The motor and bicycle manufacturer Pierer Mobility is brimming with self-confidence. He believes that he will be able to snatch market share from the competition in 2023 as well.
Pierer Mobility has also made a name for itself in motor sports with the brands KTM and Husqvarna.
A certain disillusionment has set in over the past few months in the two-wheeler industry. The warehouses of many motor and bicycle dealers are full after large deliveries have arrived at unplanned short intervals. Many delivery bottlenecks suddenly disappeared in the fourth quarter of last year. At the same time, the uncertainty among consumers increased significantly due to the sharp rise in prices. Many consumers came to the conclusion that they should hold off on major purchases for the time being.
Impressive sales growth of 19 percent
Against this background, it is all the more astonishing that the Austrian motor and bicycle manufacturer Pierer Mobility, which is listed on the SIX Swiss Exchange, once again expects a robust increase in sales in the current year. According to estimates by the group management, it should be between 6 and 10 percent. In the financial year just ended, the company, which sells motorcycles under the brand names KTM, Gasgas and Husqvarna and owns the Felt brand in the bicycle market, achieved impressive growth of 19 percent.
Hubert Trunkenpolz, Member of the Executive Board of Pierer Mobility.
“We are cautious, but not anxious,” says Hubert Trunkenpolz, who is responsible for sales, marketing, customer service and the joint ventures of the company within the four-strong group management. At most, a slight recession is expected. And one is sure to outperform the market as a whole, adds the manager confidently.
Founded in 1934 as a tinsmith, the company relies on its well-established brands and the global presence it has built over the years. Trunkenpolz points out that Pierer is the largest European two-wheeler supplier in the US market with sales of over 1 billion euros. According to the preliminary business figures published by the company on Tuesday, the company’s global revenues will reach around 2.4 billion euros in 2022.
A lot of money for research and development
In the past five years, Pierer has increased sales by an average of 10 percent annually. How do you do that? According to Trunkenpolz, who is the nephew of the company founder Hans Trunkenpolz, the company’s recipe for success consists not only of strong branding but also of lively research activity. He calculates that around 10 percent of sales are invested in research and development each year. «So we have good modern products».
Pierer considers himself a pioneer in the development of motorcycles with electric motors. A first product was launched ten years ago and the company is still working intensively in this field. At the same time, however, Trunkenpolz makes it clear that motorcyclists cannot be forced to opt for electromobility. The company intends to continue using internal combustion engines for part of its product range, also because the space available for batteries in motorcycles is much more limited than in cars. Synthetic fuels are an important topic for Pierer.
However, the company, which now has over 5,200 employees, has also grown strongly thanks to acquisitions. The KTM brand (the acronym also includes the family name Trunkenpolz) dates back to the company’s founding years, but brands such as Husqvarna and Gasgas, which are now used not only for motorcycles but also for e-bikes, came later as part of acquisitions. The bike brand Felt followed at the end of 2021. Pierer took it over from the sporting goods manufacturer Rossignol.
Big plans with MV Agusta
Just two months ago, the group also announced that it would take a 25.1 percent stake in the Italian motorcycle supplier MV Agusta as part of a capital increase. This means you have bought into one of the most valuable motorcycle brands, says Trunkenpolz.
After this shopping spree, there should be an end to acquisitions for the time being. “We are currently not actively looking for any further takeover objects,” emphasizes Trunkenpolz. The company has its hands full with new developments for the booming e-bike market. In addition, one wants to deepen the cooperation with MV Agusta. “It should become a profitable partnership.” As part of the acquisition of the stake, Pierer also announced that he would take over purchasing and procurement of goods for the company from Varese in the future. They also want to work together in parts of sales.
Pierer’s brisk pace of expansion has not gone unnoticed by investors. Up until a year ago, the share price had risen to almost 100 francs, almost doubling compared to the closing price on the first trading day in November 2016. The price is now still around 70 francs, but has been showing a clear upward trend since last October, when it weakened to a good 50 francs. Trunkenpolz says that Pierer has never regretted going public in Switzerland. One likes to believe him.