KTM's MotoGP future increasingly uncertain

A few weeks ago, KTM announced that it was launching procedures to avoid insolvency. In the midst of a crisis for several months, the situation did not seem to be improving. This is why the group decided to resort to these emergency measures.

In debt of several billion euros, the company has notably stopped paying its salaries, stopped its production until 2025, and started a process of laying off hundreds of people. Several of its subsidiaries have been declared bankrupt, although this does not concern the competition for the moment.

According to the brand's statements, it seems that the situation is improving. Shortly before the holidays, the Pierer Mobility AG group assured that it was in discussions with potential investors. In its press release, the brand states that these are both existing partners and new investors.

"The aim of the investment process is for investors to obtain a necessary capital increase in cash. Subscribe to the financial instruments of Pierer Mobility AG. This liquidity is to be used to strengthen the Pierer Mobility Group, in particular KTM AG."

Decisions should then be taken by a general assembly, in order to conclude the process. While in Austria, Pedro Acosta, who will ride for the official KTM team next year, took a tour of the company's headquarters. Following a meeting with the brand's management, the Spaniard said he was relieved, a sign that things are going in the right direction.

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An ultimately uncertain future in MotoGP?

A report published by the creditors' association, AKV Europe, however suggests otherwise. The insolvency hearing report announced much less encouraging measures for KTM's competition programs.

"To reduce costs, the abandonment of MotoGP Moto3/Moto2 is planned. In order to reduce production costs, the possibilities of a (partial) transfer of production are being examined. A production shutdown is to take place until the end of the restructuring plan status.

Not very encouraging news, then. However, we will have to wait until the end of January to find out more. "Creditors can still file their claims with the insolvency court via the AKV until the end of the reporting period on 16/01/2025. The next statutes will take place on 24/01/2025."

The question of KTM's withdrawal from MotoGP, however, arises in the longer term. Under contract with Dorna until the end of 2026, if KTM left MotoGP before the end of the latter, which Suzuki did in 2022, it would have to pay heavy financial penalties. It is therefore possible that it would be more sustainable for the brand to continue in the discipline, while reducing its budget.