BMW Motorrad eyes partnership in India

TVS Motor is the frontrunner among other firms the German bikemaker has held talks with. Autocar Professional finds out its growth strategy for emerging markets.

Autocar Pro News DeskBy Autocar Pro News Desk calendar 16 Jul 2012 Views icon5880 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Entering into an alliance is the route most global OEMs are taking. Some do so to sustain their business, others to expand globally. BMW Motorrad, the two-wheeler arm of the German carmaker, falls in the second category. Over two years after entering India, it is now reportedly scouting for a partner. Among Indian companies it is eyeing, TVS Motor is the frontrunner. No contract has been signed yet. “We are in talks,” confirmed VenuSrinivasan, chairman and MD, TVS Motor.

It is not clear at the moment what the nature of the partnership BMW is seeking. But a key factor could be to launch locally-assembled bikes at a competitive price. Importing them involves exorbitant import duties. At present, Harley-Davidson assembles bikes via the CKD route while Honda imports them as CBUs. With a local partner, BMW Motorrad can kick off assembly operations and price its offerings aggressively.

In an email response to Autocar Professional, a BMW Motorrad spokesperson says, “The motorcycle market for premium motorcycles in India is still quite small but is beginning to develop. Against this background, it’s been a strategic decision to enter the market now, to be prepared for the expected future growth. Due to tax reasons, we currently don’t bring motorcycles with less than 800cc into India.”

Experts believe a partnership, on the lines of Bajaj-KTM, could work well for BMW Motorrad and TVS. Such an alliance could help TVS in terms of technology and give BMW Motorrad an opportunity to co-develop bikes for emerging markets and the segment of entry level performance bikes in Europe.

TVS Motor, on its part, has showcased its R&D capabilities in its products like the Centra (with an indigenously developed VT-i engine with variable ignition timing) and Jive, an auto clutch bike. Its premium offering, Apache, has racing-inspired engine and features.

On other fronts, TVS has a long racing history. That could be another common area of interest between TVS and BMW Motorrad-owned brand Husqvarna. One of TVS’ new-generation R&D projects is the Qube hybrid scooter, due for a 2013 launch. An indigenously developed automatic transmission technology concept may also make it to the market. The company will depend on these products and new technology to improve its market performance, which has been lukewarm of late. Honda’s 100 percent-owned subsidiary recently overtook it to be the third largest player in the domestic market.

An alliance with BMW will also strongly boost TVS Motor’s competitive edge. An encouraging sign is the fact that a senior BMW Motorrad executive has reportedly praised TVS’s production processes.



BMW Motorrad began selling bikes in India in December 2010. It has sold 117 bikes till June 2012. In 2012, 45 have been sold so far. The company hopes to touch 100 by December 2012. It has one sales outlet each in Delhi, Mumbai and Bangalore. It plans to shortly launch its ‘most affordable’ bike in India – the F650 GS – with an ex-showroom (Mumbai) price of Rs 11 lakh. The bike is currently undergoing homologation. In a market of over 5,000 units annually for bikes above 500cc, 100 is a small number. That could well change if the company strikes a deal with an Indian partner for an assembly base here and taps the partner’s local expertise and reach.

Asia focus

BMW Motorrad sees opportunity in Asia’s emerging markets in areas other than bikes. It has struck partnerships in Taiwan and China for sourcing engines. Its partner in China – Loncin – assembles a 650cc single-cylinder engine for BMW models. Kymco, its Taiwanese partner, produces a 650cc two-cylinder engine for BMW’s new scooters, C600 Sport and C650 GT. Kymco also produces the 450cc single-cylinder engine for Husqvarna. All these engines were developed by BMW Motorrad.



If talks succeed, India will be the third production base for BMW Motorrad in Asia. “We look for partners and find new solutions to expand our markets,” says the spokesperson. India is currently a sourcing base for the company. Hero Motors, one supplier, bagged an order last year to supply DIN 6 gears for BMW bikes. Incidentally, BMW Motorrad reportedly held talks with the Hero Group’s flagship firm Hero MotoCorp for a potential partnership.

“In context with our worldwide sourcing activities, we are looking at India as well as other Asian countries. The aim is to find new partners for parts supply or production of components,” the BMW Motorrad spokesperson said. Along with India, China and Taiwan, another emerging market, Brazil, is also playing an important role in BMW Motorrad’s growth. Its assembly plant in Brazil is expected to roll out “6,000- 7,000” bikes this year. In 2011, after Germany, BMW Motorrad achieved its biggest sales increase in Brazil with 5,442 units sold, a 55.2 percent growth over the previous year. Last year, BMW sold 104,286 units, the highest in its 90-year history. Husqvarna’s sales, however, fell 23 percent to 9,286 units in 2011 due to inventory corrections. Husqvarna’s expertise lies in developing and producing off-road and dual purpose bikes. With the birth of that segment in India, Husqvarna could well be looking at India seriously.

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