Squashing the KTM Rumor Mill

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Austrian firm KTM says it is preparing to launch a hardtop X-Bow and “green” off-road four-wheeled vehicle. It’d make sense, but a glimpse at the OEM’s financials don’t show much room for the production of such units.

KTM ended its 2007/2008 business year Aug. 31 with sales of 92,385 motorcycles, up from 90,306 units sold during the 2006/2007 business year. Car sales numbered about 100 units.ktm_xbow_cross1

While recent year-end revenues were €605.7 million (about $776.9 million), up 7 percent from €566.1 million in the prior year, a drop in the U.S. dollar exchange rate to the euro brought earnings down 49.4 percent from the comparable period, to €20.1 million (about $25.8 million).

Then, in November, feeling the pinch of the global economic slowdown, the OEM announced a plan to cut motorcycle production by 10 percent and layoff 60 workers this year.

As if that weren’t enough for the company to shy away from breaking into production with two new models, my sources tell me KTM CEO Stefan Pierer’s credit may be stretched to the limit.

Late last year I talked with Jon Erik Burleson, president, KTM North America, Inc., and Hubert Trunkenpolz, managing director, Sales & Marketing, KTM Power Sports AG. Here’s what they told me about the original X-Bow as it relates to the U.S.

– You’ve told me it’s coming to the U.S.
TRUNKENPOLZ: We want to sell it in the U.S.

BURLESON: The car has offered a huge brand impact for us in the States already. However, as Hubert has mentioned, our biggest stumbling block is to address the liability issue. When you look at the car, there are some issues that you have to prepare for in this market.

TRUNKENPOLZ:
We’ve passed European homolugation. It’s racecar homolugation, so you can’t produce a million of them, but that’s not our intention. We’ve also placed some purchasing restrictions on the car: We do not sell it to anyone under 24 years old, and every customer must attend a five-hour driving course.

– Would KTM dealers in the U.S. sell the product?

TRUNKENPOLZ: For sure. It’s a 100% KTM product.

Will the new additions to the X-Bow show up in Geneva as “concept” vehicles? Probably. Will the concept vehicles go into production any time soon? My answer: Nein.

Visit Dealernews.com to read more of our reporting about KTM.

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