One of India's two-wheeler majors, TVS Motor Company is in the process of entering into a technological alliance with the motorcycle division of German auto major, BMW. This move will help the Indian brand to compete against leading domestic manufacturers like Hero MotoCorp and Bajaj Auto along with foreign majors like Yamaha Motor Company and Honda Motor Company. The Chairman of TVS, Venu Srinivasan, said, “We will share more details on the nature of the talks in due course.”
This technological alliance with BMW will help the Indian company to insulate its market share against a further dip and add new powerful products to its existing portfolio. Honda claimed the position of third largest scooter and motorcycle manufacturer in India in terms of sales from TVS in the last fiscal that ended in March 2012. This new move from the latter will assist the company to design and produce much more powerful bikes and prepare itself for the rapidly growing two-wheeler segment of India. The powerful bikes have been gaining popularity in the country despite the fact that the majority of the market is formed by the entry-level segment which is characterised by 100-125cc powertrains.
The sales of motorcycles with engines exceeding 125 cc in the country witnessed a growth of 17 per cent during 2011-2012 with a volume of 2.99 million units. This is an increment of significant measure over 12 per cent growth reported by overall domestic sales of 10.1 million units. An Auto Analyst, Sharekhan Limited, Deepak Jain, said, “A pact with BMW will change the fortunes of TVS.” He further added, “TVS has been stuck with its products, and technology from BMW will help it become a major player in the bigger-motorcycle segment.” Jain feels that this alliance will also prove beneficial to BMW as it can utilize TVS's network to channel its products in the country.
This news about the alliance with German automotive giant worked to the benefit of TVS and its share went up by 6.4 per cent trading at Rs. 38.95 on the Bombay Stock Exchange (BSE). However, the benchmark index at BSE dipped by 0.8 per cent. Srinivasan stated that the company is not planning to sell any stake in company to BMW. If things end up with the alliance coming along, TVS will be the third company in the country after Hero MotoCorp and Bajaj Auto to tie-up with international automotive giants to source technology.
The country's leading motorcycle manufacturer, Hero MotoCorp tied up with America based, Erik Buell Racing LLC to source powertrains. On the other hand, Bajaj Auto inked an agreement with Austria based KTM Power Sports AG to source technology and sell its products in the country. The second largest bike manufacturer holds 47 per cent stake in the Austrian company.
BMW Motorrad, the German manufacturer's motorcycle division, offers R and K series models and the S 1000 RR super-bike as part of its portfolio in India. According to Chief, BMW Motorrad, Hendrik Von Kuenheim, the German company was looking for possible tie-ups with two-wheeler manufacturers in emerging markets like India. This was to localise the production of its motorcycles and several designated parts. Whatever be the outcome of the alliance, the news has created a stir amongst the biking aficionados in the country. Since both the manufacturers' bikes, BMW's SS 1000 RR super-bike and TVS's Apache, are ultimate machines, it only adds to the thrill thinking of what would be on offer if both the companies work together.
