KTM has long stood out as one of Europe’s most recognizable motorcycle brands—especially if you’re into dirt bikes or MotoGP. But lately you might’ve heard rumors or seen headlines asking, “Is KTM going out of business?” With news swirling about debt, layoffs, and the company’s founder stepping down, it’s natural to wonder what’s really happening.
You don’t have to dig too deep to find a clear answer: No, KTM isn’t going out of business. However, the company did run into some serious challenges over the past year, and things got pretty tense for a while. Let’s break down what actually happened, what KTM did to patch up its finances, and what riders (and fans) can expect for the next couple of years.
KTM’s Rough Patch: A Debt Problem Comes to a Head
First, some context. By late 2024 and early 2025, KTM was in a bind. Their parent company, Pierer Mobility AG, had racked up about €1.87 billion in debt. That amount is huge by motorcycle industry standards. For months, the mood was anxious as reports of production stoppages, layoffs, and ballooning inventories made their way into the news.
At the time, banks and suppliers were getting jumpy. KTM found itself needing court protection from creditors—a process called “insolvency proceedings” in Europe. In plain English, that means the company formally admitted it couldn’t pay all its bills and needed time to figure out a solution.
Factories in Austria slowed to a crawl. Employees worried about their jobs. The stories in the business press started to get downright doom-filled.
What Pushed KTM to the Brink?
So, how did a brand with a loyal following and big sales end up in such a jam? It came down to some pretty basic problems: stockpiles of unsold motorcycles stacking up in warehouses, higher energy and labor costs (thanks in part to the COVID era), and tough financing conditions as interest rates shot up in Europe and beyond.
When you’re left holding hundreds of millions in extra motorcycles, that ties up a lot of cash. KTM couldn’t move those bikes fast enough, and the bills kept piling up. Eventually, the company had to admit it was stuck.
How KTM Worked Out a Deal with Its Creditors
Here’s where things start to turn around. In early 2025, KTM’s leadership hammered out a deal with its creditors. The plan was pretty simple but tough: lenders would agree to wipe out about 70% of KTM’s debt in exchange for a smaller cash payout right now. KTM promised to pay about 30 cents for every euro it owed. They had to come up with that money fast—before the court-imposed deadline.
To pull this off, KTM needed outside help and a solid cash infusion. That’s where the brand’s top shareholder jumped in.
Bajaj Auto Steps in as KTM’s Lifeline
KTM isn’t just an Austrian story. Behind the scenes, the majority stake in KTM is actually held by Bajaj Auto International Holdings BV—a subsidiary of Indian manufacturer Bajaj Auto. Bajaj holds about half of KTM, and they’re one of India’s biggest, wealthiest automakers.
When things got tight, Bajaj committed €600 million to help KTM out of its jam. They’d already supplied a previous €200 million as part of earlier bailouts. Bajaj’s new loan gave KTM enough cash to pay creditors and fund a restart of operations. It wasn’t just writing checks; it was investing in the company’s comeback.
The financial rescue deal was approved by creditors in late February 2025. By the end of May, the court confirmed that the key terms had been met and the insolvency process was officially wrapped up. This move put an immediate stop to any talk of liquidation or a KTM shutdown.
Production Restarts: Back to Work, But Not at 100%—Yet
Once KTM had the payments sorted, Bajaj kicked in another €50 million in fresh working capital. This let KTM turn the lights back on at its main Austrian plants in March 2025. The goal was to bring production up to full speed within about three months.
The restart wasn’t instant. It took some time for suppliers to ramp back up and workers to come back on the clock. But production lines in Mattighofen and other sites began spinning again. The message from KTM: We’re back, and we’re not closing down.
Inventory: KTM Tackles Its Bike Backlog
One of the company’s biggest headaches was simply having too many motorcycles sitting around unsold. At the end of 2024, KTM’s inventory was at 248,580 bikes—a record high. They needed to free up cash and cut those numbers fast.
As operations restarted, aggressive moves were made to clear out old inventory. By the middle of 2025, they’d brought that number down by well over 100,000 units. The inventory sat at about 147,427 bikes, much closer to normal levels for a company KTM’s size. This should help the company avoid similar crunches in the future.
Leadership Shakeup: Founder Steps Aside After Decades
Part of the turnaround meant taking a hard look at management. Stefan Pierer, who founded KTM and ran the company for decades, announced he was stepping down as CEO in early 2025. This wasn’t a total surprise. The end of COVID had brought higher costs, tough market conditions, and a rash of tricky decisions.
Pierer’s exit was meant to signal a new chapter and give investors more confidence. While he’s still around as a shareholder, day-to-day operations are now in the hands of new leadership, aiming for a more sustainable and streamlined approach.
KTM’s Go-Forward Plan: Where the Brand Sees Itself Next
So what’s the outlook for KTM, now that the worst seems to be over? They’re putting real focus on their bread-and-butter business: off-road motorcycles. KTM has a 40–60% share of that market worldwide, making them a top player in motocross and enduro racing.
Analysts expect the broader motorcycle market to grow about 3.5% a year through the late 2020s. If KTM can keep its costs down and inventories in check, there’s solid potential. Most of the company’s Austrian operations and jobs are staying put. The brand says it’s committed to stability and long-term growth.
The plan is to keep building high-performance dirt bikes and adventure machines at their Austrian factories, while leveraging partners in India and China to handle more basic or smaller-displacement models.
Saying Goodbye to MotoGP: A Costly Exit, but a Safer Bet
One of the more controversial changes is KTM’s planned exit from Grand Prix motorcycle racing after the 2025 season. That means no more KTM bikes in MotoGP, Moto2, or Moto3 starting in 2026. For fans, it’s bittersweet; for business, it’s a big money-saver.
Internal estimates show that pulling out of MotoGP will save KTM around €46–48 million each year. For a company fresh off insolvency, that was just too tempting to pass up. There was talk that Red Bull, a longtime sponsor, might bail out the racing program. But the company leadership and sponsor reps quickly shot down those rumors.
Contracts with riders like Brad Binder (signed through 2026) and race organizers will need to be sorted out, but so far, everyone seems on board with seeing out 2025. From 2026 on, KTM will focus its racing budgets on off-road and grassroots events instead.
KTM’s Signal: Still in Business and Planning for 2026
If you’re wondering if KTM is shutting down in the U.S. or elsewhere, the answer is: no way. KTM is actively promoting new financing deals for American buyers. For example, some models come with no payments or interest for 90 days, and fixed interest rates afterwards. That’s not the move of a company winding down.
Ownership is stable for now, with Bajaj’s sizeable resources in play—Bajaj is valued around $23.4 billion. There’s speculation about new investors (even BMW has been named), and a possible spin-off of KTM’s stake in MV Agusta. For regular buyers and fans, though, KTM’s “orange” brand will stay visible at dealerships and on the street.
You might want to check out related business recovery stories or resources: the folks over at SmallBizPoint often cover real-world turnarounds and funding moves, just like this one.
The last big court hearing was back in January 2025, and ever since, there’s been no sign of impending liquidation or closure. Instead, KTM is focusing on getting leaner, building bikes that sell, and working with steady backers.
The Bottom Line
KTM is not out of business. The company faced a scary period in 2024–2025, with real fears about its future. But after tough creditor negotiations, a major cash infusion from Bajaj, some tough cuts, and a change at the top, KTM is looking ahead.
They will stop racing MotoGP after next year—mostly to trim costs. But production is humming again, jobs in Austria are intact, and the brand is still a force in off-road motorcycles. For now, KTM’s “Ready to Race” slogan still rings true, though it has a much more down-to-earth meaning: get back to basics, learn from the close call, and stay on two wheels.
