KTM’s global unsold inventory reaches 265,000 units

Accumulation of unsold inventory for a year is due to poor management decisions and wrong production calculations

Team Orange is experiencing something of a crisis around the world. The company has also filed for bankruptcy. It is estimated that KTM is saddled with about $3 billion in debt and is in poor shape. The company has announced that it will temporarily suspend production in January and February 2025.

The move affects up to 1,000 workers. There are reports that KTM did not pay workers their December wages and Christmas bonuses. Now, a recent report suggests that the temporary production shutdown may be due to unsold inventory of up to 265,000 units.

KTM unsold inventory

Amid all the negative developments for KTM, a recent report brought to light one issue. According to German publication Der Standard, KTM did not sell many motorcycles last year. The number of unsold vehicles in KTM’s inventory is as high as 265,000.

The figure was presented during a KTM bankruptcy hearing attended by a bankruptcy judge, creditors and stakeholders. According to the arguing attorneys, most of KTM’s problems that led to the company’s bankruptcy were due to poor decisions made by the company’s management.

Some of the decisions made by company management also involve overproduction. This resulted in KTM’s unsold inventory increasing by 265,000 units. Taken together, KTM’s annual sales are approximately 265,000 units. So, it’s fair to say that KTM has an entire year’s worth of manufacturing inventory that it can’t sell.

The report also mentioned that KTM’s fate now depends on the influx of external investors. The most likely among them is Bajaj Auto, an Indian 2W and 3W manufacturer. According to reports, the lawyers’ arguments mainly focus on KTM CEO Stefan Pierer and its common parent company Pierer Mobility AG.

What went wrong?

Although the unsold inventory has reached 265,000 units, there is some speculation as to why this happened. However, this was clearly the result of poor management and miscalculation of output. When the first signs of overproduction appear, the company should probably revise its production strategy.

KTM has been facing slow sales for some time now and demand is slowly disappearing. Despite this, KTM continues to maintain the same production scale as last year. This results in excess unsold inventory. It is estimated that liquidity requirements for excess inventory storage costs alone are approximately $460 million.

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