BMW Motorrad signs pact with TVS Motor Co for entry into sub-500cc bike segment

Munich / Chennai, April 8, 2013: As part of its strategic reorientation, BMW Motorrad is to enter the motorcycle segment below 500 cubic centimetres. BMW Motorrad, the two-wheeler arm of the German carmaker, and the Chennai-based TVS Motor Co have signed a long-term cooperation agreement to join forces to develop and produce motorcycles in the segment below 500cc.

The various stages through to the finished serial production motorcycle will be planned by both partners but implemented with different focus areas on each side leveraging the strengths of both companies. The cooperation agreement involves the two companies each offering their own vehicle derivatives, which will be sold through their own distribution channels in India and worldwide. While TVS Motor Co is to invest 20 million euros (Rs 142 crore) on manufacturing operations, BMW Motorrad will invest on development and testing. However, the German partner has not divulged its level of investment in the project. Manufacturing is to begin “sometime in 2015.”

Bikes with different badging

The motorcycles, in differing styles, will roll out of one of TVS’ existing plant, either Mysore or Hosur. While the TVS-badged bikes will be sold in India, the BMW-badged one will be marketed outside the country in emerging markets in Asia and South America. However, BMW bikes could also be sold in India but at a premium over the TVS version, something on the likes of the KTM and Bajaj Auto arrangement where the KTM Duke 200 is sold at a premium over the Bajaj Pulsar 200 NS.

Commenting on the future cooperative venture, Stephan Schaller, president, BMW Motorrad, said: "In view of changing motorcycle markets, demographic developments and increasing environmental demands, we are expanding our product range so as to tap into fresh growth potential. We have a highly expert and experienced partner in the TVS Motor Company. This means that in future we will be able to offer vehicles in smaller capacity classes in addition to the BMW Motorrad core segments. Various types of motorcycle are conceivable. They will meet the expectations of a BMW motorcycle in terms of riding fun as well as setting a new benchmark when it comes to stability, agility and performance figures. I regard this long-term cooperation as an important step along the road to profitable, sustainable growth."

Venu Srinivasan, chairman, TVS Motor Company, said: "With BMW Motorrad, we see an ideal long-term strategic partner who shares our core values: focus on quality, engineering prowess, innovation and customer satisfaction. We intend to leverage each other’s strengths to deliver a new series of products offering cutting edge technology for our customers."