Triumph back in Britain

[The Spin Doctor]

In a fairly astonishing policy u-turn, Triumph Motorcycles have just announced that the company is planning to return motorcycle manufacturing and triple bike production at its Hinkley factory.

Although visitors to the factory were told it was the most efficient production line in the world, it was in February 2020 that Triumph announced it was shutting down nearly every production line in the UK and shifting its main manufacturing operation to Thailand.

At the time of the announcement, the iconic UK brand was making around 65,000 motorcycles each year.

But following the move to three factories in Chonburi, Thailand, the final remaining production lines at Hinkley built just the Speed Triple and Tiger 1200 models - around 4,500 bikes.

And since Triumph planned to 'realign' operations as part of its global ambitions to double its share of the Asian market over three years, the the intent was to shut these production lines as well, with only Triumph Factory Custom (TFC) models and special projects continuing to be produced in the UK.

As Triumph put it, this was "to facilitate the more efficient production of specialist prototype bikes and the continued manufacturing of high-end bespoke motorcycles such as the Triumph Factory Custom bikes".

Chief commercial officer Paul Stroud said the £530 million turnover business expected to see a huge growth in sales across Asia and China in the next few years - making Thailand the obvious choice for all mass production.

He said Triumph also needed to adapt to growing competition for the kinds of bikes it makes, while many of its competitors were moving their production to low-cost countries.

"We are now preparing for Triumph’s next wave of strategic growth. We want to maximise the growth opportunity for the brand globally, particularly in the Asian markets. This is why we are increasing our design resources here in the UK and focusing our mass production capabilities in Thailand," concluded Nick Bloor, Triumph’s Chief Executive Officer.

Statements at the time emphasises that Triumph would continue to invest in research and development of new models with investment in a new 16,000-sqft R&D centre to design all Triumph motorcycles.

Not surprisingly, the 20 new design engineer jobs were more than offset by the employment losses on the factory floor.

So news that emerged last week that Triumph is bring back some of the production lost to the UK really is something of a shocker.

Although manufacturing won't return to the 60,000 unit level before the shift to Thailand, the newly developed facility at the Hinckley factory is expected to produce 15,000 motorcycles a year initially, increasing to 20,000 per year.

Bikes to roll out of Hinckley will include the new Tiger 1200, the Tiger 900 Range, the Rocket 3 and Speed Triple.

The new production lines are expected to bring back around 100 jobs and should be operational at full capacity in about nine months.

So why the factory ping-pong?

I've got my theories but you don't shut a factory then reopen it two years later without significant costs.

[Hot_Air]

So why the factory ping-pong?

I've got my theories

Do they involve oligarchs, money laundering and an evil dictator?

[Rockburner]

Someone posted a story a month early?

[The Spin Doctor]

Someone posted a story a month early?

Here? I didn't see it.

The earliest reference I've found online is a story run in BusinessLive on Dec 1 at the time of the celebration of the Millionth modern era Triumph which quotes Chief operating officer Paul Stroud as saying Hinckley had a team of almost 700 people providing head office functions and design engineering and testing, and the company was continuing to build bikes there.

The story said that Triumph expected to build more than 5,000 bikes in 2021, "with plans to grow that as demand grows".

He was quoted as saying: “It was always our intent to retain an element of production here and it fluctuates up and down – it was never the case that we were stopping production here in the UK and that has never been the intent of the company."

I have to say that's not how the move was portrayed in 2020 when a Triumph press release was widely reported as saying that the role of the Hinckley factory would be restricted to the production of specialist prototype bikes and the continued manufacturing of high-end bespoke motorcycles such as the Triumph Factory Custom (TFC) bikes.

By August last year, 85% of all Triumph motorcycles were being built at their 3 Thailand facilities. 8.5% are assembled at their Brazilian facility and the remaining 6.5% in the UK.

The statement back in December from Paul Stroud said that the company always planned to "...retain this flexibility. We’ve never made any secret of the fact that the majority of our production happens in Thailand but we’ve always maintained a production capability here in the UK and with model changes that production capability came down and now it’s ramping up to reflect growing demand for certain models in Europe."

But it didn't say when and how many. The latest news says it's definitely happening and tells us how many bikes will be built as some production returns.

[Rockburner]

No, i meant it sounds like an early April fools.

[Le_Fromage_Grande]

Maybe they've worked out people want to buy a Triumph, not a Thaiumph.

[Trinity765]

Rather than say "built" it's more accurate to say "assembled".

I went on a factory tour in 2009. The bikes are designed in the UK, the parts were made wherever it was cheapest in the world and shipped back to the UK to sit in a warehouse. They were then assembled as required, as in, they are not put together without already having a purchase order. As the bikes moved along the assembly line, they were different bikes. A Street followed by a Tiger followed by a Speed etc in response to the orders that were next in the queue.

I know nothing about factory production or if the Thailand operation was the same but it is surely cheaper to make 5,000 Street Triples in one go and 5,000 Tigers in one go on dedicated assembly lines.

[Supermofo]

Rather than say "built" it's more accurate to say "assembled".

I went on a factory tour in 2009. The bikes are designed in the UK, the parts were made wherever it was cheapest in the world and shipped back to the UK to sit in a warehouse. They were then assembled as required, as in, they are not put together without already having a purchase order. As the bikes moved along the assembly line, they were different bikes. A Street followed by a Tiger followed by a Speed etc in response to the orders that were next in the queue.

I know nothing about factory production or if the Thailand operation was the same but it is surely cheaper to make 5,000 Street Triples in one go and 5,000 Tigers in one go on dedicated assembly lines.

Better than when I went last year. There were no bikes on the production line, I think there were 3 tiny production lines with nothing on them and about 15 bikes made and ready to go mainly RS model Streets and Speeds. Biggest part of the factory was a like a giant Toy's R Us with shelving units filled with pre made Thai Triumphs waiting to go.

I'm guessing all that will change given the numbers quoted above and the tour guide told us to come back in about 18 months and we'd see something completely different but he wouldn't say what. I'm guessing it's the new factory.

[Count Steer]

So why the factory ping-pong?

I've got my theories

Do they involve oligarchs, money laundering and an evil dictator?

They've made the bottom right corner darker so you can't see his feet don't reach the floor.

(Didn't Bananaman/boy have studio photos taken of himself shirtless, on his bike? Must be 'a thing').

[McNab]

Rather than say "built" it's more accurate to say "assembled".

I went on a factory tour in 2009. The bikes are designed in the UK, the parts were made wherever it was cheapest in the world and shipped back to the UK to sit in a warehouse. They were then assembled as required, as in, they are not put together without already having a purchase order. As the bikes moved along the assembly line, they were different bikes. A Street followed by a Tiger followed by a Speed etc in response to the orders that were next in the queue.

I know nothing about factory production or if the Thailand operation was the same but it is surely cheaper to make 5,000 Street Triples in one go and 5,000 Tigers in one go on dedicated assembly lines.

Yeah, I went a couple of years ago, probably 2018 and I knew they didn't work the weekend or Friday afternoon so went Friday morning, There still wasn't much going on on the line, only 2 people working, and as you say, different bikes coming off the same line.
They did like to stress the parts that they made there in the factory in the first half of the tour, camshafts and whatnot.

I found it weird they kept the tour going after the announcement about moving production to Thailand.

So @The Spin Doctor what are your theories as to why the change? I know a few people felt a bit like the brand had lost it's shine by moving production, but I don't think it would have had much impact on their sales, certainly not enough for the U-turn.

[Rockburner]

Rather than say "built" it's more accurate to say "assembled".

I went on a factory tour in 2009. The bikes are designed in the UK, the parts were made wherever it was cheapest in the world and shipped back to the UK to sit in a warehouse. They were then assembled as required, as in, they are not put together without already having a purchase order. As the bikes moved along the assembly line, they were different bikes. A Street followed by a Tiger followed by a Speed etc in response to the orders that were next in the queue.

I know nothing about factory production or if the Thailand operation was the same but it is surely cheaper to make 5,000 Street Triples in one go and 5,000 Tigers in one go on dedicated assembly lines.

swings and roundabouts - dedicated assembly lines for each model would be astronomically expensive.

A modular approach to development means that you can have 1 assembly line rather than 5, and 1/5th the number of workers and robots and machines and storage buckets etc which makes the whole process far more cost-efficient.

[Horse]

So @The Spin Doctor what are your theories as to why the change? I know a few people felt a bit like the brand had lost it's shine by moving production, but I don't think it would have had much impact on their sales, certainly not enough for the U-turn.

Here:

[Rockburner]

So @The Spin Doctor what are your theories as to why the change? I know a few people felt a bit like the brand had lost it's shine by moving production, but I don't think it would have had much impact on their sales, certainly not enough for the U-turn.

Here:

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[Horse]

So @The Spin Doctor what are your theories as to why the change? I know a few people felt a bit like the brand had lost it's shine by moving production, but I don't think it would have had much impact on their sales, certainly not enough for the U-turn.

Here:

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I only posted a link, the forum did the rest. It's on Spin's Facebook

Screenshot_20220308-123026_Chrome.jpg (721.79 KiB) Viewed 465 times

[Horse]

https://www.facebook.com/

134885869877341/posts/

-comment-why-are-triumph-building-bikes-in-the-uk-againin-a-fairly-astonishing-p/5292949280737615/

Stitch it together again.

[The Spin Doctor]

No, i meant it sounds like an early April fools.

Ah - gotcha! Not paying attention to the date

Nope, looks totally official.

[The Spin Doctor]

My guess? Trade tariffs.

The first factor is that Thailand is an important market for powered two wheelers, and one rapidly becoming more sophisticated in its tastes for premium brands. Triumph sales in Indonesia were up over 300% in 2021.

Steve Sargent, Triumph’s Chief Product officer, was interviewed in September 2020 and he reported that Triumph's biggest market is the US, then the UK where about 15% of Triumphs are sold. France is third.

But he also pointed out that Thailand was one of the most rapidly growing markets right now, and of the premium brands, Triumph had almost 50% market share.

So it would seem to make sense to build in Thailand.

But a factor not mentioned is that Thailand imposes significant tariffs on some imported motorcycles. For example, Harley-Davidsons brought in from the USA are subject to a 60% tariff. As of 2021, the second-biggest and still growing market for Harley-Davidson was Thailand. So the US manufacturer has also established a factory to build bikes locally and avoid the import tariff which significantly increases the price of their products.

It appears that UK-made Triumph were also subject to the huge 60% import duty, and building in Thailand allows for the avoidance of this tariff, as well as low cost distribution to other countries that Thailand has a free trade agreement deal with. Among others, these include the emerging markets of China, India and Vietnam. And of course manufacturing costs are lower. Lower costs? More profits.

So why bring production back to the UK to service the European market?

One possible answer to that is the last moment deal struck between the UK and EU to allow tariff-free movement of new vehicles post-Brexit. It seemed that with no agreement, all trade either way would be under WTO rules which would have led to a 10% tariff, with final prices increasing more than that as VAT would be lumped on top. With no UK-EU tariff, it may be cheaper to build in the UK than bring in complete bikes from Thailand, particularly as there IS likely to be a tariff on those machines (though I can't find any information to prove that).

My other guess is shipping costs. COVID disrupted significantly disrupted shipping with vessels, containers and goods all in different places. It may be that the knock-on effect has been to increase shipping cost past the point Triumph can build more cheaply in Thailand and ship to the UK / EU.