At the end of last week, India-based TVS Motor announced the acquisition of Engines Engineering, an Italian motorcycle engineering consultancy. TVS is paying EUR 5.05 million (USD 5.9 million) for the company in an all-cash deal.
This is an interesting acquisition considering that TVS is no slouch in engineering capabilities. They develop single-cylinder ICE motorcycles and scooters from 100- 312 cc and are quite competent at it. Even BMW leans on them for their small-capacity singles, and would also co-develop and produce small-capacity twins, like the 450GS.
TVS is also good at making commuter EVs, is the market leader in the very competitive Indian market, and is also the manufacturing partner for the BMW CE02 moped.
Importantly, TVS acquired UK-based historic motorcycle brand, Norton Motorcycles, in April 2020, and also acquired Singapore/Indonesia-based Ion Mobility in April 2025. There are a couple of e-bike manufacturers as well in the mix, though that’s not very important for this discussion.
So, yes, at a group level, TVS is an engineering powerhouse, which makes the Engines Engineering acquisition peculiar.
So, what does the Engines Engineering acquisition add to TVS?
TVS mentions that Engines Engineering would become their Centre of Excellence (CoE) in Bologna. Through the acquisition, the Indian-manufacturer will get Europe-based prototyping and development capabilities that will mostly help UK-based Norton in its future product development.
Norton is releasing its new product range, its first new products since the TVS acquisition, in about five weeks from now.
But why doesn’t Norton develop motorcycles on their own, considering they are in the West Midlands?
The UK is a reasonably-sized engineering hub when it comes to motorcycle development. Royal Enfield is the biggest employer of motorcycle development engineers in the country, followed by Triumph. Even India-based Classic Legends (owners of BSA, Yezdi, and Jawa brands) has a development centre there. Norton has a development centre at its headquarters in Solihull, and that’s where the new range of Norton Motorcycles has been developed.
So, why not expand that? Why add another facility in Italy?
It has been more than five years since TVS acquired Norton, and that is an incredibly long time for developing a new family of motorcycles. TVS would have hoped to do so in three years, but Norton’s revival has been frustratingly long-drawn. Even now, with Europe heading into winter, the commercial revival is not likely to happen before April 2026, a full six years after the acquisition.
It is also likely that with two fairly large manufacturers, RE and Triumph, in the neighbourhood, Norton is likely the third choice for any top talent. With the turmoil that the brand has been in before and right after the TVS acquisition, it is likely that attrition rates at Norton have been high.
In short, Norton has a likely continuing quality talent problem that impacts product development. Remember that Norton is a legacy brand that, at one time, sat at the top of the tech capability pyramid. Any resurgence would mean motorcycles that are expected to go against high-end Ducatis, BMWs, and top-end machines from the Japanese manufacturers. That requires high-quality talent and an ample supply of them. Norton is likely facing a shortage.
Is this the first time that Engines Engineering is being acquired?
The company was founded by Alberto Strazzari in 1979 and has completed 160 projects to date. It has more than 100 employees. It has regularly worked with Indian two-wheeler manufacturers like TVS, Mahindra, and Hero MotoCorp.
In 2008, India-based Mahindra Group acquired Engines Engineering to bolster its fledgling two-wheeler division. However, in four years, Mahindra would sell the company back to its founder.
Since then, Engines Engineering has been running independently, with Manfredi Fenici, previously the technical lead, as the CEO since June 2024.
The acquisition size seems very small
Indeed, it is. USD 5.9 million appears to be a small change for an engineering powerhouse with 100 employees, facilities, and test equipment. Last year, Engines Engineering had revenues of EUR 11.32 million (USD 13.24 million), which puts the acquisition value at less than half of annual revenues.
We see two likely reasons for that. The primary reason seems to be that EE has been stagnant for a while. During the Mahindra acquisition in 2008, the revenues were estimated at about USD 12 million. That was 17 years back.
Combine the stagnation with the likely fact that the controlling family wanted to sell the company. Strazzari would be in his 70s now.
The other likely, and bigger, reason is that TVS likely did hardball negotiations and offset its business to EE against the deal value. TVS likely accounts for a significant share of Engines Engineering’s annual revenues.
What happens to Damon?
If you recall, a few months back, Damon signed an agreement to develop the HyperSport Race motorcycle for eventual production, with Engines Engineering acting as the development consultant. The total development cost was estimated at less than USD 10 million, and we don’t know how much EE was supposed to be pocketing from that. However, in view of Damon’s small-sized development team, it is likely that EE was doing much of the heavy lifting.
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Considering their financials of 2025, the Damon contract is likely a very large one for Engines Engineering. Even though motorcycle development contracts are spread across 2-3 years, it is very likely that Damon will have a significant impact on EE’s balance sheet in 2025.
Obviously, we are assuming that Damon has money to pay.
Would Engines Engineering still work as a consultant?
The other factor is that with TVS taking control of EE, would the engineering consultant be allowed to continue working on outside projects? About 13 years ago, when Mahindra sold the company back to the previous owners, one of the reasons cited in the media was the lack of trust with regard to safeguarding the IPs of clients, considering Mahindra owned the company.
Now, we believe that a consultant owned by an OEM should still work for outside clients, if that’s what they were known for before the acquisition. With sufficient firewalls in place, this should not be a problem. KISKA is a prime example of such a relationship, where they work with external clients all the time, despite having a serious KTM influence. It’s only slightly annoying that new CF Motos carry a lot of resemblance to KTMs.
In the case of Engines Engineering, the language of the Press Release indicates that TVS wants to run it as its own CoE, rather than let it function as an external consultant.
Which again raises a big question about the Damon HyperSport Race motorcycle development. It was only a few days back when Damon shared pictures of clay modelling of the motorcycle under development.
