SuperBike Factory Has Gone... What's Next for the Motorcycle Industry?

[00:00:03]Right, welcome back to the channel and I'm here with my buddy Andrew. How you doing? And uh yeah, I mean it's a it's not a a topic that we really like to discuss, but um you know, we're going to make the point of what is the future of the motorcycle industry in the UK after the collapse of the superbike factory, which you know, I was a frequent visitor to there and uh you know, it was only a couple of months ago we went there, shot a video uh with them, invited to go a bit behind the scenes and thought, you know, the improvements they had made were were quite good.

[00:00:34]>> It was a nice setup. Yeah, it was a nice setup and the stock got better and I know they've had the problems and you know the you know progressively got a little bit better over time I thought.

[00:00:44]Um but you know the collapse of that is massive ain't it? One of the the biggest in Europe and and it's not the only one.

[00:00:52]So the kind of I guess the question is really um with now probably up to 40 dealerships that have have closed since co I mean is it is it a a motorcycle industry problem? Is it is it a superbike problem or is it a problem with the UK economy?

[00:01:09]>> I think it's a combination of factors. I mean, interesting enough, they said that sales were just starting to nudge in the upward direction again. Um, but obviously over the last few years, they they dropped to rock bottom and that has that has an impact. If you're a a volume dealer like um Superb Factory was um then you've got to sell volumes. I mean they were the figures were still quite impressive.

[00:01:34]>> Yeah. Yeah. I mean founded in 2010 and sold around 15,000 used motorcycles in the last year. Turnover of 83 million. I mean that doesn't sound bad, does it? So >> no. And and I think they were roughly what about 10% margin uh 8 million margin on that. So >> So >> So what's gone wrong? So I I would say a number of factors but I think the uh some of those factors I think one of the things there was a ruling in 2024 with regards to undisclosed commissions. I think that really affected um finance choice and if you obviously got volumes of bikes like these guys had then they need probably different options for different financial circumstances. So I think that was a factor. Um, I think also we've got the stupid things that government's been doing. Um, you know, business rates are stupid at the moment.

[00:02:32]They've got very large premises. They're not they're not going to be cheap.

[00:02:36]>> The the likes of the electricity bill alone would be like astronomical, wouldn't it? And >> yeah, the the energy in the business sector again is stupid. It's astronomical. And then on top of that, you've got things that have been impacted um on employees. So NI >> Yeah. National insurance is a big one a certain >> yeah all all those you start to add all of those together and suddenly it changes the whole dynamic and if also you've had a pressure on sales and you've got an upward pressure on the bottom on your costs um it's you know it's not a nice circumstance to face really >> but I mean they had six you know outlets and they only just opened that last one literally a few months ago which you kind of think well you know if if if the figures are not looking strong at that point then surely why would you commit to opening another branch I mean what would be the thinking behind that >> they would have planned probably well in advance so I think that was orchestrated probably when their situation was uh a slightly different model or continued growth um um then obviously something's probably changed towards the opening period you're still committed to doing it and also you're at that stage you're probably still thinking and obviously as you know Um uh they recently went through some changes, modernization to try and improve the business dynamics.

[00:03:59]>> Um you know, those sort of things were all uh what they're trying to do to keep going forward. Um but it probably just wasn't enough.

[00:04:06]>> Yeah, I know they'd only just, you know, signed a deal with motor oil, uh Pirelli tires and stuff like that, you know. So, and like I said, the stock I saw of the bikes and this is the Donington Park one which is just up the road from us cuz we're kind of fairly frequent with visitors for a little coffee meet and things like that. And you know, it's it's it's sad to see really. Um, you know, you've got over 2 sort of 70 employees that have been affected that have lost their jobs. Um, >> and my my thoughts are with those.

[00:04:33]>> Yeah. Yeah, definitely. you know because there's some good guys up there and and you know I used to attend the bike nights there and they they'd get a you know 1100 people sort of turn up 1100 bikers I mean they were good busy bike nights >> but that doesn't put money in the till does it you know it's >> no I mean all the marketing things are important um but at the end of the day it was interesting because I remember speaking to the owner of completely motorbikes and he he said um running a cafe or whatever else. He said it all it it didn't bring buyers. Um he said that at the end of the day a lot of the buyers probably were online.

[00:05:15]>> Most of them are. A lot of the venues it's nice to go and walk around and see bikes and stuff like that, but how many sales I get actually from walkthroughs is another matter.

[00:05:24]>> Very [snorts] very rare. You know, times have changed with with any any form of shopping really. But >> but yeah, you know, it's it's it's difficult out there for for any business really because it's it's not just the motorcycle industry that's they've been heavily affected over, you know, the last few years really. Like I say, with so many dealerships um closing, it's it's it leaves a big hole and and you know, this is just not the dealership.

[00:05:47]It was a place where people would meet and gather and like I said with the bike nights and things like that, it's a big a big social >> with a number number of sites, different locations. Yeah, absolutely. I mean the one I mean obviously there's flip side to both scenarios isn't there that on one side you've obviously got a devastating situation like this and you know can you look at that as a a general problem for the whole motorcycle industry but actually a big volume player is all about the discounting model. It's about that volume and and you've got to keep that momentum going.

[00:06:22]And their business model was as a disruptor, you know, buy them in cheap, sell them cheap, but as a disruptor, they also disrupted the traditional um smaller dealers, >> right?

[00:06:34]>> And been able to compete with them. So probably maybe it's a bit of breathing sigh of relief for some of those dealers actually um because they can then get back to realistic margins. um they've not got so much com competition and there's less supply.

[00:06:50]>> Yeah, I mean I did notice that the figures are up this year as well for the first time in in quite a few years actually. We've had kind of like this is on on new bike registrations. They've probably been down 16 to 20 16 to 20% on year on year for the last few years and this is the only year 2026 where the first half of the year they've they've kind of pulled that back a little bit.

[00:07:11]Yeah, there's a there's still a lot of pressure or there was a very a lot of pressure on bike prices.

[00:07:16]>> Um because when it come to sort of evaluating do you flip one of your own bikes and you went out and wow, is that all they're worth now?

[00:07:25]>> Um >> but is is the is the profit in the new the new bikes? You know, that's that's the thing. We've seen the likes of Pitcocks, which is another one another local one to us that was part of a BMW >> um Triumph and Jucati at the time. Um, now we have got Jucati Nottingham back as well, but it's it's not part of Pitcock's. Um, but at the time I remember speaking to to one of the managers there at Triumph and he said, you know, he says the problem is when you when you're trying to sell like say a Triumph 400 Scrambler X, which the kind of like, you know, 5 a half grand bike, he says the profit in it was only 150 quid. I mean, you've got to sell some bikes >> to to turn a profit and to keep the lights on. I mean, it's not a lot, is it?

[00:08:06]>> It's not a lot at all. No. And then obviously in addition to that, you've got competition from the Chinese bikes.

[00:08:12]>> Yeah. [snorts] >> They're getting better.

[00:08:15]>> Yeah.

[00:08:15]>> Um the spec is unbelievable and the price is unbelievable as well. So yeah.

[00:08:19]>> Well, I've just bought one [laughter] >> and they are good. You know, they are good. You know, we're going to answer all those questions about the longevity and everything with the with the the Chinese bikes. And yeah, I'm looking forward to uh bringing that one to the channel.

[00:08:32]>> Um but look at look at some of the other companies that are struggling. Voru that own Jucati. I mean like they've they've not denied that they might be selling that off.

[00:08:42]>> Yeah. They they they are going to go through a major restructure and that could involve obviously offloading Ducati. Yeah.

[00:08:50]>> Um >> well how do you feel if Jucati the Chinese bought Jucati cuz you are a Jucati fan throughout and a Mortrada RS owner?

[00:09:00]>> Yeah. Yeah. I >> would you be devastated? I don't know because I mean you could have had the same view about Tucati being owned by a car manufacturer. Could you say >> well that's that's very true. Yeah.

[00:09:10]>> So um I don't know I mean some of the the Chinese brands they're very astute, very dynamic and um you know Dicati in the right hands will continue I think.

[00:09:20]>> Yeah. Exactly. It's all about uh you know just putting that money in which you know let's face it the Indian and the Chinese market is thriving.

[00:09:28]>> Um you know I've been out to India a few times. In fact just behind the camera there we've got a hero bike. one of the biggest manufacturers in the world which still need to go out and ride and uh you know most people have never seen them but they they turn over six billion a year >> and um >> yeah it's um it's and the same for the Chinese think CF Moto roughly same sort of five six billion profit last year so you know these are the sort of big players in the game now >> whether you like it or not um they've got the money to to buy up these brands >> yeah I mean it could be that it's put in the hands of a motorcycle manufacturer again um and purely motorcycle ownership again. But it's done well under Audi. It sits under Audi, doesn't it? I think so. And it's done well under Audi. I will say it's been very well supported and um the you know the model choices increased and the quality's gone up and >> and the racing heritage, they're winning everything.

[00:10:22]>> They don't make bad bikes and they've they've never gone down that road of doing cheap, have they? You know, it's just quality and that's what you you know, you're paying for at the end of the day. Um I mean even look at KTM. I mean KTM financially you know not which obviously has the impact on the dealerships but they their losses were three billion euros at the time that they were going into administration and again the LRA KTM branch which is down the road from here finished closed >> and and and the impact on that was massive and again saved by Baja in India I think bought them out. Yeah, it's still going. Amazing. They're still going really to be honest with you. But then it's a strong brand and and obviously they structure they had quite an investment in that company anyway, didn't they? And they obviously structured something there to uh to continue with it.

[00:11:11]>> But I guess all these problems again filter down the line, don't it, to the the you know, down to the sales guy really in the in the dealerships. Um, but yeah, the bigger picture is I think just the UK economy alone, it's like it's mad, ain't it, when you start thinking what isn't working in the UK now. And and this is why, you know, my initial thoughts on the superbike factory. I I'd like we know they had their problems and they were trying to address that, but you know, it's it's not just the motorcycle industry, it's the car industry, it's new property builds, it's it's the university up the road here. Look university is one of the top 10 in the country. They they made a loss of 25 million last year for the first time in the history of the >> manufacturing base.

[00:11:51]>> Councils are going bust.

[00:11:53]>> Retail shops.

[00:11:54]>> Retails. The Latown here again is just kind of like well it's extinct really.

[00:11:59]>> Yeah. Yeah. So it's it's quite a a broad cross-section and um you know there is a lot of despairing. Obviously we've got a new Labour leader now. um how much he's going to be able to change, who knows?

[00:12:16]Um there seems to be the murmurss that he's just going to increase his taxes on everybody even more. So, >> is it not just knock 50 quid off your annual electricity bill or something like that? I mean, >> it's hardly [laughter] whoopee.

[00:12:28]>> And we're going to pay it back somewhere else, I think.

[00:12:30]>> Whoopee. Yeah.

[00:12:31]>> Yeah. Big changes. E. But yeah, you know, the UK economy is struggling and this is why I think it has a massive impact on things like motorcycles and that's why I wonder what the future will be really because let's face it, they're not a mode of transport, are they?

[00:12:46]>> No, it's a luxury item. There are some people who still use them, but mostly it's a luxury item and then as you go up the up the price bracket, it's even more of a luxury item. Um there's actually uh a lot of people who purely use them for track days. Um and again that's slightly luxury but also um sits in a different category from >> which are again are costly ain't they?

[00:13:13]You know tracks are suffering really at the end of the day. So we've got tracks like Darly Moore that's basically it's you know it's going to be houses on there I think. You know the tracks been there for for years and they just don't make money anymore do they? I think they were trying to raise a gofunding thing to to save it, weren't they, from heritage viewpoint, but >> it's difficult.

[00:13:33]>> Yeah. Yeah. It's a it's a real problem.

[00:13:36]So obviously what um Superbite factory have done is they've put themselves in an in administration so that there's a potential chance to survive um a way of finding a a restructure um um a new program or whatever else. So it hasn't gone totally yet. the the risk of it going down the pan is is very high. Um um but obviously they're trying to now by putting themselves in protection against their creditors trying to find a way. Is there a way of doing it or do we just need to pull the plug on on the process? So it may possibly survive may survive in a slightly different form from what it is now.

[00:14:27]>> All right. Well, yeah, it's not looking good, but um but this is why, you know, I guess the administration process, >> some of the employees have been saying that they didn't even know nothing about it, but I guess you know, you don't in these circumstances. It's just it just ends up being like a divorce, don't you?

[00:14:43]It just gets messy.

[00:14:45]>> Well, to be honest with you, nobody knew anything about it. I mean, everybody thought who was going to be next and and I think they would probably think if you're looking at the big volume players and whatever else and sitting on you're sitting on a lot of assets that cost you money. Um, the way that uh motorcycle stock um motor vehicle stock is financed is you have a certain window of time to sell it and then obviously then at that after that point you start paying for that asset. Um so if they're not yearning those your assets are sitting static and you're not uh releasing those assets um you're also then building up quite a big cost to the business.

[00:15:29]>> Do you think a bit like completely motorcycles cuz they they had 10 dealerships they they had across the country. They they took over established dealerships as well ones that have been running for like 30 odd years.

[00:15:40]>> I think they did as well they >> Yeah. And it's like, you know, they just grow. Do you think they grow too big too quickly?

[00:15:47]>> I think um they their timing was unfortunate. Um I think they grew very very quickly and suddenly the market dropped. the demand for the market dropped off at a point when they forecast for it to continue to grow and then you had a massive gap in difference between actually what the demand was and what it actually what they expected the demand to be and what it actually was.

[00:16:12]Um and I think they were just hit by very bad timing and and what about people that have bought motorcycles or got their motorcycle that's that's trapped in the superb bike factory? they'll they'll be entitled to get that back, won't they, from their the administrators.

[00:16:28]>> Um I it's interesting because I believe that in completing motorbikes, some people lost their their deposits, lost their their >> if they if they've already paid the money over, that gets kind of lost into the system maybe. But but if your bike's in there, let's say it's having a service or anote, then it's right, >> I think. Yeah. Because the same happened in pig gods and I think all those assets were separated out.

[00:16:51]>> Yeah. Um so that it was kept it's down to interesting enough the administrators to sort that out.

[00:16:58]>> Yeah.

[00:16:59]>> And and as long as um their systems are all fairly well up to date and they can actually show what was sold was and sold whether there were >> there was finance put on it whether they actually put a deposit on it and everything else they can probably work.

[00:17:16]>> I think I think if there's you've got your asset in there then it belongs to you. It's as simple as that. it might take a little while just to get it back, but but sometimes you can find yourself if there wasn't enough cash in the bottom of it. So, when it comes to uh how do we pay out um this money? How do we pay that money back? Like Norton motorcycles for example, that was another one obviously we we haven't highlighted, but there were different reasons for that going bust. Um but with auto motorcycles um you know he was sort of stealing from people's bikes who are in there for service and putting them on brand new bikes so he could actually ship them out.

[00:17:52]>> Yeah. I mean that was >> that's downright fraud, isn't it?

[00:17:56]>> Yeah. Yeah. And nothing happened to him after that. But um >> I don't think um I don't think I think that um Superb Factory was a fairly well organized um business and I'm pretty certain that um customers who are in that situation shouldn't be out of pocket.

[00:18:15]>> Yeah. Yeah. It's it really is unfortunate and like I said, it's unfortunate for the people that's lost the jobs and it's unfortunate for everybody that did like the Superbike factory. You know, I I know it wasn't everybody's cup of tea and and over the the years they've been operating, a few people, let's say, have had their fingers burnt and uh but you know, like I said, you can't deny the fact that, you know, they sold bikes, a lot of bikes.

[00:18:38]>> And uh they've been going for what, 16 years? So, yeah, it's a it's a again a big loss for the motorcycle industry really.

[00:18:47]>> Yeah, I think so. I think I think it's very sad really if I'm being honest with you. Yeah.

[00:18:51]>> Yeah. It's just another nail in the coffin.

[00:18:54]>> So, what do you think will happen to all the stock?

[00:18:58]>> Um, my guess is it depends who who's financed that stock. So, um, but if it's a finance company, um, I think one of the biggest ones in the motorcycle industry is Santander and all they'll do is they'll just put them through bike auctions. Buying from an auction is different from obviously buying through your traditional models.

[00:19:20]you won't see them online or anything else for sale. So um there are people who will go to auctions and buy from auctions. Um um it might be that some of the dealers pick up stock and then they'll be they might be quite selective in terms of that. So they may not sell a lot of it straight away. It may take a little bit of time. Um, companies like Santender won't want to flood the marketplace because they'll want to try and realize as much of the asset value as possible and the worst way to do that is just to tip the whole lot onto the on into the market at the same time.

[00:19:55]>> Um, so they usually will trickle it out.

[00:19:57]>> So yeah, I guess it's just watch this space. Let's see what happens. But um, like I said, it's not looking good. Um, I normally at the end of the video just say like, you know, hope you've enjoyed today's video, but I'm not going to say that cuz, you know, there's been a lot of job losses there. And, uh, whether you like the Superbike Factory or not, I don't think it's something to be celebrated. Um, so on that note, we'll catch you in the next one.

[00:20:21]>> Thank you.

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