It’s been almost two years since Indian motoring giants TVS Motors bought Norton motorcycles out of administration. There’s still lots going on behind the scenes with Norton, but there’s also been a lot for me to get my head around with TVS as well.
TVS is a big company, with a fascinating culture and approach to volume vehicle production. I wrote a bit about them in my review of the G310R back in 2016 but in case you were wondering, six years ago TVS had the capacity to produce almost three million bikes a year. If you’re still wondering what that looks like, imagine a motorcycle factory that can produce 8219 bikes a day, every single day of the year. Ducati had a bumper year in 2021, selling 59447 bikes globally. That’s about a week’s worth of work for TVS, they are simply gigantic. I’ve been doing my homework on them and they’re making some moves which I think are worth mentioning, which is why you’re reading this.
TVS’s decision to buy Norton made sense to me on a number of levels. Regardless of Norton’s rollercoaster history that started misfiring in the 1980s and almost ended with Stuart Garner’s myriad efforts to absolutely smash the company off the rails, there was still a huge amount of desire to buy them. The amount of interested parties I spoke to in the lead up to TVS buying Norton made it clear that there was something worth saving. Everyone from clothing manufacturers to airline owners got in touch to ask my opinion of their various reasons to buy Norton.
If buying Norton out of administration was like a game of pass the parcel, TVS were holding the prize when the music stopped. What they unwrapped (and continue to do so even today) might not have been as desirable as they’d hoped, but they’re making good on the promise to rebuild the brand and grow it into something it hasn’t ever been in my lifetime, which is sustainable and profitable.
I’ve been up to the new factory in Solihull, drank Norton’s coffee and seen with my own eyes what they’re doing and it is genuinely way beyond what I expected. CEO Robert Hentschel is building a new culture in terms of quality before he even considers building the bikes that will represent Norton’s new approach. Like all good restoration projects, this is taking more time and money than anyone would like. Before Norton can move forward, they want to take care of the issues surrounding the old V4. That means waiting around for BDO to announce what they intend to do next with regards the liquidation of Garner era Norton, which is causing further frustration for old era customers. If the Garner era V4 wasn’t an absolute pigsty underneath those pretty chrome clothes, I have no doubt new Norton would be further down the road than they are, but sorting that out continues to cost TVS and Norton more money than they imagined (close to £2m and counting so far). I still get regular emails from various parties involved, some of whom I have absolutely no time for due to the strange way they expect to be able to communicate/challenge/command me as a journalist with an interest in the Norton story.
I’ve always maintained that the £16m purchase price that TVS paid for Norton was a snip when you consider the value in the brand name, particularly the Norton Commando. Forget the nuts and bolts and the wind in your hair for a minute and consider the price you’d put on a brand name alone.
It’s more than you think.
The largest and most respected brand consultancy in the world do an annual study in the hunt for the most desirable brand names out there and then publish the results for all to see. According to Interbrand, everyone from Lego to Ferrari, Pampers, Jack Daniels and Apple feature in the top 100. Interbrand has a legitimate and ISO accredited method of calculating brand value based on desirability rather than just profit. If you’re expecting me to tell you the brand value of Norton I’m not. But I can tell you that little old Vespa was valued at £756m (yes, seven hundred and fifty six million pounds). Based on nothing more than this paragraph, your new understanding of Vespa’s brand value and how long you’ve been aware of a really desirable bike called a Norton, would you say that £16m was too much or a bit of a bargain? When you factor in the extra sparkle that shines when you think of a Norton Commando in particular, I’d say TVS made an incredibly shrewd move when they bought Norton.
My fascination with the notion that TVS want to build (among other things) an electric Norton Commando should explain why I think the way I do in terms of how much and why TVS are onto a good thing. Time (and some more money) will tell.
But what else has TVS been up to between now and when they announced that they were the new owners at Norton?
Quite a lot, it would seem. I think what I (and now hopefully we) are able to witness firsthand is a modern day version of what the Japanese automotive industry did in the late 1960’s, otherwise known as global domination. Remember, TVS already has the capacity to build more bikes than the entire market of established manufacturers in the western world put together. Now look out of your window and count how long it takes for some form of electric vehicle to go by. We could argue about whether or not electric bikes are cool all day, but the reality is they’re already here and the market is growing. Fast.
The current scale of e-mobility in the bicycle sector is what I think should be mentioned next.
We can use the UK electric bicycle market as an example of what’s important to TVS, but on the understanding that the UK e-bicycle market is smaller than almost every country in Europe. In 2020 the UK recorded 170,000 e bicycle sales, a growth of seventy percent compared to 2019. That’s a lot. Realistic projections for the future are that this market will triple over the next three years. Also a lot. If you take this data and then multiply it by the various markets across Europe that TVS doesn’t currently sell product in, you get a sense of the scale of opportunity that they can see.
Which is why they bought a Swiss e bike company called Ego Movement in September 2021.
Don’t worry, I hadn’t ever heard of them either but TVS can see the value of what Ego Movement has to offer enough to have paid almost £13m for a majority share of the company. Ego Movement is a boutique electric bicycle company with a loyal and growing audience of fans of sustainability and the e-bike life. Kind of like Norton were, but without the Aston Martins and massive pension fraud.
Yesterday, TVS announced the purchase of SEMG. Don’t worry, I hadn’t heard of them either. The Swiss E Mobility Group own and operate the largest and best network of e-bicycle outlets across Switzerland. They own a number of in house brands and also sell third party product from the likes of Cannondale and Cube.
Over lockdown, TVS has gone from an almost unknown entity to the average UK biker, to the owner of one of the most memorable brand names in motorcycling, which now sits alongside a nationwide network of sales outlets (SEMG) in a growing European market, which also sits alongside an established specialist e-bike manufacturer in Ego Movement. You can either buy your way into a new market or build your way into a new market and in my opinion, the combination of both is what seems to be working for TVS.
It would be foolish of me not to remind you that TVS will continue to partner with BMW in the future. It was announced in December that they plan to collaborate on electric bikes, the first of which we’ll see within two years. I assumed back in 2016 that the partnership would be one that simply meant BMW would benefit from the low cost labour available in the TVS factory, that relationship has developed into collaboration at the design stage and a joint effort in terms of developing new platforms.
While I’m being sensible, it’s also worth mentioning that TVS partnered with Tata Power in October 2021, with a view to driving the growth of the Indian Electric Vehicle Charging Infrastructure (EVCI). Accelerating the development of the charging network means that customers of iCube (did I mention that TVS already sells an electric scooter?) will have more chance to charge. Riders will know where to find these charging locations thanks to the app that they already use when they buy an iQube. More charging points means more customers and more customers is always good.
Steering the ship at TVS Motors is Sudarshan Venu. Great Grandson to Thirukkurungudi Vengaram Sundram Iyengar, who founded TVS in 1911. Back then TVS were transport pioneers, setting up bus services that were able to connect workers with jobs thanks to having bus schedules that were stuck to and tickets that were stamped. In creating a service that was reliable, industries were able to grow because staff were able to travel from further afield to work.
Sudarshan has been joint MD TVS Motors since 2014 and has degrees in economics, mechanical engineering, management and technology. Equally important is his upbringing around a thriving family business, one that served to provide mobility solutions to millions of customers. That kind of grounding is an almost priceless commodity. Nobody likes having a bad day at the office, particularly in a family run business where pride and the desire to stay ahead of the game matters a whole lot more as it’s the family name above the door. A quick look at the growth of Market Cap (the total value of a company’s shares of stock) for TVS motors between 2014 and now shows that not a single penny was wasted on Sudarshan’s education and that he listened a lot at the dinner table when he was growing up. Sudarshan shares the MD role at TVS Motors with his father, Venu Srinivasan.
The work that Srinivasan has done for TVS is genuinely game changing. Everything from implementing Japanese TQM manufacturing processes (to improve quality and working conditions) in the 1980s, to setting up a trust that has transformed thousands of rural communities across India in the 1990s. You can imagine the kind of conversation Sudarshan grew up having and listening to at home and the result of that is a proud and globally formidable father and son partnership, at the helm of a business that will only continue to thrive.
So while we’ve been looking at Norton and drumming our fingers waiting for a new bike, TVS has it’s eyes on a much bigger prize, one that Norton plays an important (but not the only) part in. They’re amassing market share of a market that is directly linked to the future of motorcycling, in a market that we’re part of.
Why does any of this matter to me? I just want to look at shiny new Nortons.
Me too, but you can’t have one without the other. I’m sure when the time is right for 33 year-old Sudarshan Venu, TVS, Robert Hentschel and Norton we’ll get to see the good stuff. What I understand now (and hope you do too) is that when that time comes, Norton will be playing a part of a much greater movement. Bigger than most of us (including me) could possibly have imagined. When it happens, you’ll be able to say that you can remember when the Indians slid into our DMs and stole a huge chunk of the electric bike market in the Western world, the one that doesn’t quite exist yet. Build it or buy it, TVS has already started that journey and the only place they’re going is forward.