Pierer Mobility, an Austrian bicycle and motorcycle provider listed on the SIX Swiss Exchange, is experiencing financial difficulties due to various factors. The company’s sales markets are facing challenges, and competition in Europe is becoming increasingly weaker. The bicycle industry is still grappling with the aftermath of the pandemic sales boom, with dealers sitting on large stocks of unsold bicycles and e-bikes. Last year, sales of bicycles and e-bikes in Switzerland fell, leading to intense price pressure and discounting in the industry.
Pierer Mobility has issued a profit warning for the second time in six months due to overstock inventory issues and significant price reductions. The company expects losses in the bicycle business in 2024 due to high levels of inventory and price reductions. However, the motorcycle market remains strong, with robust sales in Switzerland and other European markets.
Despite recent acquisitions of a fourth brand, Pierer Mobility is expected to have a balanced to slightly positive operating result in the motorcycle sector in 2024. This will not be enough to offset losses in the bicycle business. The company plans cost-cutting measures and job reductions to address profitability issues in Europe and tackle rising energy and wage costs on production.
To improve its financial performance, Pierer Mobility aims to focus more on Asia for assembling cheaper motorcycles while maintaining bicycle and e-bike assembly operations in Europe for higher-priced segments. The company intends to reduce inventory levels over the next twelve months while hoping for improvements in market conditions.
Although facing challenges, Pierer expressed optimism about its ability to navigate the evolving landscape of the industry.
