to the sliding dollar. We figure it's already a big risk for a company like KTM to try to esta blish itself in the street bike sector - so we shouldn't double t he risk by gamblingon the exchange rate . At the stage right now that we have a limite d prod uction of V-twin road bikes for the startup period, it makes sense to sell these closer to home w here you have a fixed return without the exc hange rate concerns. Plus, if anything goes wro ng, you have a direct linkage with the custo me r to fix it.