Pierer Mobility Group Ditches Four Executives As Troubles Deepen

The Pierer Mobility Group will downsize from six to two executives due to expectations not being met, which has resulted in increased debt and interest expenses.

The reduction from six executives to two signifies a downsizing of two-thirds, with CEO Stefan Pierer and Co-CEO Gottfried Neumeister being the only members retained.

The biggest name to become a victim of the executive cut is Hubert Trunkenpolz, who represents the T in KTM. Trunkenpolz had been on the executive board since 2018 and just last year was made chairman of the board. Trunkenpolz is the grandson of Hans Trunkenpolz, the founder of KTM and Hubert is also a member of KTM’s Shanghai Moto Co. LTD supervisory board.

The reason for the reduction in size is the continued financial struggles of the Pierer Mobility Group. The Austrian firm cites a high cost of living in the United States and a recession in Germany as some of the causes.

“The European economy is stagnating, with the important German market in particular in recession,” a Pierer Mobility Group statement said.

“In the USA, consumer purchasing power remains low due to the high cost of living and the long period of expensive consumer credit.”

The PMG statement adds that it has experienced a substantial decline in registrations in the US - is down 6.3 per cent in the period from January - September 2024.

It also goes on to state that September has been its worst month for registration growth in the US since January of this year, with an alarming decline of 14.3 per cent. Pierer Mobility Group claims “rapid recovery cannot be expected.”

The European picture is not as worrying for PMG as registrations are at a similar level to last year, however, it does say that this is down to “increases in the low-price segment”. They do show a slowdown in momentum though.

The downsizing also comes after an announcement earlier this year where PMG confirmed more planned growth in non-European markets through industrial partners Bajaj Auto (India) and CF Moto (China). A reduction in staff and production volumes in Europe was confirmed at the time of that announcement.

The statement adds: “Despite the slight reduction in inventories, further destocking remains an important objective.”

“Pierer Mobility remains clearly committed to supporting dealers and suppliers as a strategic partner in these difficult times. As a result of measures taken in this regard, working capital and consequently the company's net debt and interest expenses increased.”

Due to the worrying circumstances, PMG has landed itself in, it confirmed that it is also revoking its 2024 guidance.

The statement concludes: “As a result of these circumstances Pierer Mobility will fall short of expectations in terms of revenue and earnings, as well as with regard to the reduction in working capital and net debt in the current financial year, and is revoking its guidance for the 2024 financial year.”

“A new review of non-cash value adjustments will also be carried out by the end of the year.”

The other three members to lose their roles as executives include Alex Pierer, Florian Kecht and Rudolf Wiesbeck.