The £16m (INR1.53bn) acquisition comes as a historic move from TVS as it is poised to strengthen the India-based brand’s position in the international markets. It marks TVS motorcycles’ entry into the mid and high-capacity premium bikes. The deal is a ‘win-win’ for both the parties. Norton, which stopped production and was under existential threat due to cash-flow troubles, mounting debts as well as controversies, will continue to operate. TVS, which has presence in over 60 markets globally, gets an opportunity to foray into high-powered and premium bike segments.
The TVS-Norton deal now makes it quite evident that India two-wheeler makers are keen towards opportunities to scale globally and expand horizontally through tech-partnerships and acquiring manufacturing know-how of ‘classic’ motorcycles. The TVS-Norton deal comes after Bajaj partnership with Triumph—a UK marque for premium bikes, in 2017 and Mahindra & Mahindra’s acquisition of BSA—another UK-based classic bikes manufacturer in 2016. Mahindra also acquired a brand licence for Czech brand ‘Jawa’, which was launched in November 2018 and is now a well-known name in the mid-capacity motorcycle market in India.
The acquisition will combine product development capabilities, production capacities and brings synergies across supply chain and distribution. Whenever TVS brings Norton to India, it will further enhance the attractiveness of the segment
Norton, which presently has limited production volumes, will leverage TVS’ strong global presence and supply chain capabilities to strengthen its market presence and re-align manufacturing operations. Norton had previously formed joint venture with Kinetic Engineering India to manufacture and supply its 650cc Atlas Ranger & Nomad bikes in India and ASEAN market, however, the plan was hit by Norton’s ongoing financial crisis and controversies. Though the company has not indicated the plans, TVS may bring Norton to India in a significant way and replicate the success of classic brands such as Royal Enfield and Jawa. However, India expansion may not be an immediate priority. TVS first needs to bring Norton back on the track and Norton needs to overcome the negative press that it has attracted over the past several months.
Apart from getting an entry into the classic segment, TVS is also expected to benefit from Norton’s iconic brand as well as presence in developed markets. The acquisition will combine product development capabilities, production capacities and brings synergies across supply chain and distribution. Whenever TVS brings Norton to India, it will further enhance the attractiveness of the segment, which has brands like Royal Enfield, Jawa, Bajaj-Triumph, Harley Davidson and, possibly even, BSA.
The author is a senior Automotive Consultant at GlobalData, a leading research and consulting company
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