Pierer Mobility AG has announced an agreement to sell Felt Bicycle, which it acquired in 2021, to a consortium led by the current manager. The Austrian motorcycle and e-bike company has also agreed to sell its e-bike brand, Raymon, to its founders, Susanne and Felix Puello. This move allows Pierer Mobility to focus on its core business of powered two-wheelers, including the KTM, GASGAS, and Husqvarna brands.
Challenges in Motorcycle Business Operations
Currently, the bicycle and e-bike industries are facing challenges with declining sales. While there is a good demand for electric motorcycles, increased interest rates have led to a significant rise in inventory costs for motorcycle business dealers. Pierer Mobility is strengthening its dealer structure by extending payment terms and offering higher discounts. The company’s ample liquidity reserves not only support its dealers but also aid its suppliers, mitigating the substantial financial burden resulting from the rise in interest rates and improving its liquidity position.
However, these measures will ultimately lead to a significant reduction in the group’s total assets, resulting in an increase in the group’s equity ratio. The negative impact on the company’s cash flow for the fiscal year 2023 is consciously accepted. The adjustments in the bicycle business for 2023 will have a significant adverse impact on overall performance.
Financial Restructuring
In the future, Pierer Mobility AG’s e-bike activities will be promoted and expanded under the Husqvarna and GasGas brands. According to the company’s statement, Pierer aims to further strengthen its presence in the electric vehicle sector. Therefore, the company’s segment reporting will be restructured from the fiscal year 2024 onwards. The listed company will report under the categories “Motorcycles” and “Electric Vehicles” for the two-wheeler and electric vehicle segments. Apart from e-bikes, the “Electric Vehicles” category will include all electric two-wheelers, such as electric motorcycles, electric minibikes, and electric scooters.
Austrian Layoffs and Production Relocation
Due to unfavorable economic conditions in Europe, Pierer Mobility has also decided to transfer some production and research activities for specific mid-range models to Bajaj Auto in India and CFMoto in China. The company plans to leverage the cost advantages in these regions to expedite the development and industrialization processes. As a result, Austrian Pierer Mobility will undergo workforce reductions in 2024, affecting around 300 employees.
Pierer Mobility AG anticipates a challenging global economic environment in 2024. Therefore, the Austrian company will undergo a restructuring in 2024 to “strengthen core business.” To ensure the group’s profitability, management will implement cost-cutting measures of several million in the fiscal year 2024.
Pierer Mobility also announced that they have agreed to a call option to acquire the majority stake in the Italian motorcycle manufacturer MV Agusta Motor through its KTM subsidiary. They acquired a 25.1% stake in MV Agusta Motor in November 2022 and took over its supply chain and procurement in October 2023. The call option will be exercised in the spring of 2026, according to the annual financial statements ending December 31, 2025.
