KTM Passes Harley Davidson as World's Top Motorcycle Seller

In 1991, Stefan Pierer took over KTM, a failing Austrian manufacturer of motorcycles trying to counter aggressive rivals from Japan. A no-nonsense turnaround expert who at age 35 had already revived and auctioned off makers of ski boots and building materials, Pierer figured he’d spend a few years fixing KTM before moving on to the next challenge. Fast forward 28 years, and KTM is building as many bikes in a week as it did in the whole year when Pierer took over. It just surpassed Harley-Davidson Inc. as the leading motorcycle maker outside of Asia. And Pierer is still in charge, with a fortune valued at more than $1 billion thanks to his success at KTM. “The quality at the time was so poor we were mocked,” he says. “But every crisis is also an opportunity.”

KTM is now gunning to become one of the top three manufacturers of full-size motorcycles. In the past decade, Pierer has more than quadrupled sales even as the European market for two-wheelers shrank 14%. He says new designs and a greater focus on Asia will help him reach annual sales of 400,000 by 2022, which would put him within striking distance of today’s No. 3, Kawasaki Motors Co.

Still, by many measures KTM remains a bit player. Although last year it sold 261,000 bikes—35,000 more than Harley did—the American company generates three times KTM’s revenue of $1.75 billion, because most of its bikes are far more expensive. Including smaller models such as mopeds and scooters, KTM is still behind Piaggio Group (the maker of Vespa) in Europe. And globally it’s an also-ran. Honda Motor Co., for instance, sold 20 million two-wheelers last year, and No. 2 Yamaha Motor Co. sold 5.4 million. Being based in Europe presents assorted challenges: Sales in the region have stagnated since 2010, at about 1 million bikes per year, and stricter rules on emissions and noise threaten to further depress them. “Making motorbikes cleaner and quieter costs a lot of money, and so does developing electric engines,” says Jürgen Pieper, an analyst at Bankhaus Metzler in Frankfurt. “A brand like KTM that’s known for sports and racing may find it difficult to maintain its image while adopting more environment-friendly technologies.”

KTM dominates Mattighofen, the town of 6,000 just south of the German border where it was founded in 1934. As Austria emerged from the rubble of World War II, KTM churned out inexpensive, durable two-wheelers to help a broken nation hit the road again. Over the next four decades, founder Hans Trunkenpolz and his son Erich built KTM into a national icon with bikes suited to Austria’s rugged Alpine terrain. But when Erich died on Christmas Eve in 1989 at age 57 with no heirs, the company ended up in the hands of outside investors with little industry knowledge who soon rode it into insolvency.

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