BikeBiz Bicycle and cycling retail news
Pierer Mobility, the parent company of Pierer New Mobility and e-bike brands GasGas and Husqvarna, is predicting a ‘significant’ downturn in the performance of its bicycle sector for 2024.
In its adjusted guidance for the 2024 financial year, the company’s executive board anticipates a negative EBIT of € -110 to € -130 million in its bicycle division. This equates to a 15% decline in sales.
A spokesperson for Pierer Mobility commented: “During the coronavirus pandemic, demand for bicycles rose rapidly, leading to overheating in the bicycle market and disruptions throughout the entire supply chain. As a result, our own stocks and those of suppliers and dealers reached record levels.
“The reduction of these inventories to a normal level is continuing, while at the same time massive pressure is being exerted on sales prices.
“Due to these developments, the extraordinary impairment and restructuring requirements in 2024 will lead to a significantly negative result in the bicycles segment.”
Motorcycle market also facing significant barriers
Pierer is best-known for its brands in the motorcycle market as the parent company for KTM, GasGas, Husqvarna, MV Augusta and WP suspension.
This division is also seeing a downward trend with a decline in sales of 10% expected.
In the current financial year,
According to Pierer, momentum in core motorcycle markets in the USA and Europe has slowed significantly in the current financial year.
Due to the latest interest rate decisions in the USA, interest rates are expected to remain high, which will have a negative impact on sales expectations for the American market. Sales figures in Europe are also still volatile.
Overall, Pierer Mobility’s sales figures will fall short of expectations this year after three years of above-average success.
This means that dealers will have to reduce their inventories and thus continue to tie up considerable capital.
Together with extended payment terms and higher discounts this is expected to have a significant negative impact on EBIT and the financial result in the current financial year.
Group level reorganisation
December of 2023 saw the group reporting that unfavourable economic conditions in Europe had led to a decision to relocate parts of production for individual mid-range models and certain R&D activities to strategic partner Bajaj Auto, India, and CFMOTO, China.
Among other things, this was intended to utilise cost advantages in these regions and accelerate development and industrialisation processes.
This strategic decision was associated with a necessary reduction in staff of up to 300 employees at the Austrian locations in 2024.
The business reported that it expected the global economic environment to be difficult in the 2024 financial year, emphasising that, for Pierer Mobility Group, 2024 will be “a year of consolidation” which will be used to strengthen the core business.
This news coincided with the board of directors initiating the sale of the Raymon and Felt brands and the divestment of the non-e-bike division.
In order to secure the group’s profitability, the management implemented cost-cutting measures in the double-digit million range in the 2024 financial year.
