In the second episode of the Stefan Pierer interview we focus on sport, including hisviews on a new Dakar bike, motocross, the acquisition of Husqvarna and more…
Let’s talk about Dakar…is there a new bike coming?
Yes. We always wanted to make a lighter, slimmer and easier to handle motorcycle but with the same power. It is a single and still a 450 following the regulations but is a better handling rally bike. Our existing model was so successful for many years and originally we had the 600cc regulation. We were winning all the time so the promoter and Japanese pushed for the 450 and we put that engine inside the 600 chassis and we still won. However the chassis really is too big and heavy for that smaller engine, so we have done it like motocross with a nice bike that looks good and hopefully Marc Coma will bring it to the finish line first. Tests are already well underway and if you want to compete against Honda and Yamaha then you must get serious! After a long time and successful collaboration Cyril [Despres] went to Yamaha but on a very friendly base on both sides because he wanted a new challenge. He will get it for sure if he is now going up against KTM! Honda have also signed a very fast rider…it is not a club race any more.
In Motocross there was a rumour that you stood in the pits at a Grand Prix and said you wanted to destroy the rest of the field. In MX2 [250cc four-strokes] it is like that now with many KTMs all the way through the pack…
For sure you have a certain ambition and that is the racing attitude, you want to win, that’s all. If you can add on additional podiums and things like in dominating a class then that is very nice but first you want to win. In everything. That’s why for Superbike you have to meet that expectation of being able to succeed and as a small newcomer you can take certain risks and maybe not do well and it is fine, but we have a reputation where if KTM show up they take it seriously and go for the win; that is what KTM customers and fans expect.
You did well in road racing but then the economical crisis hit and you came back to the off-road core. Now you are firmly back in the MotoGP paddock with more expansion. What did you learn from the last episode to be stronger on multiple racing fronts again?
The biggest factors from the crisis were that we didn’t stop R&D and model development because to get out of a crisis you need new models and then you are not under pressure pricewise. If you go through that period with existing products then you just throw discounts, you lose margin and you are dead. We kept all the money aside to do this. We reduced racing activities and we stepped out of two-stroke 125 and 250 GP which saved a couple of million and we invested in new models. In off-road we tried to keep as much as we could but even there we cancelled some activities. As soon as the new bikes came through then the success began again and we soon became profitable once more. Immediately we were attacking. You cannot sit there and wait; it doesn’t get better that way. In very tough circumstances you can get the best market shares. One of the big success stories of KTM was that we were the fastest-moving, most aggressive and most ambitious motorcycle companies through the crisis and now we are harvesting that success. The Japanese were sitting and waiting. Honda moved a bit, Yamaha is a disaster and Kawasaki did a good job. Suzuki is disappearing from the market. They announced a return to MotoGP in 2015. It will be very expensive but in a way it makes sense because there is a heritage for them in the sport, however a young guy wont know so much about it.
What is your view on Supercross? It is a very visual and well-followed discipline so people can understand the investment. How important is it to KTM North American operations?
For many years I was not convinced that a huge investment would pay back, but after the crisis when we were influenced by the Americans and Pit [Beirer, Motorsport Director] was able to persuade Roger [De Coster, ex MX world champion and fabled team manager] to come to KTM we decided for Supercross. I have to say I am really positively surprised by the payback: incredible! Supercross is THE showcase in the States – no doubt – and that was another piece of learning for me. I was worried about too much money in that segment if it didn’t work out but with that professional set-up and team manager the success is coming. We have good riders and the States is one of our growing areas. Last year we did +20% and this year it is +15% already although the market is flat, and that growth is down to Supercross.
How about a racetrack, motocross track and museum in Mattighofen?
It would be nice! The KTM museum is on the way and the local village is supporting that idea heavily. They will provide land and investment and we will take care of the rent. The concept is already advanced. A motocross and enduro course for zero emission bikes is there and the other two things I have tried to produce for the past twenty years. It has been impossible and it is unbelievable how many arguments from neighbours have come up. It is a sad thing because we are employing – along with WP – almost 3000 people in that region. So many people are benefitting but we are not able to do a test at a track. On-road is a different thing and needs a big bit of land but a simple off-road track is impossible. It is a shame and for fifteen years I have been pushing. We even have 20 hectares of land set aside for it. The E-bike track was immediate but a normal track is much harder. For us it means a bottleneck for our R&D because they have to drive to Munich airport for their activities, otherwise it means extended sessions in Italy or Spain.
That must mean the business plan behind the E-bike is sound…!
Yes and it is interesting. As a combustion-engine-based off-road motorcycle firm you are an ‘outsider’ in the community, as soon as you are offering the same product – that even looks the same – but with an electric engine everybody loves you. Hunters are calling us so they can use it to get into their woods! Austrian Ski resorts want to make a track in their summer season…it is becoming their business. There are other parks interested and we will collect the information and begin production on the Freeride E next year.
Have you tried it?
Yes, not on our E-track in Munderfing but on a track close to my house that is in a military area and once a week the local club can run motocross sessions. I’m a four-stroke rider normally.
And on the road…?
Very little. I prefer four wheels on-road and that means the X-Bow.
What is the background to the Husqvarna deal and how did you feel about it?
Husqvarna was always the benchmark at the beginning. It was a competitor but one that was getting better year-by-year. In the mid-90s we took over Husaberg, which was a spin-off from the former Husqvarna engineers when they left the company as it moved down to Castiglioni and Cagiva. We got some experience and in 2003 we closed down the facility in Sweden and brought the operation done to Austria and it worked out very well. We were very impressed. Maybe Husaberg was partly the killer of Husqvarna because last year they sold 6000 units, more than Husqvarna for off-road because you have to discount some of their on-road models.
The experience with Husaberg as a second brand that was based on overlapping the main brand was useful and so was adapting the platform strategy from the car industry. In other words sharing engine and chassis components as much as possible. You don’t need addition R&D, purchasing and production. All is the same. After ten years I was 100% we could handle a second brand and then the possibility came up with Husqvarna.
Husaberg has one weakness. In Europe it is a brand and it is strong, but outside of the continent nobody really knows it. In the States it is unknown but that is not the same for Husqvarna. That brand brought the sport over to America and is one of the pioneers of motocross. It has a long history in the States and everywhere around the globe it is recognised. It is the second oldest motorcycle brand.
So the situation came at BMW where the company recognised they needed to focus with on-road through the crisis and they wanted rid of off-road. We always had a clear plan with what we would need to do and that would be to create a single brand so Husaberg will be merged and will disappear and Husqvarna will be the strong global brand for the future. With the platform we will redo some things on the Husaberg model and convert it to Husqvarna with the colours, graphics and technical improvements.
For motocross we will use the KTM platform and you will see at the 2013 EICMA show that we will have a very strong competition line from Enduro and every displacement for motocross, meaning 250, 350 and 450, two-stroke 125 and 250 and all the models that Husaberg had for Enduro. Including a bike with the 690 single cylinder. It is a perfect model line, so the dealer can survive in the off-road segment. That gives us the chance to have a second distribution line against the Japanese. Husqvarna is strong on a global base to be able to attack the Japanese or to lift the Europeans against the Japanese; that is the concept.
Can you understand why some people might think ‘well, how can KTM succeed where BMW couldn’t?’
We can because of twenty years experience in the off-road niche market and industry. It is a very specific one and you need experienced people: the former racer, the skilled and knowledgeable technicians. Every small detail with hard and consistent work creates the right product. Secondly you have to understand the off-road community. It is a closed community and if you are not part of it then you are making a mistake.
Italy as an industrial base is one of the most difficult aside from France in Europe, because of the labour regulations. They are 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 and that was the background with how I came to meet BMW. We have a close relationship because I appreciate BMW as a competitor and they are the closest in Europe. We have a big respect and different relationship. They were asking me if I was interested because they wanted to focus on on-road and 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 programme.
For us in Mattighofen that means 15,000 additional bikes based on the same platforms. It is like the car industry with Volkswagen and Seat, Audi, Skoda. In the market the brands are separate but behind there are synergies and that is the only way to survive on a small scale and in that competitive industry.
What about the two brands racing against each other?
For sure! Competition keeps you alive. Sometimes you have success over so many years and it can become saturated and you start to lose ground. I think a nice, steered amount of internal competition is good.
So if Husqvarna run the right technology what do you then do with the brand? Especially to differentiate it from the ‘Orange’?
You have to have the brand content separate to KTM. KTM is perhaps a bit more ‘to the edge’ a bit more race-orientated. Husqvarna will come out as more historic, more Scandinavian, a little bit smoother. The design, as you will see in the future, will be a bit softer than the KTMs. They are focussing on the Supermoto type for on-road. There are a lot of niches that Husqvarna can occupy and become a serious player again.