Norton Motorcycles, the storied British motorcycle manufacturer under the ownership of TVS Motor Company, has reported a dramatic increase in financial losses for the fiscal year 2024 (FY24). The company’s net loss surged by 74% year-on-year, reaching Rs394 crore. This marks a troubling trend as losses have more than tripled compared to FY22. By the close of FY24, Norton’s negative reserves had ballooned to Rs847 crore, an 83% rise from the previous fiscal year.
TVS Motor Company, which initially invested Rs153 crore in Norton, has since committed an additional Rs1,200 crore, underscoring its long-term investment strategy. Despite this substantial financial commitment, the mounting losses are largely attributed to the costs associated with scaling up Norton’s operations. Senior management at TVS has framed these losses as strategic investments rather than failures, emphasising a long-term vision for Norton’s profitability.
According to TVS executives, significant improvements in profitability are anticipated once the new product line-up becomes available and revenue streams expand. However, specific guidance on when profitability might be realised has not been provided. Norton is expected to unveil its first new products in FY25, with a planned introduction of six new models over the next three years. The company aims to launch a new Norton model every 1-2 quarters from FY26 and is preparing for a strategic international expansion, targeting markets such as the US, Germany, France, Italy, and India.
The Chennai-based manufacturer plans to introduce more affordable Norton models to capture higher volumes in price-sensitive markets, particularly within the mid-premium segment of the Indian two-wheeler market, currently dominated by Royal Enfield. Investor concerns are growing over TVS’s ongoing financial support for Norton and other ventures, such as its e-bike initiatives in Europe. Analysts point out that continued investments without visible returns are affecting TVS’s standalone performance and stock value. A recent report by Motilal Oswal highlighted that TVS has earmarked Rs1,000-1,100 crore for associates and subsidiaries in FY25, adding to investor unease about the long-term viability of these investments.
As Norton Motorcycles continues to grapple with financial challenges, the industry will be closely watching TVS’s strategy and the impact of its substantial investments on both Norton and its broader portfolio.
