KTM Rumored to Buy Financially-Challenged Gas Gas

Gas Gas bike in action 1 photo
Photo: Gas Gas
The latest rumor in the motorcycle industry sees Austrian maker KTM allegedly interested in buying Gas Gas, a Spanish bike manufacturer which has been not faring too well in the last year or so. At the beginning of February we reported once more on the financial troubles Spanish manufacturer Gas Gas was struggling with. Production had come to a halt, with some 500 workers remaining in standby and expecting CEO Yariv Gilat to find a way to solve the company’s lack of liquidities.
Silence fell over Gas Gas’ production line, as the company stopped manufacturing both bikes and spares, and even shutting off its R&D department temporarily. Gilat was trying to source some 24 million Euros ($27.4 million) to get things going, but so far the company is kept alive by governmental help, and we all know this can’t last forever. Gilat was confident that February might bring a deal with an investor.

Is KTM buying one more off-road bike company?

If the rumors turn out to be true, Gas Gas is the third European manufacturer of off-road motorcycles which arrives under the KTM umbrella, with the other two being Husaberg and Husqvarna. While most people feared that KTM will in fact kill Husqvarna to avoid cannibalizing its own products, CEO Stefan Pierer knew better.

Massive investments and smart positioning in the off-road market led to a stellar year for Husky, which sold around 50% more bikes in 2014 than it did in 2012, the last full year under BMW ownership. 2013 is left out of this comparison because it was a really tumultuous year with the company changing hands and all.

Past efforts to add more lucrative efficiency to Gas Gas saw a joint operation with Spanish maker Ossa, bringing the production in a single facility, but it looks like this was not enough. If KTM steps into the game, the future might look much brighter for Gas Gas, as they will also benefit from KTM’s dealer network integration and infusing their bikes with whatever there is to learn from the other three brands should also boost performance.

Anyway, until we get firm news from Gas Gas or even KTM, we’re still deep in rumor territory. Something tells us that accountants and lawyers in Mattighofen are rather busy these days. Or is it just the spring wind?
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