Norton Motorcyles collapse

British motorcycle maker Norton Motorcycles has gone into administration, following its struggle to pay a £300,000 tax bill – and as a result, the Leicestershire-based factory has faced a winding-up order from the HRMC offices over the amounts it owes.

It’s surprising, because Norton has been very busy over the past three years – acquiring a range of investments, making a range of export and licensing deals and seemingly selling plenty of bikes (well, taking deposits for plenty of bikes at the very least). So how is it they’ve not managed to pay a £300,000 tax bill?

In July 2015, (the then) Chancellor of the Exchequer George Osborne visited Norton to announce a £4 million investment from the British Government.

Article continues below...

Enjoy more Classic Bike Guide reading in the monthly magazine.
Click here to subscribe & save.

The Advanced Manufacturing Supply Chain Initiative was intended to allow Norton and its 11 supply chain partners to set up a new British Motorcycle Manufacturing Academy to train and supply the next generation of engineer apprentices, build a new 10,000 sq ft manufacturing facility and develop clean motorcycle engine technology in the UK within two years.

The funding was expected to result in 159 jobs at Norton – which was expected to grow to 600 direct and indirect jobs, including 200 apprentices, by 2020. It hasn’t.

Then in April 2017, Norton announced it was scaling up production and hiring 40 more staff – thanks to a £3 million boost from Santander.

Article continues below...

At the time, the factory was turning out a (claimed) 500 units from the 961 Commando range each year – blending traditional techniques with cutting-edge technology. But, thanks to the financing from the Spanish bank Santander, Norton was said to be ramping up production and hiring more staff to increase output and meet demand.

Former Liberal Democrat leader Vince Cable visiting the Norton motorcycle factory in Leicestershire.

The vast majority of the funds were set to be allocated to the all-new 200bhp 1200cc V4 engine and chassis which would eventually form the basis of the new Norton V4 SS and V4 RR models – which went into production in the Summer of 2017.


Article continues below...

In August 2017, Norton and Zhongshen entered into a 20-year, multi-million pound Design and Licence agreement based around Norton’s 650cc engine.

The 650cc parallel twin engine was jointly engineered and developed by Norton and Sussex-based Ricardo Engineering – and was specifically designed to the requirements of Zhongshen.

A couple of years later in December 2019, the Chinese factory displayed its Cyclone RK6 tourer and adventure bike built around the Norton licensed engine – so only a few weeks ago it looked like it was full steam ahead for the partnership.

Article continues below...

But with Norton going into administration, it’ll be interesting to see if Zongshen continue to use the engine and pay the licence fee. The specific value of the 20-year deal has remained private so far – but the initial fee paid to Norton is said to be in the millions of dollars, with ongoing royalties paid on each engine produced.

There was a £20 million export deal too. At the start of 2019, news emerged that Norton had signed a new £20m export deal with Japan – which it claimed would support 200 jobs in the UK and see around 1000 new motorbikes sold to Japanese customers over the next five years.

So what’s happened to the money? According to its last full-year accounts, the company had sales of £6.7 million on which it made a £33,701 pre-tax profit.

That’s a lot of sales and not much profit. Norton will have been making investments in new models and development of the current and ‘next wave’ of Norton motorcycles certainly isn’t going to come cheap – but considering the numerous investments and deals we’ve detailed, it seems surprising that they’ve failed to stay afloat.

What if you’ve bought a bike? At this stage there’s no answer as there’s still uncertainty about the future, but if Norton fails to get back working then there’s a couple of likely scenarios.

For the bikes that have actually made it to their owners, it’s fairly likely that the values will drop – with parts, spares and factory support extremely difficult to come by.

For punters who have laid out a significant deposit for a new Norton motorcycle – they’re going to be at the beck and call of BDO who are looking after Norton for the immediate future.

Of course, there’s more to the story than we have room for and although the news might come as no great surprise to many, it’s a massive shame that it’s come to this; particularly considering Norton’s received a lot of love from the British motorcycling fraternity.

It’ll be interesting to see as we finally get to the bottom of what exactly has happened at Norton.

Following the news, Norton CEO Stuart Garner said: “I’m devastated and personally have lost everything. However, my thoughts are with the Norton team and everyone involved, from customers, suppliers and shareholders, at this truly difficult time.

“Without dialogue Metro Bank appointed BDO administrators yesterday. We are now working positively and proactively with BDO to ensure Norton has the best possible chance to find a buyer.

“It has become increasingly difficult to manufacture in the UK, with a growing tax burden and ongoing uncertainties over Brexit affecting many things like tariffs, exports and availability of funding.”

Read more News and Features in the March 2020 issue of Classic Bike Guide – on sale now!

Subscribe to Classic Bike Guide Magazine Enjoy more Classic Bike Guide reading in the monthly magazine. Click here to subscribe.