I think we can start now. Good morning, good afternoon, and good evening, everyone, and thank you for joining today's call. Yesterday evening, coordinated by the NGO Climate Whistleblowers, 10 European media outlets simultaneously published a joint investigation alleging that KTM systematically places illegal motorcycles on public roads. In the course of this call, we would like to comment on this to you. Speakers of today's call are Gottfried Neumeister, CEO of Bajaj Mobility AG and KTM AG, as well as Petra Preining, CFO of Bajaj Mobility AG and KTM AG. You are currently muted, feel free to ask your question following their remarks. Petra and Gottfried, over to you, and thank you for your insights.
Thank you very much for joining and for the interest. Petra and myself wanted to really show you that we are always available for your concerns, any questions. This is really a talk investor relation call, therefore, we would like to use as much time as possible to answer your questions. As Christoph has just alluded, the reason are the media reports from last night, which everybody can have an opinion on it, how biased and tendentious those were, mentioning only a single motorcycle supplier, although there is 12 motorcycle suppliers participating in the FIM World Championship, everybody has to follow the same rules. We really explicitly tried with our statement to avoid three things. Number one is to blame our customers, who are really passionate motorcycle racers in most cases.
We didn't want to blame our dealers, nor move on this topic to our competitors and really say, It is not us. We tried to find really the right statement in making clear what's really happening, number one. Number two, we tried to bring it into perspective, the enduro motorcycle and how it was framed, and it was really well-framed, with all the aspects which you could imagine that there is another Diesel scandal or a Dieselgate number two, and whatsoever, even with diesel logs or trains comparison to make that framing. As said, to bring it into perspective, we're talking about enduro models only, and as we have written in our statement, we sell only 3% of all our models are enduro models, and those 3% include all race classes. Race classes of 250cc, 350cc, 450cc, all race classes you can imagine.
If you break that down or if you do the calculation yourself, the 3% of our last year's sales of 209,000 motorcycles is around 6,000 units. I said those 6,000 broken down through all the race classes are a couple of hundred motorcycles who are specifically designed to race. You have seen, and we're happy to share if you want to see those articles, that now more and more articles are forming, especially from the motorsport community, who are trying, even without our request, are right framing what is really happening. It is very clear that those motorcycles, whoever buys a hard enduro, would never drive on the street, because those motorcycles are designed to drive up a mountain, and Erzberg will be one of those in a couple of weeks. We have wonderful motorcycles to sell if someone wants to get a fast street motorcycle.
There is no necessity to try to boost a street motorcycle with extra horsepower. What happened was that someone took something completely out of context. Therefore, we said it's a misunderstanding. We tried to explain what's usually happening, because if you want to race according to FIM regulations, because you cannot simply build a motorcycle with a rocket in the back and someone builds one with a Ferrari engine, so to make sure that everybody is following the same principles, one of those principles is that those motorcycles need to first be able to fit homologation purposes, and then there is a competition retrofit. What is happening, it's happening in stages. We sell all our motorcycles, and this is absolutely without any exception. There's not one single motorcycle leaving our factories according to homologation standards.
It's dual use purpose. You can ride it on the street, but 90% of all racers are certainly acquiring those not to ride on the street, because this is what they're not built for. You also don't drive the Ferrari in the desert or vice versa, the rally car on the street. You can do it, but no one really does it. The procedure which I tried to describe to you is we are selling those motorcycles to our dealers. The dealer is selling the motorcycles in a homologated-state to the end customer, and the end customer may decide to have a retrofit done by the dealer. This is a relationship not between us and the customer. The customer would ask one of our specific dealers to do the retrofit. There is even a template for this competition.
In Germany, it's[Non-English content] which you need to sign that you're doing this competition retrofit, and you acknowledge that once you have done it, you're not allowed to drive on the street anymore. This is, as said, the procedure which we wanted to, as said, explain to you, number one, and number two, yeah, really tell you that we are absolutely rejecting all those allegations. There is allegations like fraud and misuse and whatsoever, together with the emissions, which are also completely out of standard. As said, we just thought it's necessary not only in good times like two weeks ago when we presented our numbers to you, that we've managed to double our sales.
We're here to answer any of your questions, to hear your concerns, but to really also tell you how much, and we just saw it in the last couple of hours, how strong this community is all of a sudden acting. You will see really from multiple journalists, and I think this is even better than us speaking and trying, that someone says, okay, they're only defending. I think the biggest power is if independent journalists are rightsizing those issues. This one concern, which was raised by one of the investors, is this happening only to KTM, and what's happening and what's going on? As I said, there's 12, and those are the most well-known and biggest companies in the world who are participating in those World Cups and who are building also enduro bikes according to those standards.
It is not a KTM solely issue where we are gaining a competitive advantage over someone else. It is really a long-standing industry practice that it has to fit this dual purpose, that first homologation, it needs to fit the homologation purposes, and then you can retrofit it and start racing. I'm pausing a little bit. Petra, I don't know if you want to add something, or if we just, yeah, really invite you to ask any questions.
Raise your hands, please, if you want to ask a question. Yeah. Yes, Manfred, please.
Manfred. Yeah. Hi. First of all, thanks for the very active communication. That's exactly what we appreciate in communicating with companies. Honestly, I'm absolutely not concerned at all, knowing the sector a little bit from personal as well as professional background. What is a bit questionable is we know the lawyer has been quite active in the Dieselgate, so the diesel scandal with VW. It's common currently to focus on ESG, on CO2 footprint. This is something which is definitely in the public mind now. There are two things. First, do you plan any legal actions against these journalists because it's very poorly investigated? Secondly, what do you expect from legal point of view against KTM, given these allegations? We know how Volkswagen ended up. What shall we expect purely from financials and reputational risk?
Thank you, Manfred, for the question. Really, I want even the comparison with the Volkswagen Group and what has happened with the Diesel scandal, I tried to be precise that we are not changing anything to fulfill purposes to be on the street. These are motorcycles designed to be in the off-road. We have, as said, 97% of all other motorcycles, which we sell in all classes, have enough horsepower to be sold. This is absolutely not happening, that we're trying to deviate something, trying to hide something. As said, these are those purposes. We are at the moment, as you said, it's very poorly investigated. Of course, some gave. It's well-framed because they're letting others speak. They have a lawyer and whatsoever, and we are at the moment consulting media lawyers whether and how to go behind them.
As said, if you just only look to Austria now, even one of the most shouting newspapers, like [audio distortion] doesn't even have it on the report. We need to wait and see if more bullets are coming. As I said, we see, and I've just while we talk, received from Speedweek, the next article, there is a 1000 PS, 1,000 horsepower, it's called article. There is another article which really came out at 8:00 A.M. without even us talking to where all those really not only hardcore fans, but everybody who's aware what's going on in motorsport are now right-sizing and framing it. It will really depend whether we want to cook up this topic again. If necessary, I think we're now collecting all those false allegations and fraud, and every newspaper said something different. We're trying to trick, we're trying to do this.
We're carefully monitoring this. We had even in the first corporate statement, the sentence that we remain, like all our rights, to go after those. We thought at the end, it's again, an invitation to fight. I think our statement is very clear. I think most newspapers, at least in Austria, which we talk to, have now realized that it's a complete misunderstanding, and it's not a Dieselgate, and that it is also something which is not a KTM thing, but an industry thing. Depending how it will really proceed, we will then see whether we really are going after them because it costs a lot of money. Most importantly, I think what you are interested is, can someone really hit us? This topic, at least what I had to learn, came up five times over the last 20 years.
We have in our user manual, and I can even send you a picture of it. It is, I think, in font 18 in bold letters with exclamation marks, where we as a manufacturer are really pointing out and telling the customers that those vehicles, and we really only talk about specific enduro. It's a hard enduro where you, as I said, go up the Erzberg Mountain, that those if you do the competition retrofit, are not supposed to be ridden on streets, and that you lose all homologation and street legalness. This has been executed and evaluated by lawyers already five times. I'm not saying that someone like if they want to be busy, they are trying it again. As we have even communicated, we are delivering those motorcycles 100%. All our motorcycles are leaving our factory as per the homologation standards and European regulations.
This is where I said our lawyers last night immediately identified where is a point where they could take us, and at the moment, they did not immediately advise us that we need to go to a big law firm and start defending us.
Maybe, Gottfried, allow me to add just one additional sentence. Different to the Volkswagen Dieselgate, where customers felt deceived by buying a car that did not fulfill the standards, our customers, our end- customers deliberately, willingly, and also by signing, want to change the condition of the bike. There will not be a huge crowd that will go against KTM because they feel deceived. It's exactly the opposite. Those customers were looking, they were buying a homologated vehicle and then decided themselves to change the condition in order to race on the track. That's also a different situation adding to the overall situation.
Yeah. Thanks. Fully agree with that view. It's a big, big difference. There's one thing, as far as I read, there are now legal investigations, official investigations going on, I think in Germany, if I read that correctly, I don't know. I think the background so far, what I understood is that you as manufacturer, are obliged to make those changes as difficult as possible. To simplify it, is that true? Is there some EU regulation which is binding for you to avoid those technical changes or not? What is the basis for a potential legal official investigation?
First of all, I think we need to say that we are not aware of a legal. We just heard it. We, as I said, have not received any legal information. We are again, triple-checking everything, what was executed already as said five times in the past. As of our today's knowledge, there is no rule. You have to differentiate. One is a rule where you cannot allow someone who is driving on a street with a car to make those changes. This would even question all the Remuses and Akrapovič's of the world where you change a normal exhaust. One is, Is it happening for really the normal use case, being on the street, or is it for the use case of racing?
What we do, therefore I said it's even in the dealer net called and, we're changing the competition, not to drive anymore in the street, and with exclamation marks, you're doing this only for the purpose of racing. Those EU regulation do not apply to racing, they apply to if you, as a manufacturer, as said, are allowing or hindering, and as I said, even this is a question mark, because this would kill the whole aftermarket industry where people are then retrofitting all their vehicles. Definitely what we are talking about, our use case is that those motorcycles are designed to race. They're designed to race not on the street, but on off-road. With this competition retrofit, you're leaving any of this street legal argumentation with the manufacturer should do, because as I said, then there wouldn't be motorsport.
There would be not one car who races the car rally, and also the world rally. All of them have even a license plate. None of them is driving on the street. This is some, hopefully, the explanation you're seeking for, that those EU regulations are applying for the street use, and we are in competition racing use.
For racing, you also don't need blinkers and mirrors and lights and all of this. This is a completely different ballgame, and it's a tool for sports.
Good. Thank you very much.
Are[crosstalk] there further questions?
[audio distortion]
Yeah, perhaps just a quick clarification question. As of today, no financial impact expected, no provision booking, et cetera, over the coming quarters as we stand today?
This is correct, we always have communicated and we haven't done anything wrong. We sell our motorcycles in the way they should be. They are homologated. There is a clear governance structure how those vehicles shall be sold on to the end customer. From our point of view, there hasn't been anything wrong, therefore, I also don't need to build an accrual because I wouldn't even know what for. Can there be a negative impact out of this? Always, you never know what else they might come up with. So far any of those issues that have been raised from our point of view, there was just a new media news from Speedweek who have said this is a media scandal rather than a diesel scandal. From our point of view, we have done nothing wrong.
Will there be one or the other customer who decide not to buy a hard enduro? Maybe, we don't know. So far, we haven't seen anything.
Yeah, really, I would like to add something. Number one, the enduro is only 3% of the sales. Number two, I told you it's only 6,000 motorcycles. I can tell you that there is, in some cases, even a waiting list. We have reduced our capacity over the last year. This is why we said in the Investor Relations call two weeks ago that we deliberately reduced our offering to allow the market to come back. We see pre-order rates for our motorcycles, which are historically high. Therefore, Petra and myself are not concerned that this, if at any, would have a negative or material impact on our sales.
I would even say that there is a chance that it has even a positive impact, because I said if you only read the comments of all those racers, yes, it's a negative publicity or it started this way, but there is a lot of publicity at the moment, and I doubt that, as I said, those 6,000 are broken down in a couple of hundred in each and every race class who choose a KTM because the current world champion in the Motocross GP, the current champion in the MX2 are all KTM riders. People who are riding a KTM, and that's the reason why people are buying those hard enduros, and that's the reason why if they watch Erzberg Rodeo in two weeks and they see what insane stunts will be performed with those hard enduros, this is the reason why people are buying it.
They love the sport, they love the brand and the fun of it and the performance. Therefore, I don't think that those 3% of our sales will be negatively affected.
May I ask one more question here?
Sure.
To my understanding, nobody ever drives an enduro for going from to the office and back home.
Okay.
It is so awful to drive. Do you have any statistics on how much of your sold enduros are racing only, and how much are never changed and are really used as normal, ordinary bikes?
Unfortunately, I would have loved to given you that statistics, but I can tell you my gut feeling is, as you said, no one. Even if you're a hardcore motorcycle rider, if you want to ride on the street, you buy a different motorcycle. This is not designed for the street. The clutch, everything where you need to jump and where you go from one hindrance, like obstacle to the next obstacle, it is not designed for street purposes. Yes, it has first, otherwise you cannot race, and therefore, I'm not trying to repeat myself, you cannot race those race classes if you don't have homologation fit in first place. This is only because everybody could come to a race with, as I said, a self-manufactured motorcycle, where you're not comparing apples with apples. Yeah. This is the reason why those enduro motorcycles have that rule.
This is certainly not to gain any new youngsters who want to be on the street and ride instead of 9 horsepowers with 50 horsepowers. We have, as I said, 97% of our motorcycles, and we have 125cc, we have 150cc, 250cc, 350cc. We have so many, even in the smaller displacement street motorcycles, where you could argue, or where someone who likes to have the speed could change, too. As I said, talking about those enduro competition motorcycles is a complete misunderstanding and off the topic.
Sorry. Adding to this, Gottfried, I also spoke to a couple of our colleagues who are very crazy about motorcycles, even those guys who own one of those enduros say they drive it 100 km per year. Also on this ESG question, how much CO2 can you issue by riding it 100 km a year? Because it's so uncomfortable, nobody is using it for leisure, other than for racing leisure. It's a very different kind of vehicle. Okay.
Again, it would be a different topic because it is allowed. Motorsport doesn't have any emission clauses, neither Formula 1, nor MotoGP, or any other class, or the car rally, whether it's with car or whatsoever, has emission standards. You would certainly kill the whole motorsport.
We have 3:00 P.M.. Are there any further questions?
If not-
If you should have some more questions, please, you can refer to us. We will answer it also later on then.
Really, please, always feel free to reach out to us. We said we want to be available at any point in time to answer your question, but Petra and myself remain confident that we will really turn around this company as planned.
Thanks a lot from my side. Thanks for your interest and attention.
Yes, thank you so much. We will conclude today's call. Wish you a pleasant day or evening. Thank you.
Bye.
Thank you.
Thank you. Bye-bye