Stefan Pierer on why KTM can succeed where BMW failed

[blazes]

“First, we have 20 years experience in the offroad niche market. It is a very specific market and you need experienced people: former racers and skilled technicians. Every small detail must be pursued with hard and consistent work to create the right product.

“Second, the offroad community is a closed community and if you are not part of it then you are making a mistake.

“Third, Italy, as an industrial base, is one of the most difficult, aside from France, because of the labor regulations. Italy is not competitive any more. First of all you need to pay a lot of money to have a nice Italian company and brand. Then, you need to pay a lot of money to get rid of that company. That was the background situation when I came to meet with BMW.

“They asked if I was interested in Husqvarna because they wanted to focus on road bikes. I said ‘why not? Let’s sit together’. It was as simple as that. It sounds easy and it was easy. We are very excited now, especially when we think about the new model program. For KTM’s factory in Mattighofen, Austria, it means 15,000 additional bikes based on the same platforms. It is like the car industry with Volkswagen and Seat, Audi and Skoda. In the market place the brands are separate, but behind the scenes there are synergies. That is the only way to survive on a small scale and in a competitive industry.”

[alanB]

“First, we have 20 years experience in the offroad niche market. It is a very specific market and you need experienced people: former racers and skilled technicians. Every small detail must be pursued with hard and consistent work to create the right product.

BMW thought they could apply their road technical experience from cars and road bikes, and it would be enough.  It wasn't.

You need an active off road racing program to get the sort of experience to do this - but they clearly had no interest in off road racing.  Hence the confusion.

“Second, the offroad community is a closed community and if you are not part of it then you are making a mistake.

BMW never understood this point, they thought they could break in without having a racing history or any real interest in off road racing.  They did come up with one really interesting bike though - the 450 which had its problems, but its still quite revolutionary.  I often wonder if they outsourced its design, because its so atypical of BMW - anyone know?

The X range of bikes wasnt actually that bad either.  The X-Challenge is actually quite a good bike, once you sort out some of the sillier design decisions (like the air shock).  But BMW didnt understand that the type of person buying an X-Challenge is very different from their traditional GS market - and that's why the range failed IMO - they were trying to sell the range to the wrong people, and had no understanding of how to reach the true target market.

[Twister]

Very interesting sales figures 

Quoted from asphaltandrubber.com

[Brandt]

Very interesting sales figures 

Quoted from asphaltandrubber.com

Shoe!

Sent from my GT-I9300 using Tapatalk

[JustBendIt]

the future is ORANGE ...

[Brandt]

I hope they can make an SE again...

Sent from my GT-I9300 using Tapatalk

[Lord Knormoer]

Very interesting reading. What is more insightful is looking at 5 year and 10 year annual kpi's.

A further point to note is that KTM's biggest seller in 2013 was the 1190, a bike that competes in the DS market. It would be interesting to see how this develops in the long run.

When looking at BMW and KTM you have two radically different companies with one thing in common, their most popular model based on 2013 sales is the 1200 dual sport.

I personally think they are selling to completely different market segments and would be keen to see some factual comparative demographic analyses.

Go KTM, I love the fact that someone is pushing BMW. The competition will see both brands improve in an attempt to capture the market.

[Teapot]

I still want a KTM!

[wolf skaap]

I'm not supposed to comment in this forum but anyway..

Very interesting reading. What is more insightful is looking at 5 year and 10 year annual kpi's.

A further point to note is that KTM's biggest seller in 2013 was the 1190, a bike that competes in the DS market. It would be interesting to see how this develops in the long run.

When looking at BMW and KTM you have two radically different companies with one thing in common, their most popular model based on 2013 sales is the 1200 dual sport.

I personally think they are selling to completely different market segments and would be keen to see some factual comparative demographic analyses.

Go KTM, I love the fact that someone is pushing BMW. The competition will see both brands improve in an attempt to capture the market.

I guess sales figures are supposed to be important but no one on the Husky forum bought one based on their epic sales figures.

You make it sound as if we don't ride the bikes but rather just invest in them... like conceiving offspring without the added benefit of an orgasm.

[Lord Knormoer]

I'm not supposed to comment in this forum but anyway..

Very interesting reading. What is more insightful is looking at 5 year and 10 year annual kpi's.

A further point to note is that KTM's biggest seller in 2013 was the 1190, a bike that competes in the DS market. It would be interesting to see how this develops in the long run.

When looking at BMW and KTM you have two radically different companies with one thing in common, their most popular model based on 2013 sales is the 1200 dual sport.

I personally think they are selling to completely different market segments and would be keen to see some factual comparative demographic analyses.

Go KTM, I love the fact that someone is pushing BMW. The competition will see both brands improve in an attempt to capture the market.

I guess sales figures are supposed to be important but no one on the Husky forum bought one based on their epic sales figures.

You make it sound as if we don't ride the bikes but rather just invest in them... like conceiving offspring without the added benefit of an orgasm.

And very important to note that their epic sales has very little to do with the sales of Husky's.

My point is firstly that the figures are incredible and have doubled since 2008. However, they are a company with stakeholders like investors and employees who all expect increases and returns based on the growth. This erodes profit which requires yet higher sales volumes the following year. This requires expansion, expansion costs money etc. Growing is easy, make a great product, it will sell. Sustaining profitability is much more difficult and many companies with great products no longer exist because of that.

Second point, they are obviously doing something right given the figures but need to prove that can be sustained for longer than just 5 years or they may one day be acquired by another brand.

Third point, the racing community is too small to sustain them. Most DS riders doesn't care about the pedigree. Building bikes like the 1190 makes money. They will need more of this going forward.

Last point, sustained positive growth figures are critically important. Without sustained sales and profitability, KTM will be unable to continue R&D and racing programs which is the very foundation of their success.

In summary, a great product alone will not see you survive a hundred years, even if the riding experience is orgasmic.

[BiG DoM]

I'm not supposed to comment in this forum but anyway..

Very interesting reading. What is more insightful is looking at 5 year and 10 year annual kpi's.

A further point to note is that KTM's biggest seller in 2013 was the 1190, a bike that competes in the DS market. It would be interesting to see how this develops in the long run.

When looking at BMW and KTM you have two radically different companies with one thing in common, their most popular model based on 2013 sales is the 1200 dual sport.

I personally think they are selling to completely different market segments and would be keen to see some factual comparative demographic analyses.

Go KTM, I love the fact that someone is pushing BMW. The competition will see both brands improve in an attempt to capture the market.

I guess sales figures are supposed to be important but no one on the Husky forum bought one based on their epic sales figures.

You make it sound as if we don't ride the bikes but rather just invest in them... like conceiving offspring without the added benefit of an orgasm.

No one buys an exotic bike due to sales figures ... it is motivated elsewhere in the genes. 

[alanB]

Worrying about sales figures of your bike relative to other brands is only important if you:

1) Need to feel you ride a popular bike/brand (some people seem to like that?)
2) Have financed your bike and need  to re-sell it at a high price (so the bike needs to be popular and thus easy to re-sell) - this is a problem on a dirt bike IMO because dirt bikes take quite a hammering if you ride them properly and thus lose value faster than some shiny road bike that's "only ever been to the shops and back"  
3) Need to feel secure that the company will survive to give you after sales service and parts.
4) Need lots of after market parts and want to know that the after market guys will support your bike.

But lots of small companies with low sales figures make great bikes with many happy clients, and have been doing so for some time such as:
1) Beta
2) Sherco
3) Gas Gas
4) Apprillia
etc

So maybe sales figures aren't the be all?

The nice thing for Husky now IMO is that we are now part of quite a big group so we don't have to worry about the brand being shut down (as we did under BMW who seemed on a path to oblivion for the brand), in addition we now are part of a group who understand off road racing and riding (again as opposed to BMW who didn't).  And who clearly intend to invest quite heavily in development and growth of the brand in that market.

So its all good IMO, we have the best of both worlds in a way    

The reason that that the 1190 is doing so well IMO, is that KTM have realised the bigger market is not in the hardcore of road riding sector, but in the "Adventure Tourer" sector where many people just want the high speed on tar, comfort, all the electronic gizmo's etc but maybe will never actually ride anything technical, although a small proportion might (same as the SUV vs hardcore 4x4 cars - far more money to made selling high tech SUV's).  That's the market that BMW understand very well and have been making a fortune out of for years.  KTM have used their offroad and track experience to break further into that market by providing a bike that REALLY delvers being great on tar, and still very good (by all accounts) off road!  

[Lord Knormoer]

The reason that that the 1190 is doing so well IMO, is that KTM have realised the bigger market is not in the hardcore of road riding sector, but in the "Adventure Tourer" sector where many people just want the high speed on tar, comfort, all the electronic gizmo's etc but maybe will never actually ride anything technical, although a small proportion might (same as the SUV vs hardcore 4x4 cars - far more money to made selling high tech SUV's).  That's the market that BMW understand very well and have been making a fortune out of for years.  KTM have used their offroad and track experience to break further into that market by providing a bike that REALLY delvers being great on tar, and still very good (by all accounts) off road!  

Could not agree more and let's hope the trend continues.

Understand that I actually like KTM, I am not trying to bash the brand. The reason I am looking at the figures is it tells me where the company is going and what is most important for them. Smaller brands that have been around for long limit production and remain niche. KTM is not that anymore and the mere fact that this thread starts off with KTM comparing themselves to BMW should be enough evidence of that.

This has become a race between two large corporates who needs to grow market share, revenue and profit. KTM sold more than BMW in 2013. Normally when the executives in charge start focussing more on commercial gain than product relevance, the company loses the unique character which made them great in the first place. The result in some cases is that the company goes under and disappears completely. Some great companies reinvent themselves and stay relevant. I think KTM is managing a great balance between all the important drivers but it will become increasingly difficult if they continue to measure their performance against the likes of BMW.

No matter how good the product, if the company disappears, so does the product.

[BiG DoM]

Worrying about sales figures of your bike relative to other brands is only important if you:

1) Need to feel you ride a popular bike/brand (some people seem to like that?)
2) Have financed your bike and need  to re-sell it at a high price (so the bike needs to be popular and thus easy to re-sell) - this is a problem on a dirt bike IMO because dirt bikes take quite a hammering if you ride them properly and thus lose value faster than some shiny road bike that's "only ever been to the shops and back"  
3) Need to feel secure that the company will survive to give you after sales service and parts.
4) Need lots of after market parts and want to know that the after market guys will support your bike.

But lots of small companies with low sales figures make great bikes with many happy clients, and have been doing so for some time such as:

1) HUSQVARNA
2) Beta
3) Sherco
4) Gas Gas
5) Aprillia
etc

So maybe sales figures aren't the be all?

The nice thing for Husky now IMO is that we are now part of quite a big group so we don't have to worry about the brand being shut down (as we did under BMW who seemed on a path to oblivion for the brand), in addition we now are part of a group who understand off road racing and riding (again as opposed to BMW who didn't).  And who clearly intend to invest quite heavily in development and growth of the brand in that market.

So its all good IMO, we have the best of both worlds in a way    

The reason that that the 1190 is doing so well IMO, is that KTM have realised the bigger market is not in the hardcore of road riding sector, but in the "Adventure Tourer" sector where many people just want the high speed on tar, comfort, all the electronic gizmo's etc but maybe will never actually ride anything technical, although a small proportion might (same as the SUV vs hardcore 4x4 cars - far more money to made selling high tech SUV's).  That's the market that BMW understand very well and have been making a fortune out of for years.  KTM have used their offroad and track experience to break further into that market by providing a bike that REALLY delvers being great on tar, and still very good (by all accounts) off road!  

I AGREE TOTALLY BUT HAVE JUST DONE A SMALL EDIT  

[sidetrack]

Normally when the executives in charge start focussing more on commercial gain than product relevance, the company loses the unique character which made them great in the first place. The result in some cases is that the company goes under and disappears completely. Some great companies reinvent themselves and stay relevant. I think KTM is managing a great balance between all the important drivers but it will become increasingly difficult if they continue to measure their performance against the likes of BMW.

No matter how good the product, if the company disappears, so does the product.

True, secretly I hoped another Italian firm could have taken over Husqvarna. We would have had a better chance of seeing an updated 610/630 than with KTM. If we are lucky KTM will only re brand the 690 as a Husky ? What is the point to ride a white and yellow 690. For me the Italians are the only ones that will build a bike that they want to build not for economical reasons but for pure enjoyment of riding two wheels. It will never sell big or fit in with the mainstream crowd but it will be something that is now lost ........ being unique and special. KTM also shrugged off this trait when they shut down the Husaberg line.

[alanB]

Could not agree more and let's hope the trend continues.

Understand that I actually like KTM, I am not trying to bash the brand. The reason I am looking at the figures is it tells me where the company is going and what is most important for them. Smaller brands that have been around for long limit production and remain niche. KTM is not that anymore and the mere fact that this thread starts off with KTM comparing themselves to BMW should be enough evidence of that.

This has become a race between two large corporates who needs to grow market share, revenue and profit. KTM sold more than BMW in 2013. Normally when the executives in charge start focussing more on commercial gain than product relevance, the company loses the unique character which made them great in the first place. The result in some cases is that the company goes under and disappears completely. Some great companies reinvent themselves and stay relevant. I think KTM is managing a great balance between all the important drivers but it will become increasingly difficult if they continue to measure their performance against the likes of BMW.

No matter how good the product, if the company disappears, so does the product.

I dont think we have to worry abouy KTM disappearing  

They have cemented their position in the proper offroad sector and are now breaking into the "Adventure Touring" sector, and have been doing so for some time in fact with the 990's etc.  They dont need to dominate that sector, just share in some of the higher profits - which is what they are doing.  If anyone should be worried its BMW, because the sector they used to dominate is being successfully penetrated by a smaller player, as well as many others (Yamaha particularly).

The thing BMW should really worry about - only in my opinion of course - is their lack of racing background.  Why KTM will always be able to provide bikes that really deliver the goods offroad, is their racing sections (offroad as well as track) which is a steady source of design and experience which can be filtered into the more "sedate" market sectors with good results.  BMW have great road racing technology but dont have any interest in offroad racing.  So their bikes will never perform as well offroad IMO.  BMW have a very strong brand with a very loyal following - but their DS bike designs are ageing and there is only so much you can do with electronics.  

30 years ago when they raced the Dakar, they had that, but now they don't.  Their bike designs have evolved very little since.  That's the problem.

They need the constant innovation/improvement that comes from a racing environment.  They are banking on their customers not going offroad that much.  Time will tel if that's good assumption?  Their eroding market share in the sector they dominate seems to illustrate the point to me.

Please dont get me wrong I'm not bashing the BMW brand - its a very great company that really understand its market well and who deliver quality products and the best service around (apart from their suspension which always seems to be under-spec'ed  ).

[alanB]

Normally when the executives in charge start focussing more on commercial gain than product relevance, the company loses the unique character which made them great in the first place. The result in some cases is that the company goes under and disappears completely. Some great companies reinvent themselves and stay relevant. I think KTM is managing a great balance between all the important drivers but it will become increasingly difficult if they continue to measure their performance against the likes of BMW.

No matter how good the product, if the company disappears, so does the product.

True, secretly I hoped another Italian firm could have taken over Husqvarna. We would have had a better chance of seeing an updated 610/630 than with KTM. If we are lucky KTM will only re brand the 690 as a Husky ? What is the point to ride a white and yellow 690. For me the Italians are the only ones that will build a bike that they want to build not for economical reasons but for pure enjoyment of riding two wheels. It will never sell big or fit in with the mainstream crowd but it will be something that is now lost ........ being unique and special. KTM also shrugged off this trait when they shut down the Husaberg line.

There is a lot of truth in what you say!

Look at all the good smaller brands that have been around a long time they're either Italian or Spanish. (Sherco, Beta, Gas Gas, Aprillia etc).

And only the Italians seem to understand how to take a piece of machinery and make it sexy!

But I'm holding thumbs on a non 690 based upgrade to the 610 from Husky - maybe we should start sending KTM emails - they might listen to their new customers?

[blazes]

Normally when the executives in charge start focussing more on commercial gain than product relevance, the company loses the unique character which made them great in the first place. The result in some cases is that the company goes under and disappears completely. Some great companies reinvent themselves and stay relevant. I think KTM is managing a great balance between all the important drivers but it will become increasingly difficult if they continue to measure their performance against the likes of BMW.

No matter how good the product, if the company disappears, so does the product.

True, secretly I hoped another Italian firm could have taken over Husqvarna. We would have had a better chance of seeing an updated 610/630 than with KTM. If we are lucky KTM will only re brand the 690 as a Husky ? What is the point to ride a white and yellow 690. For me the Italians are the only ones that will build a bike that they want to build not for economical reasons but for pure enjoyment of riding two wheels. It will never sell big or fit in with the mainstream crowd but it will be something that is now lost ........ being unique and special. KTM also shrugged off this trait when they shut down the Husaberg line.

There is a lot of truth in what you say!

Look at all the good smaller brands that have been around a long time they're either Italian or Spanish. (Sherco, Beta, Gas Gas, Aprillia etc).

And only the Italians seem to understand how to take a piece of machinery and make it sexy!

But I'm holding thumbs on a non 690 based upgrade to the 610 from Husky - maybe we should start sending KTM emails - they might listen to their new customers?

Go for it ---   Stefan.Pierer@ktm.com, michael.winter@ktm.com,

[Teapot]

Will KTM bring out the 990 again or that rumored 800?

[alanB]

Go for it ---   Stefan.Pierer@ktm.com, michael.winter@ktm.com,

Thanks, I think I will 

Probably go straight into his delete folder without him ever seeing it but do you stand to loose?

I'll put together something tonight.