TVS Motor Company on Friday bought Norton Motorcycles for 16 million pounds. Speaking to CNBC-TV18, Sudarshan Venu, Joint MD, TVS Motor Company said, “Norton stands for a very unique British design and an association with racing and a strong sense of innovation. Our idea is to rebuild the original glory of Norton and take it into the future”.
Headquartered in Donington Hall in Derby, United Kingdom, the hundred-and-twenty-year-old British brand is known for super bikes like V4RR, Dominator and Commando. The acquisition serves dual purpose. It marks the entry of TVS in the super bike segment and takes the company into the US, the UK and Europe where it had no presence till now.
Valued at 2.9 billion dollars, TVS Motor Company is India’s third-largest two-wheeler manufacturer. The company sells 3 million units annually and has a capacity of 4 million units. The two-wheeler manufacturer sold 30.89 lakh units and ended FY20 with a 14 percent market share.
The company exports two-wheelers to more than 60 countries in the Indian sub-continent, Middle East, Africa, South East Asia, Latin America and Central America. Well known in India for the Apache range of motorcycles, including the Apache RR310, the acquisition would also allow TVS to compete in the middle weight and superbike segments in India in future. Currently, it is the Royal Enfield brand which dominates the middle-weight motorcycle category in India.
The company sells 3 million units annually and has a capacity of 4 million units.
The company exports two-wheelers to more than 60 countries in the Indian sub-continent, Middle East, Africa, South East Asia and Latin America. Well-known in India for the Apache range of motorcycles, including Apache RR310, the acquisition would also allow TVS to compete in the middle-weight and superbike segments in India in future.
Currently, it is the Royal Enfield brand which dominates the middle-weight motorcycle category in India.
Norton makes nearly 500 units a year and has dealerships in Europe, Australia, Japan, Israel, Canada, Hong Kong and the United States.
“The Norton brand resonates very well in the UK, Europe, North America and we will initially focus on these markets which have a great loyal customer base and great commitment to the brand. We would like to expand volumes on this customer base and scale up the business”, said Sudarshan Venu.
Sudarshan added that TVS would bring the brand to India sooner or later but the immediate focus would be to fulfil the pending orders for global markets. The company has said that the acquisition of Norton was not an investment-heavy transaction and the company has not taken on any liabilities of the company.
The COVID-19 pandemic has brought the Indian automobile industry to a halt. The extended lockdown has forced all automobile manufacturers to reduce costs and capital allocation plans. As a first step, companies have started considering a reduction in salaries for the period of the lockdown.
Reacting to the developments, Sudarshan Venu said, “TVS is reducing fixed, variable cost and is postponing all other capital expenditure. We are trying to protect jobs especially at lower levels”. He added that TVS would first focus on manufacturing for export markets, once the company receives permissions to resume manufacturing.
The Joint Managing Director of TVS Motor Company said that India’s management of COVID-19 has been better than other countries. “We believe we will be back in growth territory by September and we will have a good Diwali. I think there will be a strong demand for personal mobility and therefore things will improve when the situation becomes better”, he said.