Pierer Mobility Loses Chairman; Ola Loses Leadership; The Dutch Lose Their Mind
InsightEV Daily Update
Last week (02-Jan-25), Pierer Mobility AG (KTM) announced that Stephan Zöchling would be appointed a supervisory board member. At the same time, Josef Blazicek, the current supervisory board chairman, resigned. Both events will apply from the next general meeting.
Pierer Mobility said that Stephan Zöchling is experienced in automotive restructuring. No further details were shared.
With Pierer Mobility's ongoing financial troubles, a substantial cash injection is needed to tide it through. The company is reeling under debt that we had initially estimated at EUR 1.5bn. However, proceedings have started in the bankruptcy court in Austria, and it is becoming clear that the debt may be significantly more. A recent Rideapart story puts the debt at nearly EUR 2.9bn, owed to more than 2,500 creditors.
From the RideApart story:
2500 creditors and counting are details that worry us even more.
KTM needs investors, and the media is already discussing some names likely to invest. Pierer Mobility has appointed Citigroup Global Markets Europe AG to reorganize its ownership structure to prepare for the upcoming financial restructuring.
The potential investors are likely to be India-based Bajaj Auto, which already owns 49.9% of Pierer Bajaj AG, the holding company that holds 74.9% of Pierer Mobility AG. Bajaj Auto is the world’s most profitable two-wheeler manufacturer and has close ties with KTM. It develops and manufactures all KTM/Husqvarna road bikes with sub-400cc single-cylinder engines. Rajiv Bajaj is the vice-chairman of the Pierer Mobility supervisory board, and Bajaj Auto has at least one more director on the board.
The problem is that any investment by Bajaj Auto hands over the controlling stake to the Indian company. That may be a bitter pill for Stefan Pierer, widely credited as the man who resurrected KTM.
However, the German publication Der Standard, in a report from 27th December, claimed that Bajaj is willing to provide up to EUR 300m to restructure KTM.
An investment and acquisition of Pierer Mobility may not make immediate sense for Bajaj Auto, as we had explained in our analysis. This is what we wrote:
The other potential investor may be China-based CF Moto, and we find them more plausible. Unlike Bajaj Auto’s already near-50% stake, CF Moto has a very small stake (<1%) in Pierer Mobility. So, any investment would not give CF Moto management control. Der Standard claims that CF Moto can put in EUR 350m - 700m to restructure KTM.
Der Standard also adds the Chinese investment group Fountainvest to the list of suitors. The group has interests in media, entertainment, sports, and telecom and owns brands like tennis goods manufacturer Wilson.
The Pierer Mobility board and the banks must agree and accept one or more offers. The publication estimates that KTM will have money by mid-January, so action must be taken before that.
Impact
While we may have a resolution to the immediate financial restructuring soon, the KTM problems will have a long-lasting impact on all the participants, Pierer Mobility’s extended universe and the European motorcycle industry as a whole. Some impact that is already visible:
KTM has to find a new owner for MV Agusta. This may likely be a Chinese manufacturer (CF Moto?) as the Chinese manufacturers have been investing in large lifestyle motorcycles and MV Agusta as a brand still holds sway.
Bajaj and CF Moto would be impacted and may need to step in as investors to minimise the impact. Bajaj manufactures some of KTM’s largest selling models (everything below 400cc) and also distributes KTM motorcycles in India and Indonesia. Meanwhile, CF Moto makes the 790 and 890 range while KTM distributes KTM and Zeeho in Europe.
Also impacted would be KTM-owned suspension manufacturer WP and also design studio KISKA which not only works for KTM, CF Moto and Bajaj but a score of other manufacturers including E2W start-ups like Zeno.
Ola Electric Loses Market Share and Leadership
December was not good for India-based Ola Electric, as it lost the crown of the country's leading two-wheeler manufacturer. The Indian market for electric scooters hovers around 100,000 units a month, though December was slow, with overall registrations of around 73,500 units.
Since April 2024, when we started tracking the Indian market, the pecking order has repeatedly changed, though Ola’s share loss has been steady.
A better chart to understand the shift would be the one below. The blue column is Ola and it has been declining steadily. The grey and green columns are Bajaj Chetak and TVS, respectyively and both have been steadily increasing. Even Ather Energy (orange column) has managed steady growth in market share since July.
The Indian market has also experienced a dip in the last two months and December volumes were the lowest monthly volumes in the second half of the year. In fact, every major participant has seen a dip in volumes over the last two months. However, Ola’s volumes absolutely tanked, declining by more than 65% within the two month period.
Ola believes it can improve things by increasing its sales network and in an audacious move, opened 3200 new experience centres on 25th December. This, in addition to the existing 800 centres, takes Ola’s customer contact points to around 4,000. Market leader Bajaj Auto has about 4100 dealerships.
Impact
Ola has bigger worries than volumes. The loss in market share is because of Bajaj Auto and TVS Motor steadily improving their products, pricing and gaining volumes as a result. At the same time, Ola has earned a bad reputation for its service issues and product niggles. A high volume developing market like India is driven by word of mouth than social media advertising. It seems that the negative word-of-mouth has caught upn with Ola’s sales and the slump is likely to be a long-term one.
No Tax Breaks for Electric Motorcycles in The Netherlands
The Dutch are no longer incentivising E2W purchases. Just a few days before the close of 2024, the Netherlands government announced in Staatscourant that the tax benefits for electric two-wheelers would no longer apply.
The removal of subsidies means that electric motorcycle prices may go up by as much as EUR 4500 making them an unviable purchase.
The Netherlands is not the biggest two-wheeler market in Europe. It’s not even the top ten in Europe. However, the small market, especially the city of Amsterdam, has been at the forefront of electric two-wheelers in Europe thanks to scooter-sharing services with operators like Check, Felyx, and GO Sharing. At one time, Amsterdam allowed slow-speed mopeds to use bicycle lanes.
Insight EV tracks more than 220 electric mobility players and the world’s most important 2W markets. Connect with us on X at @editor_ev