TVS, BMW tie up to make bikes

Two major auto players, Chennai-based TVS Motor Company, and German giant ‘BMW Motorrad’, on Monday, signed a long-term joint cooperation agreement that will enable the two to develop and produce a new series of motorcycles below 500 cc capacities for global markets.

Announcing the technical collaboration agreement at a joint press conference, BMW Motorrad President Stephan Schaller and TVS Motor Company Chairman Venu Srinivasan said the pact involved the two companies, “each offering their own vehicle derivatives, which will be sold through their own distribution channels in India and across the globe.”

For TVS, which has so far not gone beyond the 250-cc capacity range, this long-term pact will mean a foray into higher range motorcycles, taking advantage of the ‘highest quality motorcycles’ BMW makes, including sports bikes, Srinivasan said.

Disclosing that the agreement was signed on Monday, Srinivasan said it was possible after mutual visits and discussions between the two partners in Germany and India. “From our side, we were very impressed with their (BMW) technology, reliability and high engine performance,” Srinivasan explained.

BMW, on its part, was impressed by TVS’ ability “to manufacture small products with mass production, with high-quality engineering and technology,” Srinivasan said. The new motorcycles, to roll out from sometime in 2015, will be made in India in two distinct categories, he said. One would be for BMW and another for TVS, and both renowned brands will be targeted at global markets through their respective distributive chains, he said.”

Srinivasan said the new bikes will be manufactured in one of TVS plants in Mysore or Hosur, adding that further details would be shared close to the product launch in 2015.
There has been no equity infusion in each other’s company under this pact, Srinivasan said. TVS will invest close to 20 million euros under this project, while BMW will bear the “development and testing costs” in Germany, Srinivasan said.

“It is a joint effort and there is no royalty agreement; there will be two distinct products that will roll out and be sold under their respective brand names, TVS and BMW, in all markets,” Srinivasan clarified, in support of Schaller’s contention that it would not be fair to divide markets geographically.

Elaborating his position, Schaller said, for his company, the signing of this cooperative agreement with TVS meant a “strategic realignment” in BMW’s ‘premium motorcycle segment’ worldwide. Known for its green-friendly, lowest possible exhaust and emission rates, Schaller said the new vehicles, to be made under this joint agreement, will be in addition to its already known other motorcycles ranging from 650 cc to 1,600 cc.

BMW sold over 1,17,000 motorcycles worldwide in 2012, which augured well for the 2013 European season, Schaller said.