Will a classic make a return to its home market? The ball is in the UK government's court and how far it can go in offering incentives and tax breaks. Image Credit: Agency

Mumbai: India's Mahindra & Mahindra Ltd. is crafting plans to build a UK factory to resurrect the BSA motorbike brand in a test case for whether Britain can attract companies post-Brexit.

The tractors-to-software conglomerate, which bought the defunct marque in 2016, is scouting for a site to assemble the motorcycle, Chairman Anand Mahindra said. Whether it goes ahead partly hinges on talks over government grants and a trade deal with the European Union.

Mahindra's exploration contrasts with manufacturers that have been scaling back production in the UK over concerns that the country leaving the free-trade bloc will result in higher tariffs and disrupted supply chains. Prolonged Brexit negotiations are going down to the wire with the transition period due to end December 31.

"With Brexit, the UK government is going out of its way to give benefits, which actually goes toward filling that difference in viability," said Anupam Thareja, a managing partner at Phi Capital and co-founder of Mahindra's Classic Legends subsidiary.

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Incentives will matter

The classic-bike brand owner is adopting a wait-and-see approach to Brexit negotiations before giving the green light to BSA. The factory project would depend on tariff levels and the ease of moving both workers and products across borders, Thareja said.

The government already has offered a grant to cover almost half the cost of a 10 million pound ($13 million) research center where BSA plans to develop electric motorbikes in Banbury, near Coventry. The area remains the heartland of the UK's reduced motor industry, which is increasingly focused on assembly rather than full production.

An army staple

Making the bikes in the UK is key for the brand to maintain authenticity, according to Mahindra. BSA started out as a bicycle maker before crafting its first motorcycle over a century ago. It featured extensively in the Second World War, when it was used by the British Army, but went bust in the 1970s. Classic Legends bought the brand for 3.4 million pounds in 2016.

The first BSA models are due in 2021. While racing bikes still rule the road on weekends, the guttural rumble of a classic bike with a more upright riding position is on the rise.

Retro is back

The Royal Enfield Interceptor 650cc has been the best-selling motorcycle in the 125-650cc category in the UK every month since May, according to the Motor Cycle Industry Association. BMW AG recently launched the R18 retro-inspired cruiser inspired by the 1936 R5, while Triumph Motorcycles introduced its Bonneville range as an ode to models of the same name from the 1950s and '60s.