The Return of Britain's Triumph Motorbikes

OFF THE WIRE
http://www.businessweek.com/globalbiz/content/may2010/gb20100513_816646.htm The Return of Britain's Triumph Motorbikes Since its rebirth 20 years ago, the iconic maker of motorcycles used by Marlon Brando and Steve McQueen has become global and modern without losing its cool By Sarah Arnott

Related Items Ash Cloud Hits Travel Firms' Profits The Brown Paradox Bank of England Keeps Interest Rates on Hold The Crunch Took Its Toll, but British Business Is Set to Go Story Tools post a comment e-mail this story print this story order a reprint suggest a story digg this add to Business Exchange The Triumph factory smells of hot metal and petrolheads' dreams, the end of its production line stacked floor-to-ceiling with gleaming motorbikes in evocative colours like "tornado red" and "blazing orange."

But the iconic British brand popularised by Marlon Brando and Steve McQueen nearly didn't survive. "A lot of people said motorcycle production was dead in this country," says Tue Mantoni, the resurrected company's Danish-born chief executive.

"But we have proved we can survive and we can compete with the biggest brands out there."

It is quite a story: a 100-year saga of domination, decline and rebirth that is emblematic of the metamorphosis of British manufacturing as a whole. This year is the 20th anniversary of once-bankrupt Triumph's return to production. And with UK sales up by 26 per cent last year alone, there is much to celebrate at the factory tucked away on an industrial estate just outside Nuneaton. "We have gone from being a romantic heritage brand to being a serious contender in [the] global motorcycle market," Mr Mantoni says.

The company produced its first motorbike in 1902, and by the 1950s it was a world-leading motorcycle brand, seared into popular culture by Hollywood's bad boys. For nearly two decades, Triumph's dominance looked unassailable. But the Japanese were coming. Armed with better technology and more efficient production techniques, the likes of Honda (HMC) and Suzuki (SZKMF) stole the market.

"The British companies were complacent," Mr Mantoni says. "They assumed that people didn't want Japanese bikes, but in five years the whole industry was gone."

What followed is depressingly familiar: a 15-year soap opera of government-brokered mergers and de-mergers before what was left of the company finally collapsed in 1983. But Triumph clung to life. Plasterer-turned-building entrepreneur John Bloor bought the name and the drawings, and set about raising the phoenix from the ashes. It took nearly a decade to produce its first bike, but 20 years on, the relaunched company now has 1,400 employees across the world and sells 50,000 bikes every year through a network of more than 700 franchised dealers in 30 countries from Poland to Brazil.

It has been no easy ride. The designs bought from the collapsed Triumph Motorcycles (Meriden) were obsolete, and had to be re-created from scratch. But the biggest test came in 2002. One Friday afternoon, after staff had left for the weekend, a fire started in the factory's "rolling road" test facility. By midnight the plant had burnt to the ground, putting everything on hold for more than six months.

It was a time for soul-searching, says Mr Mantoni, who joined the company from the consultants McKinsey in the immediate aftermath of the disaster. "Sometimes you need that extra shock to say, 'OK, what do we want to do?'" he says. "We took the opportunity to carve out a niche for ourselves, to be really different from the Japanese."

The strategy seems to be working. Triumph's turnover has more than doubled, to £300m, in the eight years since the fire. It now accounts for 15 per cent of the key British market and 5 per cent worldwide. Partly, the group's success is a direct response to the mistakes of the past. "We learned from the 1970s that complacency leads to death," Mr Mantoni says. The competitive threat is Asia.

"We are a success now, but the Japanese manufacturers are always there, and the Chinese will come," Mr Mantoni says. "The Chinese have 25 to 50 brands now, but in 10 years there will be two or three that will be as successful as the Japanese, and we are watching that all the time."

In meeting the challenge, Triumph is the model of the small, developed-economy manufacturer: a niche brand with a reputation for high quality engineering, drawing on a carefully managed global supply chain. "

We get the best quality components for the most affordable cost, regardless of where they are in the world," Mr Mantoni says. "That is how we can be in this country and still be profitable."

The UK will always be Triumph's headquarters, he says, and all research, design and detailed engineering is done here. But engines and suspension systems come from Japan, commodity components from China, and top-quality bolts and washers from Germany.

The company also has a second factory, in Thailand, producing some components and assembling some finished bikes.

"The heart of the company is here in Britain – we have the biggest motorcycle design department outside Japan," Mr Mantoni says. "But without the factory in Asia we would not be in business today. We just would not be able to build 50,000 motorcycles and still be profitable."

Triumph has big plans, including the aggressive expansion of its model range. The biggest challenge is finding the necessary engineering skills – a familiar concern across British industry. Triumph wants to recruit up to 25 engineers in the next six months. But despite the strong aerospace and defence industries, good quality recruits are proving more and more difficult to find. "We have to interview 25 candidates for every one person we hire, and that ratio has got bigger and bigger over the last five years," Mr Mantoni says.

Just as the company looks elsewhere for the best-quality components, it may yet have to turn abroad for its designers. "The last thing we want to do is compromise, so the next step might be to go to Germany or other countries to see if they've got engineers we can hire."

Triumph may trade hard on its image of understated, unpretentious, authenticity. But its business practices are anything but traditional.

125 Years of Triumph

1885 Starts as a Coventry-based bicycle company

1902 Produces its first motorcycle

1953 Marlon Brando rides a Thunderbird 6T in The Wild One

1969 Holds 50 per cent of US market

1971 Parent group losses force sale

1977 Next parent collapses and workers' co-operative, backed with government money, becomes Triumph Motorcycles (Meriden)

1983 Triumph Motorcycles (Meriden) collapses, rights bought by entrepreneur John Bloor

1991 Reborn Triumph produces first motorbike