Global Motorcycle Sales are Falling, A Bike Theft grabbed the attention of a Motorcycle dealer and, Norton Motorcycles could Completely Cease To Exist, AMERiders information on all these topics for you.
Bike Theft Turns into Happy Dance
You know there are more thefts going global like this or similar to this but they won’t end up or some won’t end up doing this happy dance. But lets hope that there is a global happy dance soon.
Imagine that you’re a hardworking nurse out there trying to save lives in the middle of a global pandemic. Imagine that you also love motorcycles, and in fact love them so much that you spent a bunch of time fixing up a 2004 Kawasaki Ninja 250 with your stepdad. The two of you put in a whole bunch of work to make it special. There may be many other Ninja 250s in the world, but this one is all yours.
Now imagine that some jerk comes along and steals it. Worse still, they don’t just steal it; they completely trash it. The cops recover the bike and arrest the thieves, but not before your bike is so damaged, it’s going to cost more than the bike is worth to fix everything. You’d be pretty upset, right? Especially if you used that bike to get around and get to work.
All this did happen to Mercedes Suarez, a nurse from San Antonio, Texas, and an avid rider. Luckily, that isn’t where the story ends. After seeing the story of her beloved bike getting stolen and trashed on the local news, Alamo Cycle Plex owner Dave Sears said he felt like he had to step up. He started thinking about how he could help, and then this Kawasaki dealer got on the phone with Kawasaki North America to see what they could do.
Although they knew it wasn’t the same, Sears phoned up Suarez and said, “Would you like a brand new 2019 Kawasaki Ninja 400?” She couldn’t believe it was real at first, but it was. They fitted a nice tank pad, Akrapovič exhaust, and some frame sliders on it before sending Suarez home with it. You can see a full video here, and it’s lovely.
She loves her new bike and is both grateful and amazed at the generosity of the San Antonio community. A local shop also offered to repair her recovered 2004 Ninja that she’d built with her stepdad, free of charge. I’m not crying, you’re crying.
Norton Possibly Blinking from existence?
We’ve known since the end of March 2020, that Norton Motorcycles owes millions of pounds to its creditors. At long last, Norton administrator BDO filed its official “Statement of Administrator’s Proposal” report with the UK’s Companies House. That means any interested parties can now read the entire document for themselves. This report was filed on March 23, 2020, and made publicly available on April 7, 2020.
Besides the amounts owed to secured, preferential, and unsecured creditors, here are the most important things we learned from this summary:
- Norton’s own directors were already looking for a purchaser for the business as of November 2019, prior to the company formally going into administration in January 2020. Needless to say, the directors did not find a buyer.
- 331 parties expressed interest in buying the business, of which 242 traded and 89 were investors. All were of course required to sign NDAs, but only 169 actually returned those NDAs. In total, 29 formal offers to buy the business were received. Best and final offers were required to meet a deadline of March 25, 2020, but no further details are available at this time. Any results will be provided in the next Joint Administrators’ report to creditors.
- According to company records, there were 69 motorcycles in Norton’s possession or at third-party locations when the administrators came in. However, this accounting proved inaccurate, so BDO created its own breakdown. Here’s a screencap was taken directly from the report:
- A total of 466 customers previously paid deposits for new Norton motorcycles that they have not received, according to the company’s records. “These monies were not ring-fenced in a separate bank account and therefore no funds are available to return to impacted customers from this source,” reads the BDO report on this matter. These customers are considered as part of the “Unsecured Creditors” class. In terms of payout from any money available, it goes in order from Secured Creditors (which is Metro Bank, in this case) to Preferential Creditors (Employees), then to Unsecured Creditors and finally to Shareholders. As previously stated in the earlier summary, it is unlikely at this point in time that anyone other than Metro Bank will recoup any of their money.
- The Norton Stripped Bikes debacle is also addressed. “At the date of the Joint Administrators’ appointment, the Company held nine motorcycles on behalf of customers, in order to undertake necessary repairs which were covered under the previously provided warranty. A number of these motorcycles had been stripped of parts without the authority or knowledge of the owners and it has been alleged that this may potentially have been over and above what was necessary to undertake the agreed warranty repairs. Due to the Administration, the Company was unable to return these motorcycles to their original condition or undertake any repairs under warranty. The Joint Administrators continue to investigate the circumstances of these events and continue to liaise with any impacted parties.”
Here’s another bit I found particularly interesting, and which I’ll quote directly:
“The Joint Administrators have a duty to investigate the affairs of the Company, to establish if there are any actions that can be pursued for the benefit of the creditors as a whole, and also to investigate the conduct of the director. In this latter respect, the Joint Administrators must submit a confidential report to the Secretary of State regarding the conduct of all directors and shadow directors during the three years before the administration.”
The report also mentions a forensic business team it has brought in to more fully investigate this matter, after which it says, “If creditors wish to bring to our attention any matters that merit investigation, they should contact the Joint Administrators c/o BDO LLP 5 Temple Square, Temple Street, Liverpool, L2 5RH quoting reference 00324560.”
That text is toward the end of the report. However, before we get to the summary of the administrators’ proposals, I’d like to quote a bit from the very beginning of the report because it tells you exactly what to expect.
Under the heading “Achieving the Purpose of the Administration,” it says:
“The first objective is rescuing the Company as a going concern (i.e. restructuring the Company’s business, resulting in the survival of the Company).
Due to the extent of the Company’s known liabilities (including sums owed to Holdings), it is not considered that the Company will be rescued as a going concern.”
Now that we’ve hit the salient points of this report, it’s not difficult to see why BDO came to that conclusion, and why it now proposes either continuing administration of the company as it has done for the past two months, or else entering into Creditors’ Voluntary Liquidation or dissolution of the company.
Where does that leave things? It’s only a matter of time before we know if any of those 29 offers made for Norton is accepted. If not, liquidation of assets or dissolution seems likely. Exactly how long we’ll need to wait to learn more isn’t clear. However, it’s worth noting that once the company went into administration, things have moved pretty quickly ever since.
Motorcycle Sales Dropping Globally Due to COVID-19
Even before the World Health Organization declared COVID-19 a pandemic on March 11, 2020, many financial experts were speculating on the impact of the global crisis. Once motorcycle manufacturers and dealerships closed their doors to observe social distancing orders and promote public safety, we knew that the market could undergo a massive reduction in productivity and sales.
Now that economic reports for the month of March are available, we’re able to assess the impact on the industry—and it isn’t good. We all knew that global motorcycle sales stumbled in 2019, but with the advent of the novel coronavirus, we could see a further decline for markets like India and a contraction of previously growing sectors in Europe.
In India, the world’s largest motorcycle market, domestic manufacturers saw steep downturns in March. Year-over-year sales figures declined for Hero MotoCorp (-43 percent), Royal Enfield (-44 percent), Bajaj (-55 percent), and TVS Motor Company (-62 percent) during the third month of 2020.
Foreign makes weren’t immune to the economic slowdown with Suzuki India selling 42% less units during the period as well. Not all the news was bad though, as Honda Motorcycle & Scooter India managed to increase sales by 10 percent. Despite the bleak numbers, Suzuki India Managing Director Koichiro Hirao emphasized the company’s responsibilities during the global pandemic.
“At present, our first and foremost priority is to ensure the health and safety of the employees and all stakeholders,” said Hirao. “As the industry fights the COVID-19 pandemic by implementing shutdowns and taking precautionary measures, we believe that industry will overcome this difficult time and bounce back with positive growth in the coming months.”
Though Suzuki India is enduring its own woes during this time, the company still reported a 5.7-percent increase in sales during the 2019-2020 fiscal year.
“We are pleased to close this financial year on a positive note with 5.7 percent growth amid the precautionary measures taken in the wake of the COVID-19 pandemic,” stated Hirao.
In Europe, Italy’s motorcycle market crumbled with sales numbers plummeting by 66 percent. Scooter and moped purchases fell by 62 percent while motorcycle sales collapsed with a 69-percent reduction. However, the country’s motorcycle market also experienced growth in the first and second month of 2020.
Calculating the overall sales for the first quarter of 2020, Italy only dropped 24 percent compared to last year. Regardless of the meager returns, the BMW R 1250 GS sold the most units—presumably to those looking for an apocalypse-appropriate motorcycle.
With the majority of factories and dealerships still shuttered, who knows what April’s sales data has in store. Manufacturers are keeping an optimistic eye on the future with hopes that the industry will bounce back once closures and social distancing measures are rolled back. Until we reach that post-COVID-19 world, we’ll have to continue speculating about the future of the motorcycle industry.
I can hope that everyone all over the globe is working to help us get back to our global normality soon.
~And as always…
~Live Free Ride Hard~
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