What's happening at Norton? Sale to TVS, massive investment, new bikes...

That’s a good video and I’m not gonna argue with any of his points. I was surprised at the low margin he calculated for Triumph (but I do understand that privately owned companies deliberately try and make that look as low as possible). And I agree with his approximation for Norton.

A couple of thoughts:

1. he actually missed out A LOT of announcements that they made over the 3 year period, I guess that was intentional, to focus on the highlights and prevent it being 3 hours long !

2. his payback calculations for the £124m are interesting, I agree with him that it shows TVS are in this for the long game. But it’s still rather sobering. Remember that investment will have to increase for any new models which are yet to be developed and operationalised, which they obviously have to make as they’ll simply never reach break even with the current line up. So that investment is not the final number, it’s work in progress…
 
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Take the £124M and the 62000 bikes at £2K profit as good. The £124M could be in a bank getting 5% interest or if its a loan you would be paying 8%.

So at 5% you would get £6.2M in interest or be paying £9.9M to service a loan annually. Call it £10M to service a loan.

At £2K profit per bike then just to repay the loan is sales of 5,000 bikes a year just to stand still.

So you are really talking about 124,000 bikes made over a max of 10 years ie 12,400 a year to service the interest and pay back the £124M.
 
To pay all that off, you would first have to run a functional company. To sell 5000 bikes a year, you first have to sell 500, or even 50. That is not happening.
Norton is one of the strongest brands in biking, a magical name with an iconic logo. It would be a dream job to be handed the reins. This could have been an easy assignment.
How it is possible to fail at the extreme basics so far, i.e. to pull a late-Garner-Norton v.2 is beyond me.

Garner may have been a con at the end, but most of the time it was not this bad, was it?

Why are there no get-togethers with current Commando owners?
Why is there no customer support?
Why is the sales team not calling up every lead?

OK, maybe they think this approach would not be fitting with the exalted aura of the brand, but by now they should realize that is not the correct way forward.
And: even the most snotty brands actually return calls to mortals who have handed over money for their products.

If Norton are somehow trying to sabotage their development to be able to say that they will build a brave new world with e-bikes, they should go hang themselves.
 
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kommando said:
Take the £124M and the 62000 bikes at £2K profit as good. The £124M could be in a bank getting 5% interest or if its a loan you would be paying 8%.

So at 5% you would get £6.2M in interest or be paying £9.9M to service a loan annually. Call it £10M to service a loan.

At £2K profit per bike then just to repay the loan is sales of 5,000 bikes a year just to stand still.

So you are really talking about 124,000 bikes made over a max of 10 years ie 12,400 a year to service the interest and pay back the £124M.
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Finally, someone who understands and shareholders want to see positive cashflow so they have that to worry about as well.
 
CR961 said:
To pay all that off, you would first have to run a functional company. To sell 5000 bikes a year, you first have to sell 500, or even 50. That is not happening.
Norton is one of the strongest brands in biking, a magical name with an iconic logo. It would be a dream job to be handed the reins. This could have been an easy assignment.
How it is possible to fail at the extreme basics so far, i.e. to pull a late-Garner-Norton v.2 is beyond me.

Garner may have been a con at the end, but most of the time it was not this bad, was it?

Why are there no get-togethers with current Commando owners?
Why is there no customer support?
Why is the sales team not calling up every lead?

OK, maybe they think this approach would not be fitting with the exalted aura of the brand, but by now they should realize that is not the correct way forward.
And: even the most snotty brands actually return calls to mortals who have handed over money for their products.

If Norton are somehow trying to sabotage their development to be able to say that they will build a brave new world with e-bikes, they should go hang themselves.
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This is something we have talked about before. You don't sell anything by hiding it and not hyping the marketing. TVS failed at that. Also, the product they are currently trying to sell has a 10-plus-year history of issues that could have easily been addressed in PUBLIC but still haven't.
 
Fast Eddie said:
That’s a good video and I’m not gonna argue with any of his points. I was surprised at the low margin he calculated for Triumph (but I do understand that privately owned companies deliberately try and make that look as low as possible). And I agree with his approximation for Norton.

A couple of thoughts:

1. he actually missed out A LOT of announcements that they made over the 3 year period, I guess that was intentional, to focus on the highlights and prevent it being 3 hours long !

2. his payback calculations for the £124m are interesting, I agree with him that it shows TVS are in this for the long game. But it’s still rather sobering. Remember that investment will have to increase for any new models which are yet to be developed and operationalised, which they obviously have to make as they’ll simply never reach break even with the current line up. So that investment is not the final number, it’s work in progress…
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The money these companies like Triumph, etc make is from other avenues. Motorcycle sales"profit" is very low for a manufacturer. Look at licensing, accessories, clothing, etc and you will see it makes up in some cases 75% of sales and those are high markup items. Parts sales, again high profit.

Dealers don't make big money selling motorcycles, they make money on the service and then parts and accessories.

TVS is also self-dealing because they are paying money to their own entities for engineering design etc because thats how it works.

The video is fine but it also lacking other information. The main point should be Norton TVS has only sold X amount of motorcycles and has invested X amount of dollars. Thats an expensive gamble. End of story
 
No surprise that I have a slightly different take - and my view is that some of these comments may be a little ‘short sighted’. Not by way of accuracy/intent, but context.

Papa Smurf states that Norton are not gonna return that investment anytime soon - a statement of the obvious, obviously! He then goes on to say that hopefully TVS is in it for the long haul - yup, they’ve signed up to an initial ten year plan.

TVS is not looking at 3-5 years - more like Norton‘s stated 10 year plan and far beyond - the long game. They’ve invested heavily in the startup phase with infrastructure, machinery, special tools and test equipment (STTE), in the hiring of a workforce and development of legacy machines.

They have authorised a definitive approach that is future focussed (EV’s etc) and individualistic (atelier etc), whether you agree with this or not. This indicates a long term intent. TVS (and shareholders) don’t expect to get their money back in the short term - certainly not from legacy machines in an interim period, before they introduce their own line-up or see their plan/vision develop.

In this context doing rudimentary maths for number of bikes sold to effect repayment, whilst at the same time pointing out that most income for an ‘established’ bike manufacturer does not come from bike sales, seems somewhat meaningless.

How many 961’s did Norton expect to sell - who knows? More than they have for sure. But given the profit margin (the video highlights), even a good expected sales outcome would have resulted in a modest return at best, in relation to their investment.

The 961 & V4 were readily available gap fillers IMO, to showcase engineering abilities (put a quality marker down) whilst their main game commences. Predictions of doom based on poor sales may be a little premature; this ain’t TVS’s first rodeo!

What is worrying are reports of a non-responsive spares department/poor communication - nothing new for some I realise. We are guessing at the reasoning for this of course. Maybe a turnover in the spares department of a (relatively) small workforce may cause this - who knows. If this is going to manifest it would do so in relation to comms with customers from outside of its current market - easy to spot an overseas enquiry. UK based purchasers have pointed out how responsive Norton have been.

Most of this is speculation. IMO, reaching for the most negative/catastrophic likely outcome in the absence of meaningful information is flawed thinking. Continuing to bang on about what should or should not have occurred in the past (communication, detail of re-engineering, spares etc), based on personal opinion, seems a bit pointless.

Although there are certainly significant improvements to be made from a layman’s perspective, this is obviously not “….an easy assignment” and I suspect all such forays into automotive manufacture are an “expensive gamble”.

Happy to discuss/debate - not willing to have my thoughts/opinions escalated to argument.

IMG_8855.jpeg
 
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Stephen_Spencer said:
No surprise that I have a slightly different take - and my view is that some of these comments may be a little ‘short sighted’. Not by way of accuracy/intent, but context.

Papa Smurf states that Norton are not gonna return that investment anytime soon - a statement of the obvious, obviously! He then goes on to say that hopefully TVS is in it for the long haul - yup, they’ve signed up to an initial ten year plan.

TVS is not looking at 3-5 years - more like Norton‘s stated 10 year plan and far beyond - the long game. They’ve invested heavily in the startup phase with infrastructure, machinery, special tools and test equipment (STTE), in the hiring of a workforce and development of legacy machines.

They have authorised a definitive approach that is future focussed (EV’s etc) and individualistic (atelier etc), whether you agree with this or not. This indicates a long term intent. TVS (and shareholders) don’t expect to get their money back in the short term - certainly not from legacy machines in an interim period, before they introduce their own line-up or see their plan/vision develop.

In this context doing rudimentary maths for number of bikes sold to effect repayment, whilst at the same time pointing out that most income for an ‘established’ bike manufacturer does not come from bike sales, seems somewhat meaningless.

How many 961’s did Norton expect to sell - who knows? More than they have for sure. But given the profit margin (the video highlights), even a good expected sales outcome would have resulted in a modest return at best, in relation to their investment.

The 961 & V4 were readily available gap fillers IMO, to showcase engineering abilities (put a quality marker down) whilst their main game commences. Predictions of doom based on poor sales may be a little premature; this ain’t TVS’s first rodeo!

What is worrying are reports of a non-responsive spares department/poor communication - nothing new for some I realise. We are guessing at the reasoning for this of course. Maybe a turnover in the spares department of a (relatively) small workforce may cause this - who knows. If this is going to manifest it would do so in relation to comms with customers from outside of its current market - easy to spot an overseas enquiry. UK based purchasers have pointed out how responsive Norton have been.

Most of this is speculation. IMO, reaching for the most negative/catastrophic likely outcome in the absence of meaningful information is flawed thinking. Continuing to bang on about what should or should not have occurred in the past (communication, detail of re-engineering, spares etc), based on personal opinion, seems a bit pointless.

Although there are certainly significant improvements to be made from a layman’s perspective, this is obviously not “….an easy assignment” and I suspect all such forays into automotive manufacture are an “expensive gamble”.

Happy to discuss/debate - not willing to have my thoughts/opinions escalated to argument.

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But all your reasoning fails simple arithmetic.
Someone else isn't going to just pay your bills forever.
 
I am aware of the edge I put on what I wrote.
I am writing from personal experience with them, not hearsay. I wouldn´t take it upon me to take up anything this far without having been there myself. And to clarify, I have long-standing knowledge of industry, incl. automation, programming, diagnostics, machining, casting, forging, aftersales, HR, etc.
Norton has around 200 employees if I recall the annual report. What do they do at work all day, please? It´s not like they have their own forge and foundry. How many welders does it take to weld up 50 frames in a year? Something doesn´t match.
Norton numbers so far:
2022 - 29 units of Commando Classic
2023 - 22 registered so far + single units of V4S (approximation)

I paid for one of those bikes. Therefore, year-to-date, I represent around 1-2 percent of their annual turnover. To scale it up, if it was a 50,000 bike/year company, I would have had to buy 500 bikes from them. No small change.
Combine all of this together, and it perplexes me.

I stand by the statement that with this level of investment (if actually true), the outstanding problems would simply not have to exist and cannot be explained at a professional level without something absolutely unwarranted hidden from view. I would really love to know what it is that is keeping them from performing at least nominally to the standard they so willingly sell in their communication.
 
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Stephen_Spencer said:
Happy to discuss/debate - not willing to have my thoughts/opinions escalated to argument.
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This makes me laugh every time.

How many years do you think TVS Norton can go without making money?
How many years can they operate by not making money and only spending it?

They did not design or engineer any of the bikes they currently offer for sale.

Sure, they claim they made some changes, those changes can be from the newly used supplier, or some inside workers found an easier and cheaper way to make the same part ever so slightly different.
That doesn’t mean it’s a redesign or re-engineered. Or that it’s even better.

My main problems with TVS Norton is…..
Lack of communication in both the parts department and media.

They refuse to share ANY information to its customer base. It blows my mind on how lackluster they are in todays world on how easily and cheap it is to advertise and spread the news. They choose to do this.
They choose to keep their sales and marketing numbers low.
They choose to be a quiet mouse.

I said it before, I’ll say it again.
As much as a crook Garner was, he knew how to get the products word out and how to build excitement.
TVS Norton is boring.
 
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John Bloor had the luxury of being the sole owner and there were no shareholders to demand early returns on investment, that gave him the time he needed.

TVS Motors shares are traded on the open market, currently their dividend is 0.4% per annum, what is of note is the share price is increasing rapidly, some 50% in a year. So its a growth stock ie jam tomorrow. Growth stocks are susceptible to high interest rates as their growth is based on low cost capital. If the shareholders turn there is no profit base to stop the share price tanking.
 
Voodooo said:
My main problems with TVS Norton is…..
Lack of communication in both the parts department and media.

They refuse to share ANY information to its customer base. It blows my mind on how lackluster they are in todays world on how easily and cheap it is to advertise and spread the news. They choose to do this.
They choose to keep their sales and marketing numbers low.
They choose to be a quiet mouse.
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I am following these discussions from a distance.
The Norton community is a very loyal one, and I think it surprised TVS how the community tries to guide (or instruct?) the company to march in a certain direction.
So my question to you brits is: Is there an equal strong following of Triumph, and do you also try to tell John Bloor what to make?

Cheers,
Knut
 
mdt-son said:
I am following these discussions from a distance.
The Norton community is a very loyal one, and I think it surprised TVS how the community tries to guide (or instruct?) the company to march in a certain direction.
So my question to you brits is: Is there an equal strong following of Triumph, and do you also try to tell John Bloor what to make?

Cheers,
Knut
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Well seeing that Triumph makes some popular motorcycles I dont think they need much direction. THey tried that over at Harley Davidson and the CEO ended up being replaced because sales sucked. They didnt Rushmore to the dealers to buy and the small-liter bikes failed to sell and the electric and offroad just didn't sell as well either.
 
mdt-son said:
I am following these discussions from a distance.
The Norton community is a very loyal one, and I think it surprised TVS how the community tries to guide (or instruct?) the company to march in a certain direction.
So my question to you brits is: Is there an equal strong following of Triumph, and do you also try to tell John Bloor what to make?

Cheers,
Knut
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I’m not a Brit. I’m a dumb American.
I’m not asking anyone to make anything. That would be ridiculous.
But, if I owned a motorcycle business or a business that sells anything, I’d advertise it to the fullest.
Wait, I do own a business and I did advertise.

But the difference is, I’m not selling an iconic brand of motorcycle or a business that dumped multi millions of dollars into.
TVS in “my opinion” fails with a F in this category.

Triumph knows how to advertise and they also provide news and updates. The new triumph dirt bike is an example.

TVS Norton has yet to show or talk about anything new or coming. They haven’t even done anything other than some updates to Donington designed and engineered bikes.

Hell, even Erik Buell is making bikes again and he advertises.

I know I’ll get kicked in my balls for saying this, and that’s ok. But I really don’t care anymore what becomes of Norton. Whether they make it or not. It won’t change anything.
They’re not the only brand out there. And anyone who thinks that Norton is a British brand is only fooling themselves. I’d believe that statement if it were true. Like British made using all British made parts and by Brit’s.

I find it humorous how people call Triumph or BSA or Royal not British brands, and that may be true, but neither is Norton.
 
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Voodooo said:
I’m not a Brit. I’m a dumb American.
I’m not asking anyone to make anything. That would be ridiculous.
But, if I owned a motorcycle business or a business that sells anything, I’d advertise it to the fullest.
Wait, I do own a business and I did advertise.

But the difference is, I’m not selling an iconic brand of motorcycle or a business that dumped multi millions of dollars into.
TVS in “my opinion” fails with a F in this category.

Triumph knows how to advertise and they also provide news and updates. The new triumph dirt bike is an example.

TVS Norton has yet to show or talk about anything new or coming. They haven’t even done anything other than some updates to Donington designed and engineered bikes.

Hell, even Erik Buell is making bikes again and he advertises.
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In still not understanding how "Norton" is iconic. Half the people that walk into the shop never heard of a "Norton" so I can't agree with iconic.

I think SS said it. the 961 is a placeholder until they get what I think is the electric tuk tuk or something like that in production. it will all be EV and small liter from here on out
 
Norton will always been a British brand....much like McDonald's is an American brand. Doesn't matter where you buy a Big Mac in the world, it's still an American brand.
Norton is a luxury brand that opens many doors for TVS, and offers many government grants in development and manufacturing. The re-release 961 and V4 are basically just the breadsticks that restaurants bring out to stop you moaning that your main course is taking too long to reach the table.
 
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