This week in Auto: Can TVS turn around British premium bike icon Norton?

Norton Commando 961 | Rs 20.99 lakh (ex-showroom) | The Commando 961 is one of the Café Racers that Norton brings to India. The bike gets a 961cc parallel twin churning out 80 Bhp at 6,500 rpm and 90 Nm of peak torque at 5,200 rpm mated to a 5-speed transmission. ABS comes standard with a double disc set up on the front and a single disc in the back. Suspension comes from Ohlins with fully adjustable upside down fork up front and a rear monoshock which also allows you to adjust ride height. (Image source: Motoroyale)

Amidst the gloom triggered by the COVID-19 pandemic the biggest news from the automotive sphere this week came with the buy-out of Norton by TVS Motor Company. Indian companies now own five European bike brands including three that originated in the UK.

In this edition of the auto weekly wrap we take a look at where Norton is and what lies ahead for TVS. But first, here is a complete look at all the other top headlines.

Car, SUV sales nosedive 51% in March

The lockdown announced by the government to prevent the spread of novel coronavirus, or COVID-19, resulted in a 51 percent decline in passenger vehicle sales (car, SUV and van) for March at 143,014 units as compared to the same month last year.

The passenger vehicle (PV) segment closed the year in red for the first time in six years. Last time the industry recorded a drop was in 2014. The segment had been under pressure for the whole of FY20 because of a series of steep hikes in insurance costs, poor buyer sentiments and hike in prices.

Bajaj Auto proposes pay cuts

Bajaj Auto, India’s third biggest two-wheeler manufacturer has proposed a 10 percent pay cut for factory employees if production does not resume on April 21.

The proposed cut will be for little over half of April and until the lockdown is lifted on May 3. As per guidelines issued by the Ministry of Home Affairs (MHA) on April 15, the government is allowing industries to start operation in rural areas and SEZ.

Automakers open online booking despite uncertainty on delivery date

There was no certainty that the Centre’s three-week lockdown period would be lifted on April 14, given the rising cases of COVID-19 across the country.

Yet, a handful of manufacturers encouraged and promoted online purchase of vehicles though it became impossible to commit a date of delivery for the bookings because of uncertainty surrounding the lockdown.

BMW pips Mercedes to the top spot in Q1

BMW has regained the top spot in India's luxury car market after a gap of seven years beating Mercedes-Benz. The sales numbers shared by the two companies pertain to the January-March quarter (Q1) of 2020.

BMW sold 2,482 units in Q1 2020 while Mercedes-Benz sold 2,386 units. BMW India sales comprised two brands - BMW (2,365 units) and Mini (117 units).

SIAM seeks GST cut, scrappage policy

Auto industry body SIAM said it has sought temporary GST rate cut on vehicles and introduction of incentive based scrappage policy from the government at the earliest in order to revive the sector amid the coronavirus pandemic.

While appreciating RBI's announcement to support NBFCs and MSME sector by infusing liquidity in the system, the Society of Indian Automobile Manufacturers (SIAM) sought several 'key interventions' for the auto sector.

TVS buys Norton for Rs 153 crore

TVS Motor Company, India's fourth largest two-wheeler manufacturer, on April 17 announced the acquisition of Britain's iconic sporting motorcycle brand Norton in an all-cash deal.

The Chennai-based company will pay GBP 16 million (Rs 153.2 crore) by acquiring certain assets of Norton Motorcycles (United Kingdom) (in administration) through one of its overseas subsidiaries.

This is the first-ever overseas acquisition by TVS Motor Company in its 42-year old history which has to its credit the launch of moped, scooters and motorcycles that are largely powered by engines less than 200cc.

Norton’s engine range starts at 1000cc, putting it in same league as MV Agusta, FB Mondial, Harley-Davidson, Aprilia, Kawasaki and several others. Norton brings with itself a similar, century old brand heritage that three other India’s companies are also keen to explore.

Bajaj Auto joined hands with Britain’s 135 year old motorcycle brand Triumph in January this year to launch a series of mid-capacity motorcycles for India and the world markets.

Mahindra Group acquired another British bike brand BSA in 2016 while simultaneously securing a brand license agreement to produce motorcycles under the Jawa and Yezdi brands. The Mumbai-based firm also owns the 122 year old Peugeot Motocycles of France.

But perhaps the most well known legacy brand success story lies with Royal Enfield. Also a British brand Royal Enfield was revived by Eicher Motors CEO Sidhartha Lal after the struggling brand was sitting on the brink of bankruptcy.

Lal’s sustained efforts with Royal Enfield are similar to John Bloor when he founded Triumph Motorcycles after the original Triumph Engineering went into receivership in 1983. Both brands are run profitably and are set to challenge each other soon.

As with Norton a petition was made by UK citizens some months ago to Bloor to take over Norton’s management and ‘keep it British’ since both brands have a similar storied past and both are based in the Leicestershire county. Triumph politely declined the offer stating that there is enough on its plate given its partnership with Bajaj.

Soon after Norton Motorcycles slipped into administration three weeks after being in court for non-payment of GBP 300,000 in taxes owned to HM Revenue and Customs. Shortly afterwards the company ceased manufacturing in February but not before dishonouring confirmed orders from customers based in Australia and New Zealand.

Norton was bought by businessman Stuart Garner in 2008 the same year when Lehman Brothers collapsed. Garner, who became Norton’s fifth owner, tried to revive the ailing business after production of the bikes stopped under its previous owners managed from the US.

Garner pushed Norton’s business forward. He moved manufacturing to a factory that was more than five times bigger at Donington Hall estate after building and delivering more than 2000 motorcycles to customers around the world. Norton even returned to the famed TT race held at Isle of Man under Garner.

However economic instability, worries of Brexit, stricter emission norms, fund crunches, rising competition and a lastly a pension fraud forced Norton into insolvency.

Will Norton's fate change now?

Lal had revived Royal Enfield tapping the brand’s prowess in the Indian market first before taking it global. BMW took help from TVS to build motorcycles that cost less than half their previous entry range. Europe’s largest bike maker KTM partnered Bajaj Auto to start doing something similar several years earlier.

Can Sudarshan Venu, joint managing director of TVS Motor Company, who has led the Norton buy-out, do a Bloor? Can TVS afford to make big investments in reviving Norton’s business including supporting the development of premium models? Will TVS have to look at India’s cost model like others to bring business stability?