Ann: Vmoto Acquires the Business and Assets of its UK Distributor, page-56

"What you are stating is irrelevent to the judgement of whether a business has failed or not!"

So "healthy retained earnings balance", and growth funded from earnings, are irrelevant to the success or failure of a business? Do you even understand the terms?

I will attempt to answer your questions in sequence and to the best of my ability.

"Why would a successful business cease operations and sell assets at a discount?"
There could be any number of reasons, but that is not what happened, so the question is spurious.
What actually did happen, was an unsuccessful business - GreenMo - was restructured, and in the process sold one of it's assets - Vmoto UK Distribution Limited - to it's principle supplier Vmoto (through it's UK subsidiary Vmoto Soco UK).

Is buying a failed business a good business strategy?
Once again, that is not what happened, so the question is spurious. However, in answer to your question: It can be, and it happens often.

If the distributor was operating in an unsustainable environment, what needs to change to make it sustainable over the longer term?
For the third time, that is not what happened, so the question is spurious. However, once again in reply to your question: Vmoto will be able to reduce running costs due to synergies with it's UK subsidiary Vmoto Soco UK, which has taken over Vmoto UK Distribution Ltd.

Does VMT need to reduce their selling prices and hence margins?
So far, it seems not. They have some of the lowest cost production in the industry, and are one of the few manufacturers that are actually making a profit. I think it might even be the case that VMT is the main reason why some others are struggling.

Does the customer need to pay more for the same product?
Not to my knowledge, but that will now be under the direct control of VMT.

Does the distributor need to cut costs, maybe marketing or support budgets?
I'm not sure if they strickly need to, but I'm sure they will. Once again that is now up to VMT. As I already said, there will by synergies, and Charles runs a lean operation.

In contrast to you, I see this as a very positive development for VMT.

NB: The above post is opinion only and should not be construed as financial advice.